Jeffrey N. Shane at American Bar Association Forum on Air & Space Law

Jeffrey N. Shane
Under Secretary for Policy
U.S. Department of Transportation

American Bar Association
Forum on Air & Space Law

Memphis, Tennessee
October 4, 2007

It is a privilege and a pleasure for me to be here among so many great friends and colleagues. The ABA Air & Space Law Forum is very special—regularly bringing our community together, enabling us to discuss the latest developments, exchange ideas, and learn what we can expect for aviation and space law as it continues to evolve.

The Forum’s leadership is to be commended for deciding to kick off this year’s meeting – and I know you did this intentionally -- on the fiftieth anniversary, to the day, of one of the last century’s, and perhaps human history’s, most transforming events. I am talking about the launch of Sputnik by the Soviet Union. It happened on October 4, 1957. For the first time ever, a man-made object could be seen traversing the heavens -- a 184-pound aluminum ball that traveled at 18,000 miles an hour, circling the earth at only 90 minutes per lap, taunting us the whole time with an eerie beep-beep-beep signal. A month later the Soviets successfully launched a satellite that was more than 5 times as heavy. It contained a dog named Laika. The first U.S. satellite launch – called Vanguard – climbed all the way up to four feet above the ground and then exploded – on live TV. Your average college high-jumper was getting closer to orbit than Vanguard did.

But things got better. In 1961, President Kennedy promised that America would put a man on the moon and bring him safely back to earth. And we did. The “space race,” as we called it, was literally a race by human beings into space. And with the lunar landings, America won that race.

It’s a bit ironic, therefore, to recall that no human being has attempted to go beyond a low earth orbit since 1972. While NASA is touting new plans to return to the moon and then put humans on Mars, that’s some time off. And the FAA’s Office of Commercial Space Transportation is now licensing space tourism ventures. But they too will be low-earth-orbit adventures, as is the International Space Station.

Despite the fantasies engendered by the space race 50 years ago, humankind is still a long way from colonizing the moon and the planets. But as a wonderful article by Joel Achenbach in the Washington Post made clear a couple of days ago, the changes spawned by Sputnik are far more profound. We have launched something like 6600 satellites since we first heard that beep-beep-beep. An estimated 850 to 920 are operational. Some are for navigation; some for communications; some for remote sensing; and some you’re not supposed to know anything about. What’s no longer in any doubt is the extent to which those satellites have wholly transformed life on our planet.

I’d be remiss on this occasion if I didn’t mention that lawyers have helped in important ways to facilitate this transformation. We have an Outer Space Treaty that governs the exploration and use of outer space. We also have treaties establishing liability for damage caused by space objects and establishing a process for registering objects in space. We have Remote Sensing Principles. We even have an Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched in Outer Space.

Just think for a moment about the Global Positioning System. GPS has become the enabling technology for vast amounts of economic activity around the world. It’s operated by the United States Air Force, but today it has far more civilian users than military users. And it’s not just for positioning and navigation; a highly precise timing signal broadcast by GPS facilitates cellular communications, global financial transactions, and many other activities.

You may not know it, but the Department of Transportation co-chairs – with DoD – the inter-agency executive committee that serves as GPS’s governing body. DOT represents that vast civilian user community, and we work closely with the Defense Department on budget issues, the pace of modernization, and the functional capabilities sought by civilian sector in the next iteration of the system. It’s one of DOT’s most important, and least visible, responsibilities.

I have long felt that Americans don’t sufficiently appreciate the magnitude of the gift they have given to the world. GPS has become a global utility, and its basic signal is furnished by the United States free of charge to users everywhere. Secretary of Transportation Mary Peters just announced at the 36th Session of the ICAO Assembly in Montreal two weeks ago that the U.S. would renew that gift indefinitely. She also announced that the next generation of GPS satellites would not even permit the U.S. to discriminate between military and civilian users in the precision of the signal it provides, as it did in GPS’s early days. That capability – “selective availability” -- is simply being designed out of the newest satellites – the ones that will comprise what we call “GPS III.”

