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How the EU ETS or any other emissions trading scheme could affect aviation insurance
02 June 2010
With the European Union Emissions Trading Scheme coming into effect this year, Barry Moss, principal, Avocet Insurance Consultants discusses the risks the program poses to aviation insurance.
Read more:
European Union Emissions Trading Scheme
EU ETS
Barry Moss
Avocet Insurance Consultants
carbon emissions
Scientists believe that approximately 6% of global carbon emissions are man-made and the rest occur naturally. Aviation accounts for about 2.6% of these carbon emissions. This is figure is projected to increase to over 5% by 2030.
The present Lloyd’s and international aviation insurance markets’ ‘Noise and Pollution and other Perils Exclusion Clause’ (AVN46B) may need to be revised as it could potentially be tested in the courts. At the moment the clause specifically excludes “pollution or contamination of any kind whatsoever”. But there is disagreement about whether the emission of carbon dioxide is considered as a pollutant or a naturally occurring and very common trace gas.
If insurers wish to avoid liabilities under the European Union Emissions Trading Scheme (EU ETS), then the AVN46B exclusion clause may need to be revised and strengthened to specifically exclude any potential liability arising out...
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