Will Europe's Move to Tax Airlines' CO2 Emissions Spark a Global Trade War?


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The GlobalPost thinks it might. As you may be aware, the European Union is planning on instituting a carbon tax on airlines that fly in and out of its member nations. The deal is set to take effect, but the rumblings from the international community -- and the airlines balking at the prospect -- are beginning to intensify.Here's some background: On the first of January next year, the airline industry will be forced to join the EU's carbon trading system (the Emissions Trading Scheme, or ETS). Most other polluting industries already must participate. The controversy arises here: (via the GlobalPost)

Prepare for extreme turbulence between the European Union and the rest of the world. Not usually accused of being unilateralist and unwilling to negotiate, the EU has sparked what is shaping up to be the next big international trade dispute ... Other governments have blasted the EU's go-it-alone approach. Airlines have consistently resisted being included in the ETS as the system has evolved. Now that it's due for implementation, many non-EU governments have rejected the plan, most vocally the United States, China, India and Russia.

Their main complaints: The EU is asserting the right to assess these fees in the absence of a global agreement, or any reciprocal measures by other governments, to do so; it will be charging for the entire length of a flight, not just the portion in European airspace; and the earnings from the carbon dioxide charge will go directly into the coffers of EU governments, with no requirement that the money be spent to combat global warming, on research and development, new aviation technology or any other tool to protect the environment.

Those are the publicly articulated complaints, anyhow -- the true ones have more to do with the profit motive than anything else.

Anyhow, with the increasingly strong resistance of airlines from the US and beyond, and many governments spouting popular anti-regulatory-rhetoric (US, Canada, China, etc), there could be quite the international conflict a-brewing.

Tags: Carbon Emissions

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