International aviation is growing at a rate of roughly 5 percent per year. Its greenhouse gas (GHG) emissions are forecast to increase by 3–4 percent per year. At present, international aviation’s contribution to global GHG emissions is approximately 2 percent. However, these emissions are expected to increase considerably under a business-as-usual scenario.

Although the International Civil Aviation Organization (ICAO) has discussed environmental protection in connection with aviation since the 1970s, climate change issues are relatively new. Ever since the Kyoto Protocol entrusted the ICAO with handling GHG emissions from international aviation, the Organization has been at the center of the storm. This chapter seeks to explore the ICAO’s involvement in climate change issues, and its merits and shortcomings, as well as identifying better ways for the organization to handle GHG emissions from international aviation, in particular bearing in mind the recent agreement to develop a global market-based measure (MBM) scheme. Understanding the constraints under which the ICAO operates is central to determining its limitations and establishing realistic corrective actions to facilitate not only its adoption and implementation but, more importantly, participation in the ICAO’s global MBM.

To this end, the chapter discusses two main topics. First, it analyzes the suitability of the ICAO’s institutional setting to handle climate change issues. Secondly, the chapter studies the ICAO’s specific involvement in climate change issues. Although the ICAO has in the past taken many initiatives to tackle climate change, the chapter focuses on five key aspects: (1) the CO2 standard; (2) State action plans; (3) the aspirational goals; (4) the framework for MBMs; and, (5) the global scheme. These topics adequately illustrate the challenges faced and the political implications involved. Finally, the chapter provides some concluding observations with some suggested realistic corrective actions that the ICAO may take to better handle the issue of GHG emissions from international aviation.