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GLOBAL PRESSURES RISE AGAINST EU AIRLINE EMISSION FEES (May 2)     Print Email

By Zachary Laven, European Affairs Editorial Assistant

In the tug-of-war over new EU rules levying carbon taxes on airlines’ flights, the U.S. has signaled for the first time that failure to change or at least postpone the European plan could hold up future progress on global climate-change talks.

“It could hold them up or have a spillover effect,” Todd Stern, the US special envoy for climate change, told reporters after an April 12 international meeting of top climate officials in Rome. The controversy was mentioned several times in a “uniformly negative” way, he said.

“There are quite a few countries -- I’m not even talking about the US -- who are quite upset about the [EU extension of its Emissions Trading System (ETS) to airlines] and upset about what in their judgment it says about the multilateral system.”

Nearly 30 countries -- including the U.S., Russia, China and India -- have threatened non-compliance with the EU’s airline emissions tax and are discussing retaliatory action and a possible trade war over the issue.

This threat – that the extension of ETS could be a deal-breaker in global climate negotiations – was also voiced by India’s Environment Minister Jayanthi Natarajan, "I shall stick my neck out and say, for the environment ministry, yes the unilateral measure by EU...is a deal breaker for talks. I strongly believe that as far as climate change discussions are concerned, this is unacceptable," said Natarajan, who is the leader of India's climate change negotiating team. She described the EU plan as a move to “disguise unilateral trade measures under climate change.

The European Commission’s top office on climate, Connie Hedegaard, who was also present at the forum, said that the EU will not back down from its position. But the EU has also hinted at readiness to “suspend” parts of the new law “if countries were to make clear progress this year toward establishing a global emissions control system.” The comments in late Februay, by Jos Delbeke, the director general for climate action at the European Commission, were reported by the International Herald Tribune as “the clearest sign yet that Europeans were considering how to defuse a mounting conflict over the new emissions law with its most important trading partners.”

Todd and other negotiators were speaking in Rome at a meeting of the Major Economies Forum on Energy and Climate Change, a group that includes the U.S., China, Russia, the EU and 20-some other countries. The emissions controversy came up “several times” in the meeting, according to Todd, who said the tenor of these comments was “unfavorable” to the EU plan.

The U.S., he said, preferred a “multilateral approach” to the issue, presumably via the International Civil Aviation Organization (ICAO), a UN body. But the EU negotiator has complained repeatedly that there has been no noticeable progress at the ICAO. Her spokesman has said that “countries criticizing the EU should come forward with concrete and constructive proposals,” and to “focus their efforts on injecting positive ideas and forward-looking solutions into a UN led process, and not selective parallel meetings” – such as the one in Rome.

Critics have said that their concern is the extra-territorial scope of the EU’s law and that it unfairly charges non-European carriers by making them pay for the entire route, not just the European stretch of the journey. The EU’s constitutional court has ruled that the emissions law, as now on the books, is valid in international law.

But the EU seems to be facing deepening global isolation over the plan.

In the U.S., the House of Representative has passed a bill with bi-partisan support that would make it illegal for U.S. carriers to participate in the emission tax scheme: that U.S. ban law has not received Senate or White House approval. Reuters reported on April 29 that China Eastern Airlines plans to place a $6 billion order for 20 Boeing 777 jets while holding up on a recent $3 billion deal to buy 15 Airbus jets. Growing fears in European industry over a trade backlash were voiced in a letter in March, as reported in European Affairs, to the European Commission signed by Europe’s leading aviation companies and national political leaders asking them to put the plan “on hold.”

Meanwhile, some flights involving Asian airports are rerouting through Dubai (and potentially through North Africa) to reduce their exposure to the EU tax, which is due to come into effect in January 2013.

According to an analyst with Reuters, "The EU will almost certainly stand firm and foreign carriers will pay up. The main prospect for compromise would be for the EU to...not count emissions outside its airspace,