EU carbon tax faces opposition from rest of the world

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An Air China Boeing jumbo jet in the sky. The Chinese government is banning its airlines from participating in the EU carbon trading scheme.

Delegates from 26 countries are meeting in Moscow to discuss measures against the new EU carbon tax on airlines amid concerns of a looming trade war.

Since January, all airlines using EU airports have to buy a permit under the EU Emissions Trading Scheme, a move that is putting strain on airlines already struggling with higher fuel prices.

China, India, Russia and US are among the top countries opposing the EU tax. Critics argue that Brussels has no right to impose taxes on flights to or from destinations outside Europe.

However, the European Court of Justice ruled out in December that EU tax on CO2 emissions from aircraft was legal. The Emission Trading Scheme (ETS) creates permits for carbon emissions. According to this scheme, airlines that exceed their allowance will have to buy extra permits, as a form of incentive for airlines to pollute less.

The number of permits has been reduced over the period of time, so that total CO2 output from airlines in European airspace falls.
Connie Hedegaard, EU Commissioner for Climate Action, said opponents of the deal should work with the EU to create a global scheme to cut aviation pollution.

“Nobody would be happier than the EU if we could get such a global deal,” she said Today Programme on BBC Radio 4.

“Nobody has fought harder than the European Union over the years to get a global deal,” she added.

She also argued that the existence of EU’s permit scheme might make some countries shift their position “so that we would get the global deal which is preferable.”

China on the other hand is also opposing the EU carbon tax. Chinese central government earlier this month ordered all airlines not to take part in the scheme unless they received government approval.

Russian Transport Minister Igor Levitin told transportation delegates from 26 countries that Russia “shared the position of China and US in opposing airline involvement in European emission trade.

Levitin said: “We believe that market measures to introduce levies on greenhouse gas emission and other decisions on environmental protection should be agreed by all sides after achievement of consensus, within ICAO.”

According to 26 countries that have gathered opposing the carbon tax argues that EU is forcing carriers to pay for emissions in places it has no jurisdiction over and trying to extend its authority outside its own airspace hence violating international trade conventions.

EU CARBON PROTEST

Most of countries from Latin America, Middle East and Asia have previously held meetings to issue a joint declaration opposing the EU plan.

However, EU insists it wants to include all airlines in its plan only because ICOA failed to deliver global solution for rising airline emissions.

Climate Commissioner Connie Hedegaard, speaking from Nairobi, said EU would stand firm and that the polluters have to pay.
She said: “To get the pricing right so that there is an incentive for company to pollute less, to be more resource-efficient, to be more energy-efficient that is part of the key to a more sustainable future.” She also said that she would be delighted if year after ICOA will be able to deliver valid scheme.

Last December, US also rejected the EU carbon tax on airlines and also tried to block EU to levy emission plans, saying they were invalid.

US and Canadian carriers also argued that the charges would violate climate changes and aviation pacts.

However, on Tuesday Brussels, finance ministers approved statement saying carbon price of global aviation and shipping “generate the necessary price signals” that can help in achieving more emission reduction and would generate more large financial flows to combat climate change.

TIT-FOR-TAT

This year, most of EU carbon credits will be granted for free, however, airlines must trade credits to cover the rest, the cost will be increasing from 2013 onwards.

According to China, the plan would cost Chinese airlines an additional $124 million towards operating costs. Analysts predict the burden could jump manifold by 2020.

Sources: Reuters, BBC News

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