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Airline Industry Cries Foul Over New EU Emissions Trading Scheme

Jet contrail

A recent move by the European Union to impose an Emissions Trading Scheme (ETS) has sparked hostility from within the global airline industry.

Starting on January 1st, 2012, the European Union will require all air carriers that pass through the EU to buy permits for the emissions they generate over a certain cap. The move is meant to combat the growing share of greenhouse gases the airline industry is contributing to the atmosphere, currently sitting at 2% of global emissions.

Many airlines have officially voiced their opposition to these measures, seeing the inclusion of airlines in an ETS as a dangerous move in a fragile world economy. Forcing airlines to pay for their emissions would increase operating costs and potentially stifle demand for air travel due to higher tickets costs. Standard and Poor’s rating agency suggested that the €30 per tonne price tag on carbon could force return fares to increase by €4.60 and €39.60 by 2020.

In response to these measures, the Air Transport Association of America (ATA) will launch legal action in the European court of justice to challenge the legality of imposing an ETS on non-EU airlines. Their argument will be that the new European scheme contravenes sections of the Chicago Convention which states that countries only have sovereignty over airlines in their airspace. Consequently, the EU should not be allowed to impose taxes on airlines flying in from outside the EU such as India or China.

Clearly the new Emissions Trading Scheme the EU is foisting on global airlines is an unpopular one. Yet it underscores what many claim to be a key component of achieving effective emission reductions – putting a price on pollution.

The ATA chief, Nicholas Cailo, argued that the EU scheme would impose costs that would prevent airlines from investing in greener aircraft and technology. However, the opposite is perhaps true, since making it costly to emit pollution will encourage airlines to improve fuel efficiency and utilize technology to reduce carbon emissions. Therefore, although the ETS is unpopular now, it may be the necessary first step in reducing the carbon footprint of an emissions intensive industry.

Jet trail photo: John Johnston

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