Emissions Trading System


An emissions-trading system is a system whereby the total amount of emissions is capped and allowances, in the form of permits to emit CO2, can be bought and sold to meet emission reduction objectives. Such a system could serve as a cost-effective measure to limit or reduce CO2) emitted by civil aviation in the long term, provided that it is open to all economic sectors.

The advantage of an emissions trading system is that it permits compliance flexibility, allowing each source to make a tailored choice in order to meet the target limit for emissions. This is critical, as incremental clean-up-costs of emissions control vary sufficiently across regulated entities. As a result, incorporating an emissions-trading system into an environmental policy could imply that the same level of environmental protection would be achieved at a lower overall cost. Aviation in particular would be expected to be a net buyer of emissions instruments.

This site provides basic information on the overall concept of emissions trading with links to useful reference material that addresses the issue from a historical perspective and provides practical guidance.

ICAO has adopted two approaches to address the problem of emissions:


Emissions Trading Documents Published by ICAO


ICAO Material on Emissions Trading


  • Report of CAEP Working Group 5 to CAEP 5
  • Report of FESG on analysis of market-based measures to CAEP 5
  • Report of CAEP Working Group 5 to CAEP 6

Links to Reference Material on Emissions Trading

Background information on trading:


Working Integrated Schemes and Practical Experiences


Voluntary Trading Schemes.

Links and Material to Voluntary ETS Schemes Identified in the ETTF VETS Voluntary Emissions Trading Schemes) Report


Stakeholder and Other External Reports


  • Emissions Trading in International Civil Aviation (Oeko Institut on behalf of UBA, the German Federal Environment Agency
  • Designing an Emissions Trading Scheme for International Aviation (ICF Consulting). This study has not been approved by ICAO
  • Emissions Trading for Aviation (Arthur Andersen for IATA)
  • Emissions Trading and European Aviation (TruCost)
  • Assessment of the Impact of Airlines of Integration into the EU GHG ETS (OXERA Consulting for BAA/DfT)



ICAO is not responsible for the availability or content of these external sites, nor does ICAO endorse, warrant, or guarantee the products, services, or information described or offered at these other Internet sites. It is the responsibility of the user to examine the copyright and licensing restrictions of linked pages and to secure all necessary permissions.

Share this page: