Listen in as Aviation Week Network's Karen Walker speaks with Marie Owens Thomsen, IATA's senior vice president for sustainability and chief economist, about key talking points at the first IATA World Sustainability Symposium in Madrid.

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Rush Transcript

Karen Walker:

Hello everyone and welcome to Window Seat, the Aviation Week Network Air Transport podcast. I'm ATW and group editor-in-chief Karen Walker and it's great to have you on board. Now, this week I'm in the beautiful city of Madrid where IATA, the International Air Transport Association that represents some 300 airlines worldwide is staging its first World Sustainability Symposium. And my guest today is a key speaker at the symposium and IATA's sustainability leader in her role as Senior Vice President Sustainability and Chief Economist. So welcome, Marie Owens Thompson.

Marie Owens Thomsen:

Thank you so much.

Karen Walker:

I think it's very telling that the speakers and the attendees here, first of all, at a high level, there's a lot of executives and they represent not just the airlines but a lot of different companies and organizations that some are connected to the air transport industry, some not so, but they've got a lot of sustainability background. So it's a very broad set of people here and they're also from all over the world. Lots of interesting conversations of course, already lots of talk about of course aviation fuel supply, offsets, how to finance all of this, lots of conversations there. Let me just kick off by asking you, what is IATA most hoping to achieve at this gathering?

Marie Owens Thomsen:

I think that the hope we have is that this can be sort of an action-oriented event. It is obviously very important to speak with each other. It's hard to just jump straight into the action, but we hope that we have the right level of people, as you said. So decision making people present, I think that's the case and that we will give them all plenty of opportunities to really delve into the specifics of various issues and that the outcome can be that we understand some critical gaps and that we can all come away with a bit of a list of things to do and great understanding of what are the most urgent things to address right now. That's our hope.

Karen Walker:

So, certainly a lot of interesting conversation, but as you say, with a very much in mind of sort of people can go away with some action plans as to what their role is and what they can do here. Can I just ask you a little bit about, of course, everybody's always talking as well about the 2050 net zero goal that the industry, the airlines have set, that IATA set that was followed by the ICAO agreement. So lots of talk about that. I would be interested to hear from you, especially as you've got this combined role in sustainability and the economic side. I think you take rather a holistic approach if that's the right way of saying it, to where sustainability and the economies of the world count when it comes to aviation. Can you talk about that link please?

Marie Owens Thomsen:

Yes, with a great pleasure. Thank you. Because I think as an economist, most economists somehow go into that field wanting to make the world a better place. So the ultimate goal has to be to improve everybody's welfare and improve outcomes for everybody. And that aligns of course very nicely with the world's priorities that the world has set itself in terms of the sustainable development goals of which the first one is of course to reduce poverty. Now, we think that aviation probably addresses in some way or another the vast majority of all of them.

But if we just ponder the poverty one for a second, I think it's absolutely clear that transportation in all its forms throughout human history has always been a very significant driver of economic development and not the only one of course, yeah, but a necessary one. So in economics, we like to use that expression, necessary but not sufficient, right? So I think that's absolutely how we would situate aviation in today's world, that it's a necessary means by which to advance on all the sustainable development goals, notably the one to fight poverty, but it's of course not sufficient because we live in an interconnected world and we all depend upon each other.

Karen Walker:

There was quite a lot of discussion also this morning about the cost of all of this. We all know that this is an industry that has almost been completely brought to a standstill by the COVID, lost billions of dollars in that. And this is not a cheap endeavor, getting to that 2050 goal, I think you mentioned more than $20 billion that the airlines alone are going to have to put into this. Can you just say some of the key things that you felt were coming out of the conference this morning about how this is going to be financed and the partnerships and the government help that's going to be needed?

