If the past few months are any indication, international climate negotiations, trade relations and the world’s airline industry are in for a bumpy ride. And despite its good intentions, the EU could be in for the roughest ride of all.
Frustrated after a decade of fruitless talks to limit greenhouse gas emissions produced by the airline industry, the European Union took unilateral action in 2009 by passing a law that would fold aviation emissions into its emissions trading scheme (ETS).
The law, which took effect January 1 of this year, charges all international flights arriving at or departing from airports within the EU, Iceland, Liechtenstein, and Norway for the carbon emissions they produce over the entire distance of each flight.
Virtually all nations agree that greenhouse gas emissions produced by the industry must be reduced, yet a growing number are rejecting the EU’s unilateral solution as overreach and illegal under international trade agreements.
Latest to object is India, which this week joined China in prohibiting its airlines from taking part in the scheme. Rumors are circulating that China may take retaliatory action as well, by canceling new aircraft orders from the European manufacturer Airbus.
Russia and the U.S. are both reportedly considering legislation prohibiting their airlines from participating, while other countries have hinted that suspending routes and landing rights for EU airlines may be called for. Even EU member, France, is wavering and asking the EU to revisit its decision.
Under the trading scheme, airlines receive annual carbon allowances to cover their flights for the coming year. At year’s end, each airline must present allowances equal to the actual carbon emissions their flights produced.
Since allowances can be traded on the EU carbon market, airlines that reduce their emissions below set levels can sell their unused allowances. Those that exceed their limits can purchase credits to offset their overage.
For all the fuss, the cost of compliance isn’t that great– about €2 per passenger on a Beijing to Frankfurt flight. On the other hand, an airline that exceeds its emission limits without purchasing offsetting carbon credits is subject to a fine of €100 for each ton of additional carbon dioxide emitted. Those who flagrantly violate the law could potentially be banned from EU airports.
Nations opposing the EU trading scheme claim that it is effectively a tax, and as such, illegal under international agreements. The EU argues that it is not a tax, since companies always have the option to reduce emissions below their allocations, and thus, pay nothing.
In December, 2011 Europe’s highest court, the European Court of Justice, agreed with the EU’s position and that, under international law, the trading scheme could legally be applied to airlines outside the EU.
But with much of the world lining up against the EU and threatening retaliation, none of that may matter. The EU is clearly imposing limits on carbon emissions that the international community has not agreed to — which it did only because the international community couldn’t agree to anything.
The EU’s climate action commissioner, Connie Hedegaard, has repeatedly challenged opponents of the emissions trading scheme to come up with something better. In the meantime, she has sworn not to back down.
Perhaps the threat of a trade war will inspire the International Civil Aviation Organisation and its member states to finally get serious about addressing aviation emissions. Or not.