Lack of Clarity on Aviation Emissions Persists as ETS Deadline Looms

19 December 2011

With the 1 January 2012 implementation date for the EU's controversial plan to charge airlines for their emissions drawing near, many questions on the details of the plan remain unresolved. The scheme - which will charge all airlines landing or taking-off from EU airports for their expended emissions, regardless of their country origin - has faced much criticism and is the subject of a trans-Atlantic legal battle.

Still undecided as the 2012 start-date approaches, the European Court of Justice (ECJ) is now expected to deliver its ruling on the legality of including aviation in the EU ETS on 21 December - earlier than anticipated. The decision is expected to follow the ECJ Advocate General's non-binding opinion, which deemed that the inclusion of aviation in the EU ETS is fully compatible with international law (see Bridges Trade BioRes, 17 October 2011).

Further complicating the issue, the US House of Representatives in October passed a bill that would make it illegal for US airlines to comply with the controversial EU scheme. The House-backed measure, which garnered broad support, would prohibit US passenger and cargo airlines flying to and from Europe from participating in the EU ETS should the scheme be unilaterally imposed (see Bridges Trade BioRes, 31 October 2011).

The bill was introduced to US Senate on 7 December. If approved, the law would allow the US Department of Transportation to "take necessary action to ensure that America's aviation operators are not penalised by any tax unilaterally imposed by the EU."

For its part, the European Commission has estimated that any increase in cost under the ETS will be "modest at most," ranging between US$1.40-US$8.60 per ticket per flight at current CO2 prices. The EU has repeatedly reiterated that its preferred choice is a global solution but says the lack of global action has forced it to proceed with the scheme.

But controlling emissions on a global scale is a monumental task, as seen in the negotiations which took place last week during UN climate talks in Durban, South Africa (see related story, this issue). While parties were able to make modest progress on key climate change challenges, they were unable to reach an agreement on a global sectoral approach for transport emissions.

The protracted negotiations on aviation were complicated by issues relating to aspects of how the principle of Common but Differentiated Responsibility - whereby developed countries are expected to take on more responsibility due to their historical carbon contributions - factors into the aviation sector. There is also disagreement on which UN body is better equipped to manage the issue: the Framework Convention on Climate Change (UNFCCC) or the Montreal-based International Civil Aviation Organization (ICAO).

While in Durban, Paul Steele, a spokesman for the International Air Transport Association's (IATA), an international trade group of airlines insisted that the ICAO was the most appropriate venue.

The only "real way to solve this is for governments to get back around the table at ICAO," Steele told reporters.

On Friday 13 April ICTSD will organize a dialogue in Geneva on aviation, climate change and trade together with the university of Cambridge and the Centre for European Legal Studies, more information on this event is available at http://www.ictsd.org/themes/climate-change/aviation-climate-change-and-trade-is-policy-still-up-in-the-air

ICTSD Reporting; "Senate bill would shield US airlines from EU law," REUTERS, 8 December 2011; "Court to decide on EU aviation emissions trading case before Christmas," BUSINESSGREEN, 7 December 2011; "Airlines for America (A4A) Commends Senate Opposition to EU ETS," SACRAMENTO BEE, 7 December 2011; "COP17 Outcome - An Aviation Perspective," AIR TRANSPORT ACTION GROUP, 11 December 2011; "IATA warns EU ETS could trigger trade war," AIR TRANSPORT WORLD, 9 December 2011; "No agreement on aviation emissions at COP17," AIR TRANSPORT WORLD, 13 December 2011; China, Japan Clash with EU over Aviation CO2 curbs at summit," BLOOMBERG, 30 November 2011.

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19 December 2011
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