Marie Owens Thomsen:

Yes, I think there's still a fair amount of uncertainty around that, of course, but so the 20 billion, they pertain to what we think might be the cost to airlines of CORSIA, which is this global system for offsetting, so agreed under the auspices of ICAO our UN body for civil aviation. So all the member states have signed onto this and support this, which I think is important to stress because sometimes they seem to forget that they have done that. And offsetting has had managerial issues, but that doesn't diminish the importance of the offsetting, we should then address the managerial issues, not give up on offsetting. And today perhaps the public has a low awareness of the near absence of any SAF production. It just doesn't exist. So when aviation doesn't have any solutions, proper to decarbonizing at this stage because we don't have the sustainable aviation fuels, the hydrogen planes, all the things that we hope that we might have in the future.

So while we don't have those solutions, then surely it must be welcomed and applauded that airlines are willing to put this kind of money into offsets that can permanently remove greenhouse gases from the atmosphere. And obviously, the atmosphere doesn't care about where these gases get removed from around the planet. Yeah, it's equally beneficial to all of us no matter where it happens. So I definitely feel that this is a high time to rehabilitate the reputation that offsets have. And sorry for going on a bit here, but the broader financing issues, so how do we channel investments into producing sustainable aviation fuels and into all the research that we need for the new technologies and new airplanes and et cetera, et cetera? That is obviously a huge undertaking too, where we would really like to see more concrete steps in terms of spreading that burden and very much needed steps towards de-risking these investments for the total new technologies where the potential investor bears the full risk and could lose their shirt, so to speak.

Yeah, so that's a very different investment proposition from the fossil fuel sector where investors can today sadly continue to just do business as usual and earn the profit margins that they are accustomed to in peace, which completely goes against what we're actually trying to do in terms of the aviation's and the world's energy transition. So there are so many moving parts in where the money should come from. I think roughly speaking, we could say that the annual investment needs we might require for aviation's transition could represent maybe a third of the money that goes in annually into the fossil fuel energy sector. So for me, that's obviously a large amount of money, but therefore must be entirely feasible if we can just alter the investment proposition so that that reallocation of capital can actually happen.

Karen Walker:

So it's about having the frameworks in place, so that does look like a viable investment, an attractive investment for ... And I thought it was also interesting that we heard some few people saying that you've got to tailor it isn't just going to be the same solution everywhere. You've got to tailor those partnerships, those investments to the region, or to the type of solution that's being pursued, yes?

Marie Owens Thomsen:

Yes, a hundred percent. I think that is really very important to get that message across because much of the debate sort of centers on these binary policy measures and it tends to be either mandates or incentives and nothing much in between. Whereas of course in reality the policy toolkit is sort of infinite. There are so many things you could do and of course which policy you want to use for what purpose depends very much on the local situation that you are contemplating. So I would definitely encourage any moves towards having more intelligence around the policy tools, what they can do for whom, and a greater realization that it's not a one-size-fits-all policy prescription does not exist. So this really does need to involve everybody, involve the local communities, and be relevant for those local countries' communities. So it's all therefore very complex when we have a systemic crisis, which is what this is, climate change, affecting absolutely everybody on the whole planet, then we obviously need systemic solutions, but we are just not equipped in our world today to deliver solutions systemically.

We tend to deliver solutions and little pieces and therefore I think those little pieces come with a very high risk of perverse effects because you haven't considered the whole. Now, of course working more systemically and together with other people in parts of science that you might not yourself be very knowledgeable. All of this is very challenging, of course, it takes a lot of time, a lot of energy, but I really think that it's the way to go. And it's incidentally also the way that the two female winners of the Nobel Prize in Economics have tended to go, first of all, Elinor Ostrom who was also stressing very much how we need to empower and work with people and find local policy solutions. And of course, Esther Duflo of J-PAL, who really works a lot on creating absolutely solid evidence in the place concerned, which then from when the appropriate policy can spring, without that information, how do we know how to address the issue?

Karen Walker:

And that's really a lot of what's going on with this whole sustainability issue I think in aviation is that it's the really having the data, as you said, we know for instance with sustainable aviation field, the science is there, but it's also about the bigger picture of having data that the industry can go to the policymakers, who can then go to everybody else. And that's really I think is still what's happening at this juncture, correct?

