by Shelley Welton
Deputy Director & Fellow

Despite mounting international opposition, EU leaders have remained resolute in their intentions to include international airlines in the EU Emissions Trading Scheme beginning in January 2012. The EU plans to begin requiring all flights taking off from or landing at EU airports to surrender emissions allowances equal to the emissions created from the entire flight. A majority of these allowances—representing 85% of the initial cap—will be allocated by EU governments to the airlines for free; airlines will have to purchase the remaining 15% of allowances needed for compliance through auctions.

International airlines have been vociferous in their opposition to this plan, and several American companies have challenged the legality of the policy in a case now in front of the EU Court of Justice. Last month, that court’s Advocate General issued a non-binding opinion recommending that the court find the scheme legal. The Advocate General defended the scheme’s alleged extra-territorial reach, first concluding that there is no customary international law that “aircraft overflying the high seas are subject to the exclusive jurisdiction of the country in which they are registered.” (¶ 132). The opinion further found that the EU’s regulations do not impermissibly extend extraterritorially because (1) they regulate only flights landing at or taking off from airports over which the EU has jurisdiction; and (2) they impose no particular conditions on the extraterritorial portions of the flights—they merely take into account the lengths of flights occurring over the high seas or other countries.

With this early opinion hinting at limited prospects of success in their legal challenge, airlines have moved the battle to the political arena. Last week, the U.S. House of Representatives voted to ban U.S. airline compliance with the scheme (though there are no signs that the Senate will do the same). And Tuesday (November 8), the U.S., Russia, China, and more than 20 other countries led a push resulting in the UN International Civil Aviation Organization’s governing council adopting a declaration contesting the EU’s plan to include international airlines.

The tag line of industry groups and airlines opposing the EU aviation rules is that there should be a uniform global approach to addressing aviation emissions, and that the EU will harm the industry unnecessarily by acting unilaterally. More disappointing than this predictable industry resistance, however, is the fact that national governments have joined in the call for the EU to back down and have threatened possible trade law challenges if it does not. Countries voice particular concern about alleged threats to their sovereignty created by the EU’s scheme. But notably, the EU’s plans allow for the possibility of excluding incoming flights that originate in a country with equivalent carbon regulations, leaving considerable room for countries to design their own complementary aviation emissions policies rather than have their airlines submit to the EU scheme.

Coming as it does a few weeks before leaders begin discussions in Durban of how to move forward on an international agreement on climate change, the current dispute augurs nothing good. That countries are retrenching to protectionism when faced with the EU’s attempt to seriously address one major emitting source in an equitable manner, suggests little hope that these same countries might soon take bold stances in committing to the long-term, deep emissions reductions necessary to avoid the worst effects of climate change.

On the other hand, the EU is to be commended for not backing down so far on its plans to go forward with its aviation regulations. Hopefully, this kind of leadership just might save Durban from stalemate—after all, if countries are sincere in wanting uniformity, there is no better place to achieve it.

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