After years of discussions and tense days of negotiations, delegates from nearly 200 member countries of the International Civil Aviation Organization (ICAO) ratified the agreement on Friday.
The framework agreement authorizes the agency to develop a global mechanism known as market-based measures (MBM) over the next three years. The details would then be ratified at the next general assembly in 2016 for implementation by 2020.
Among other things, it may lead to taxing airlines for their greenhouse gas emissions.
"This MBM agreement is a historic milestone for air transport and for the role of multilateralism in addressing global climate challenges," said ICAO Council President Roberto Kobeh Gonzalez.
Countries rejected a European Union proposal that allows the EU to apply its own cap-and-trade emissions scheme to foreign airlines until the global program takes effect.
The EU must now decide whether it will accept or reject the plan. It currently has suspended legislation that would allow it to apply its own Emissions Trading Scheme (ETS) to intercontinental flights, which some fear could lead to a trade war with the rest of the world.
Global aviation contributes less than two per cent of all carbon emissions, but ICAO wants to contain greenhouse emissions as the industry continues to grow, especially in the developing world. Passenger demand is expected to double by 2030.
In 2009, the global aviation industry agreed to cap its net emissions from 2020 through "carbon-neutral growth" and halve its net CO2 emissions by 2050, based on 2005 levels.
Transport Canada said it was pleased with the agreement and progress that has been made.
"We will continue to work with members of the international community through ICAO to address emissions from international civil aviation," said spokeswoman Maryse Durette. "At all steps we will act in the best interest of Canadian consumers."
The airline industry called the agreement "historic" saying it marked the first accord on climate change for any global sector.
"Today was a great day for aviation, for the effort against climate change and for global standards and international co-operation," said Tony Tyler, chief executive of the International Air Transport Association (IATA), which represents 84 per cent of the world's air traffic.
"Now we have a strong mandate and a short, three-year time frame to sort out the details."
He said the development of a global system complements other efforts to tackle emissions by improving aircraft technology, operations and infrastructure.
He also recognized Europe's role in putting aviation emissions on the international agenda, saying the industry wouldn't be where it is without the "early and persistent efforts which inspired both industry and other governments."
Several EU officials welcomed the deal as a step forward despite the rejection of Europe's approach.
"EU hard work is paying off," tweeted Connie Hedegaard, a Danish politician and EU commissioner for climate action.
Siim Kallas, vice-president of the European Commission, called the agreement a "good deal."
"Great moment for all those who care about our planet and its environment," he tweeted after the accord was ratified. It "shows aviation means business when it comes to dealing with emissions."
But environmental groups were less glowing in their praise.
The World Wildlife Federation said by rejecting the EU system ICAO delegates missed an opportunity to start reducing emissions immediately instead of waiting until 2020.
"The science is clearer than ever — 2020 is too late," said Samantha Smith, WWF leader of the Global Climate & Energy Initiative.
The agreement culminates ICAO's two-week general assembly meeting in which several issues were addressed, including safety.
ICAO Secretary General Raymond Benjamin said the UN agency has received "clear support" for its main strategic objectives for the next three years.
"These decisions will now help us to ensure and enhance air transport’s critical role in securing and facilitating the free movement of people and goods, expanding global markets and promoting broader and more sustainable social and economic prosperity worldwide," he said in a release.Suggest a correction