Marie Owens Thomsen:

Yes, exactly. And I mean data is complex. Yeah, because not only do you have to have the relevant data, maybe it's a metric, so you have a methodology behind this metric. What you include in an indicator is important, but what you exclude is equally important. So there's a lot of important considerations to bake into that whole equation. And then the user of the data also has to have sufficient knowledge to use it in the right way. And today, I think we're somewhat lacking on all of these fronts. I don't mean to over-complexify this conversation or the issues that we face, but I'm rather trying to introduce a little bit of a friendly complexity so that we understand that it is definitely more complex than just a good or bad, right, or wrong for everybody and then we're sorted. No, we're going to have to make a bit more of an effort than that.

Karen Walker:

Yeah, this is a momentous change transition for the industry in so many ways. It's not just a sort of like, "Okay, here's the fix." Now, it's not going to be like that. It's going to be a forever transition. On the SAF, again, quite a lot of discussion here. We know that that is going to be a large part of the solution to get to the 2050 goal. It's the solution we've got at the moment. The problem is we don't have enough of that solution by far. How concerned are you about closing that gap so that there is sufficient staff?

Marie Owens Thomsen:

I think we have to be concerned because in a sense, the whole space feels a bit like a boiling cauldron, maybe a little bit like the dot-com era where all of these technologies were unknown, nobody knew which one was going to be the winner in the future. And I must say I wish we had a little bit more of the hype in our space today than what was present during the dot-com era. But that's the crazy environment that we're in. But obviously, at the same time, we have to manage this interval period where we don't have any solutions, and the low-hanging fruit, there's not so many of those given that what we do is fly airplanes whose propulsion is really dependent on this fuel.

Karen Walker:

I have to ask you, there are some organizations, there are some bodies of people, there are some governments even who believe that the solution is less aviation, even getting rid of aviation to an extreme level. Again, can I ask you how optimistic you are that aviation can both continue and grow and meet the sustainability targets that everybody is demanding of it?

Marie Owens Thomsen:

Yes. I mean I think that we have to be a little bit concerned because clearly, this seems to be tempting to a number of countries, and where they got that from the mind boggles, right? Because everything we do depends on connectivity in one form or another. So obviously, not only aviation but again aviation is a necessary but not sufficient part of this. And we all lived through COVID, right? And we all saw what not only not flying but not flying and all the other things we also didn't do what that did to the world economy. I struggle to remember the number of millions of people that we believe were pushed into poverty as a result. And somehow, we can think that flying less is a good idea, that is just a hundred percent in Congress. I don't know how one could come to that conclusion. And also, as an economist, this is of course a very European debate, primarily today.

Let's hope it doesn't spread too far beyond Europe. But even for Europe, it's obviously absolutely mystifying how all of a sudden these sort of status economic policies have come to the fore, which go against the Four Freedoms upon which Europe was built. I think our whole civilization was really built on those types of freedoms, all the way back to the Oracles of Delphi. And now all of a sudden, some people seem to think that it's okay for the state to decide by what means of transport you shall move. That is absolutely unfathomable how one can think that that's a good solution. We have so many examples around the world where we can clearly see the difference between the countries that have connected internally and externally versus the countries that remain isolated. We know with blatant clarity, which model of economic management delivers the superior results. So on this score, I can only hope that greater sanity prevails.

Karen Walker:

Absolutely, yes. Especially when you think of even the wider context of where ultimately there'd be these organizations that would say those countries, emerging countries that are still wanting to really grow their aviation capacity are denied that. Marie, it's always great chatting with you, especially on this critical topic. So thank you for your time. Thank you also to our producers, Guy Ferneyhough and Corey Hitt. And of course, to our listeners. Make sure you don't miss any of our weekly programs by signing on at Apple Podcasts or wherever you listen. This is Karen Walker, disembarking from Window Seat.