The relevance of all this to aviation, of course, is that satellite-based navigation is furnishing the essential technology platform upon which our progressive transformation of air traffic control is based. I am speaking, of course, about NextGen – the Administration’s hugely important interagency project to overhaul completely the way we manage air traffic and to bring far greater efficiency and capacity to the ATC system. From my perspective, NextGen is quite simply one of this Administration’s most important initiatives. You have probably heard enough about it by now, and so I won’t spend time telling you why a modernized, state-of-the-art system is so essential to the future of air transportation. I will say, however, that it is the reason the current cycle of FAA reauthorization is so vitally important. Congress must give us a reliable way to fund the transition to a new system.

So that’s the story of how Sputnik, launched 50 years ago today, led us to NextGen. Deploying the new system will require some hard choices, but we have to make them if the system is to continue expanding and fostering economic growth.

I’d say the same principle applies to another aviation issue that we’re reading a lot about these days – greenhouse gas emissions from aviation. I want to spend the remainder of my time this morning talking about this major challenge.

I spent the last two weeks in Montreal at the ICAO Assembly that I mentioned a moment ago. Those meetings take place only every three years, and they are always important milestones for international aviation. This one, I think, was particularly significant.

If you read any news that emanated from that meeting, you might be forgiven for thinking that we spent two weeks wrangling over emissions trading systems. In fact, the Assembly was about much more than that. It established a budget and work program for the next three years; it elected 36 members to the ICAO Council, it set term limits for ICAO’s Secretary General and the ICAO Council President; and it produced a great many resolutions that will further advance the safety, efficiency, and security of international aviation. It was a very busy and productive two weeks, and I enjoyed my participation in it immensely.

But our deliberations about international aviation and climate change certainly received more attention in the trade press than anything else. There are two reasons for that. First, there is an ambient dissatisfaction out there with the pace at which the industry is addressing the emissions problem – most conspicuously in Europe. Second, everyone knew that we would be discussing the European Commission’s proposed emissions trading system and its application to flights operated by non-European airlines – an application that many delegations, including the U.S., had already characterized as inappropriately unilateral, extraterritorial, and inconsistent with the Chicago Convention and bilateral air services agreements. The aviation press anticipated the ICAO equivalent of a cage match.

But something very different happened at the Assembly, and it’s important the story be told more fully.

First, there was no disagreement among the 179 member countries represented in Montreal – an all-time record for ICAO, by the way – that more concerted and effective action was required to reduce the carbon footprint of international aviation. Nor was there disagreement that, in taking that more concerted action, an array of tools – technological, operational, and economic – would have to be employed. Notably, there was no disagreement about the importance in this context of market-based mechanisms in general, and emissions trading systems in particular. The U.S. and many other delegations explicitly expressed support for emissions trading as a potentially valuable strategy.

The only disagreement related to a few words in a resolution on market-based mechanisms that urged member states not to apply an emissions trading system to other states’ aircraft operators “except on the basis of mutual agreement between those States.”

Those words were supported by a very solid majority of the delegations present. They were opposed, quite predictably, by all 42 of the delegations comprising the EU and European Civil Aviation Conference bloc. The European delegations entered a formal reservation with respect to market-based mechanisms resolution and said that they did not intend to be bound by it. They argued that “there is no provision in the Chicago Convention which may be construed as imposing upon the Contracting Parties the obligation to obtain the consent of other Contracting Parties before applying market based measures . . . to operators of other states in respect of air services to, from or within their territory. On the contrary,” the Europeans said, “the Chicago Convention recognizes expressly the right of each Contracting Party to apply on a nondiscriminatory basis its own air laws and regulations to the aircraft of all States.” The reservation made clear that Europe would not treat the resolution as an impediment to proceeding to implement the proposed emissions trading system.

But that reservation isn’t really the centerpiece of the story. Far more important, in the view of most participants, was another resolution that put ICAO on a far more aggressive path to addressing aircraft emissions more effectively. That resolution called on the ICAO Council to form a new “Group on International Aviation and Climate Change,” composed of senior government officials. Its purpose would be to develop “an aggressive Programme of Action on International Aviation and Climate Change.” The program will feature an “implementation framework” for states to use in achieving emissions reductions, including voluntary measures, technology improvements, more efficient operational measures, improvements in traffic management, positive economic incentives, and, yes, even market-based measures. Importantly, the new program will also include specific ways of measuring progress, the identification of “global aspirational goals in the form of fuel efficiency for international aviation,” and progress reports from member countries. Finally, ICAO will convene a high-level meeting for the purpose of reviewing the plan and taking next steps. That meeting will most likely take place in late 2009 or, at the latest, early 2010.

