04 Aug 11

Battling Pollution in the Skies: Airlines challenge EU emission trading plan for aviation

By Michael Hammer

Last week the European Court of Justice (ECJ) conducted an initial hearing where US airlines contest the legality of regulating certain flights within the EU under it EU Emissions Trading System (ETS) after the case was deferred by the UK government last year.

The EU ETS which started in 2005 is a ‘cap and trade’ program that places a limit on the amount of greenhouse gas emissions emitted by factories, power plants and other installations. If a limit by a company in these sectors is exceeded, it can purchase emission credits from other companies who emit below their allocated limit, therefore still reducing emissions overall.  Companies who anticipate exceeding their limit are also encouraged to find innovate ways to reduce the emissions without trading, such as incorporating energy efficient technology into their processes.

The EU seeks to further its scope of the EU ETS to encompass the aviation sector in 2012 to further reduce emissions. It will incorporate emissions from all domestic and international flights – from or to anywhere in the world – that arrive at or depart from an EU airport into the EU ETS.

American groups such as the United Continental Holdings Inc., AMR Corp.’s American Airlines and the Air Transport Association of America (ATA) initially challenged this proposal after the UK adopted it into its national rules. It was then deferred to the ECJ.

The airlines are disputing the law as they are opposed to the regulation of American airlines when they travel to countries within the EU. A spokesman for the ATA states this nature of the regulation violates international law.

The airlines also disputed the proposal on the grounds that it violates the Convention on International Civil Aviation because this regulation is not seen as a coordinated effort, but unilateral action, thereby violating the first article of the convention establishing the sovereignty of airspace over a countries’ territory.

The EU is defending its regulation on the grounds that it takes place within a cap and trade system. The EU ETS is a pollution ceiling allowing companies the freedom to choose how they stay under that ceiling without imposing a direct tax charge or levy, expressed an EU climate spokesman.

Emissions from international aviation account for about 2-3 per cent of global greenhouse gas, which is seemingly a small amount in the larger span of things. However, airlines are one of the fastest growing industries, rising greenhouse gas emissions up 45 per cent between 1992 and 2005 within the sector, and it is projected to rise even more in the future.

This case perfectly illustrates the challenges inherent in regulating climate change, a global problem with multiple governance levels. Although the EU ETS is a coordinated effort encompassing 27 countries, it is viewed as a ‘unilateral’ action by American airlines. The desire to extend the EU ETS to encompass air transit in skies not directly above the EU highlights the limited impact climate related regulations have within territories, regardless of its deep effects domestically, a point the EU seems to recognise and attempts address.

The underlying political nature of the US airlines’ opposition to the regulation represents a common problem that prevents many climate initiatives from reaching a much needed wider scope, if it gets enacted at all. Although there is a wide consensus that we should prevent rising temperatures via lowering greenhouse gas emissions and we have an idea about how much, the difference in opinion concerning what industries should be regulated and how to do it (government, private or self) allows for political interests to enter the debate, albeit possibly under the guise of safeguarding economic growth, protecting individual/state rights or any other reason. For example, the argument that the EU ETS violates American sovereignty has been deemed valid enough to present a case to the ECJ. Or to expand, many argue that the airline industry’s relatively low present contribution to the overall atmospheric emissions merits it to become a low priority in the climate change agenda and we should concentrate on other sectors instead.

We will find out around March 2012 weather the ECJ with uphold the EU ETS expansion, which is after the 1 January 2012 date when the expansion should have come into action. Even if the regulation is allowed to go ahead, private American companies have already successfully delayed an EU level progressive policy that aims to prevent rising temperatures.

 

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