The emissions-trading battle continues
Late last year, complaints against the EU for deciding to implement its carbon-trading scheme to airlines flying in and out of Europe starting in 2012 were passionate. Airline officials worldwide representing small-, large- and medium-sized carriers said the tax, as they started calling it, amounted to a money grab by the European Union.
These same people called it an illegal infringement upon states’ sovereignty. Any blanket emissions scheme had to go through the proper channels at the International Civil Aviation Organization, they contended. But the EU persisted. In October 2011, a spokesman for the EU addressed the concerns of the international community by basically saying the scheme’s implementation was non-negotiable.
“This is not a proposal,” he told Air Cargo World at the time. “This is adopted legislation. We do not intend to back down or modify our legislation.” And it was legislation with a price tag; early estimates by The International Air Cargo Association said complying with the law — in which carriers who exceed the EU’s carbon limits must buy credits — could cost the industry $3.5 billion by 2020.
Government reaction was swift. Nearly every body around the world reacted in the same way, banding together to not allow their carriers to participate in the ETS, pushing for a change through ICAO, and meeting with each other to discuss solutions. The Chinese and Indian governments even went so far as to imply that Airbus would not be receiving any business if the ETS went forward.
Threats such as these, says Richard Anderson, CEO of Delta Air Lines, might finally convince the EU to pursue another option.
“I think that the EU ETS is probably going to get solved by the fact that China and India aren’t going to buy any Airbus airplanes,” Anderson said recently. “This industry has the best track record, I think, of any industry in the world on reducing emissions. The problem with the ETS is that it’s trying to do out-border regulation,” he continued. “The way the system is set up, it is seeking to regulate emissions over other countries, so it’s extraterritorial.”
Anderson says that the industry’s standards on engine noise evolved the way regulations on emissions should. In that case, the industry worked with each other to develop a solution to a problem, implemented standards that alleviated the concern, and moved forward with new
protocols and a less-noisy way of doing business. The ETS, he says, should evolve in the same way, but patience might be lacking.
“I think the reason why the ETS has surfaced in the EU is really to try to continue to prod people to work on this,” he says. But he points to pledges made by Airlines for America and the
International Air Transport Association that call for carbon-neutral growth by 2020 as steps in the right direction.
The EU, he says, isn’t fully aware of all that the industry has done. The U.S. government has paved its own path forward. It had taken almost a year from its introduction in December 2011, but Senate Bill S. 1956 — “European Union Emissions Trading Scheme Prohibition Act of 2011” — passed the Senate in September. Sponsored by John Thune, a Republican from South Dakota, the senate bill is backed by numerous U.S.-centric aviation groups, including Airlines for America and carriers like United Airlines.
“Congress has sent a strong message to the EU that they cannot unilaterally impose an illegitimate tax on the United States,” Thune said in a statement when the bill passed. “The Senate’s action today will help ensure that U.S. air carriers and passengers will not be paying down European debt through this illegal tax and can instead be investing in creating jobs and stimulating our own economy. I hope the House [of Representatives] will quickly take action on my bipartisan legislation so the president can sign this bill to prevent the EU’s unlawful attack on American sovereignty.”