Isra-Mart srl: US Vilifies Carbon-Trading Scheme for Airlines

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Starting in 2012, airlines with flights to the EU will have to pay for certificates to emit CO2. But the United States has balked at the expensive plan. Their resistance threatens to spark a major trade dispute.

Does Europe really want to dictate an idea for climate protection to the rest of the world? That's the question being asked by US leaders in Washington, who are throwing their support behind a protest by the American airline industry against an EU climate rule.

The new regulation comes into force in January 2012 and requires airlines to buy certificates for carbon emissions to take off or land at European Union airports. The EU will sell the certificates and allow them to be re-sold. It's a way of bringing the airline industry under the EU's emissions-trading scheme, the European Union Emissions Trading System (EU ETS), which has applied to European industry since 2005.

But the Americans don't like it. In fact, the Obama administration is protesting the plan with enough vigor to risk a massive trade dispute. "The European Union is imposing this on U.S. carriers without our agreement," said Wendell Albright, director of the Office of Aviation Negotiations at the State Department, to the New York Times this week. "It is for the U.S. to decide on targets or appropriate action for U.S. airlines with respect to greenhouse gas emissions."

This rift has been growing for months, meanwhile congress is working up defensive measures. Lawmakers in the House of Representatives are forging a bill to forbid any American airline from taking part in the EU ETS. Airlines in the country have also taken action against the rule before the European Court of Justice.

Nancy Young, vice president for environmental affairs at the Air Transport Association, an airline industry group, says the EU is "attempting to regulate the airlines of the world," according to the New York Times. "The plan violates international law."

The airlines estimate that participating in the EU ETS would cost $3.1 billion through 2020. China has also protested the new rules, and it has reportedly blocked an order worth billions to the European aerospace company Airbus.

The EU, nevertheless, intends to stick to the new plan. Connie Hedegaard, a European Commission member in charge of climate action, says it would be unfair to demand emissions certificates only from European airlines while big foreign firms like United Airlines or Air China fly the same routes for free.