Europe
Non-EU countries challenge emissions regulations
- In another challenge to the European Union’s plan to regulate emissions from the world’s airlines, 26 countries including China and the United States are backing a resolution urging that non-European airlines be exempted.
The matter was debated yesterday at a meeting of the International Civil Aviation Organization, an arm of the United Nations, in Montreal.
A draft of the resolution allegedly argues that European plan “poses major challenges and risks for aircraft operators.” It warns that other countries could introduce retaliatory rival measures, “bringing about a chaotic situation adversely affecting the sustainability of air transport.”
Three years ago the European Union passed regulations stipulting that airlines landing at or taking off from any airport within a member nation starting on Jan. 1, 2012, must obtain a sufficient number of pollution permits under the union’s cap and trade system. According to the EU its law is justified because the I.C.A.O., the United Nations body, has taken too long to come up with a global system for reining in the greenhouse gas emissions that contribute to climate change. However the plan has met with fierce opposition from airlines, many of them based outside of Europe.
The airlines say that the union has no right to charge for emissions on routes that are mostly outside European airspace but the Advocate General at the European Court of Justice has endorsed the European Union's stand. Attention has now turned to the United Nations aviation arm. Outcome of the vote is as yet unknown but if it is approved it could put more pressure on the Europeans to negotiate a system that would be acceptable to the airlines or even change the law.
In the worst-case scenario, the dispute could turn into a full-blown trade war between Europe and countries including the United States. In October the House of Representatives approved a measure that would make it illegal for American airlines to comply with the European Union law. If the American bill were to become law, airlines would be unable to fly to and from Europe without breaking either a federal law in the United States or a European Union law.
Although the system is due to take effect next year, airlines would not have to hand over the first batches of permits until the spring of 2013 to compensate for flights made in 2012. That could leave room for a compromise over the next year. Various compromises could be made whereby all incoming flights would be exempt from the rules, although that seems unlikely to allay the concerns of countries like the United States and China because their airlines would still need to pay for the emissions tied to outgoing flights.
Airlines will receive about 85 percent of their permits at no charge. Most should be able to pass along the costs by charging passengers a bit extra for their tickets. Estimates of the cost to the industry for the first year of the system range from $825 million to $1.5 billion.
The more serious concern for airlines is that they are looking at the thin end of an enormous wedge. The sums could grow substantially in coming years if governments decide to auction a larger proportion of permits and if demand for the permits rises.