That resolution represented ICAO’s central achievement in connection with aviation’s contribution to climate change. And I’m pleased to report that there were no reservations to that resolution, which was adopted by consensus.

Now I know that the cynics among you will say, “Another working group, another report, another meeting. Where’s the beef?” And it is certainly true that we won’t know how successful this effort is until we begin to see some results. But the dynamic in Montreal was quite different from anything we’ve seen at ICAO before. We did not suffer through long arguments about whether it was time to address aircraft emissions in a more effective way; that was the “given” in the equation. Sure, we had the usual deliberations over the actual words that went into the resolution, but the determination that ICAO assert itself and do something meaningful on the emissions question was palpable and unanimous. The delegates knew, very clearly, that ICAO’s ability to maintain a central role in addressing climate change is what hangs in the balance, and that a failure to respond effectively might well result in a loss of jurisdiction. Recall that the Kyoto Protocol explicitly carved out aviation and assigned it to ICAO. Whether a post-Kyoto regime maintains that carve-out beyond 2012 will depend on whether ICAO delivers on the promise of the resolution it adopted last week. My own conviction is that ICAO will deliver.

And you should not assume, because Europe entered a reservation with respect to the resolution on market-based measures, that the meeting was characterized by any kind of friction or rancor. In fact, the assembled delegations – including those of the EU and the ECAC member states – worked long and hard, in an atmosphere of professionalism and mutual respect, to find compromise language. We never found it. But the widespread view among the delegates in Montreal was that, but for the challenge posed by the European Commission’s proposed emissions trading scheme, the issue of climate change and the importance of ICAO’s role in addressing it would not have featured so prominently on the Assembly’s agenda. Europe, where the public attaches great urgency to the implications of climate change, has challenged the rest of us in ways that we need to take seriously. The bottom line is that we agreed about far more than we disagreed about, and all of us intend to continue working as productively as possible to address the emissions issue more effectively.

Before closing, I want to take a little credit for not regaling you this morning with a long litany of the Administration’s successes in aviation policy. I’d ask you merely to stipulate – a favorite lawyers’ term – that I am extremely proud of the things we’ve done over the past several years – topped by the first-phase US-EU “open-skies plus” agreement, the recent agreement with China, and a host of other advances, including NextGen. But it seems inappropriate to cheer about all those successes when the prevailing mood of air travelers about this industry is so negative. And that’s mostly because of congestion.

Last week, President Bush and Secretary Peters announced initiatives to help reduce air traffic congestion and resulting delays in the New York area. As you know, while congestion in New York has long been a problem, it has now reached a historic level of severity and its impacts are rippling throughout the country.

The statistics are telling: One-third of the nation’s air traffic flies in, out, or over the New York City area. More than 40 percent of the flights into the New York region arrive more than 15 minutes late. Almost three-quarters of chronically delayed flights flew in and out of the New York City area during the first half of this year. At the national level, almost 30 percent of all flights are now cancelled or substantially delayed. Consumers are feeling the pain and voicing their growing dissatisfaction as complaints have doubled in the last 12 months, returning to their highest level since 2000.

The result of this is not mere inconvenience but also tangible economic loss. According to the Air Transport Association, congestion and delays cost us an estimated $15 billion each year. It’s a problem that we simply can’t leave unaddressed.

The only point I want to make about all that this morning is that the industry – airlines and airports – needs to stay highly engaged in our collaborative efforts to address this issue. If we fail, aviation congestion will begin to take a serious toll on America’s economic performance. In that connection, I think congestion pricing is a tool that we need to examine carefully. We’ve been talking about it for decades, but we’ve never really given it a test. Sure, there are other tools out there as well, but none of them are likely to work as well as the marketplace in allocating that scarcest of resources – a takeoff or landing slot.

I know you will be talking about that and other critical issues during your two days in Memphis. For aviation lawyers and policy makers, these annual meetings of the Air & Space Law Forum are as good as it gets. I know you will prove that again here in Memphis, and so I offer my heartfelt wishes for another very important and successful gathering.

Thank you for inviting me to be with you this morning.

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Briefing Room