EU Emissions Trading Scheme: What Else Can Be Done?

Late December 2011, the Court of Justice of the European Union (CJEU) approved European Union (EU) plans to include international aviation in the EU emissions trading scheme (ETS) from 2012. Having gone ahead to implement the ETS after other regions had condemned the proposal suggests that the EU has a sort of disconnect with the global air transport industry or simply chooses to distort the cohesion that has increasingly thrived in the global aviation industry.

ICAO President, Roberto Kobeh Gonzalez The global aviation industry has over the years learnt to overcome its never-ending challenges by simply working together. In this regard, words like collaboration, coordination and cooperation have become very popular recurrences in everyday activities of decision-makers and individuals in the industry. Apart from working together, another concept that has significantly sustained focus in the industry is unified leadership through the International Civil Aviation Organization (ICAO). These two concepts have brought high-level sanity, efficiency and effectiveness in all aviation regions. This is strengthened by the resolve of the regions to meet regularly to evolve and agree on guiding principles, strategies and best practices better known as ICAO standards and recommended practices. For instance, the industry has worked, and is continuously working, together to address disturbing issues on aviation safety and security. And the current global accident record, for example, is a testimony of the effect of working together. The aviation industry has also made cooperative efforts to address issues on environment with tasking and brave timelines already set on various stages of mitigating and eliminating eco-harmful emissions. As expected, the decision of the European Court and the subsequent imposition of the ETS on non-EU airlines has been globally condemned from the Asian region, Africa and America. International Air Transport Association's (IATA) has also maintained its call for an ICAO-led approach to combating emissions. Mr. Tony Tyler, the Director General and CEO of IATA, says this "decision is a disappointment but not a surprise. It does not bring us any closer to a much-needed global approach to economic measures to account for aviation's international emissions." IATA says the CJEU decision in 2011 was in response to a legal challenge presented by the Air Transport Association of America (now Airlines for America), a number of US airlines, IATA and the National Airlines Council for Canada. Together they argued that the EU ETS contravened the Chicago Convention which prohibits such taxation of international aviation. "The CJEU ruled that the Chicago Convention does not bind the EU which is not a signatory and that the ETS does not violate any other aspect of international law," IATA says. However, decisions that do not violate aspects of international law are expected not to run against positive aviation improvement efforts, but rather promote such efforts. The air transport industry, according to IATA, has made global commitments to improve fuel efficiency by 1.5% annually to 2020, to cap net emissions from 2020 and to cut net emissions in half by 2050 (compared to 2005 levels). "A global framework for economic measures is a critical component of our strategy to achieve these challenging targets. But we won't get agreement on a global approach if states are throwing rocks at each other because Europe wants to act extra-territorially.  Europe should take credit for raising the issue of aviation and climate change on the global agenda. But what is needed now is for Europe to work with the rest of the world through ICAO to achieve a global solution.  Today's decision has not changed that reality," states Mr. Tyler.

According to IATA, at ICAO's 37th Assembly in 2010, 15 principles were agreed through ICAO for a global framework on economic measures. A commitment to develop a framework based on these measures for agreement at the 38th ICAO Assembly in 2013 was also achieved. Judging by ICAO's on-going self-regulatory efforts and plans so far on addressing the challenges of emissions, what is expected of every aviation region is strong support to such ICAO initiatives since air transport and civil aviation impact on every part of the world.

The EU action could have been a wake-up intervention if there were no efforts by the global aviation industry to counter emissions. Essentially, the EU may reconsider the self-imposed and very commendable emissions reduction targets of the aviation industry with a view to supporting the actualization of such already ambitious targets.

Though some airlines may comply with the EU's unilateral trading scheme presumably because of fear of ill-consequences on their own operations, it is still not late for the EU to revert to the status quo ante. Despite the idea that EU has the right to take a unilateral decision on the emissions challenge as expressed by the European Court, the EU should be able to understand the challenges of the air transport industry concerning the heavy burden of sundry costs on airlines. Besides, the EU should be mindful of not setting an unsavoury example of regions taking actions that can truncate the otherwise smooth sailing of ICAO global leadership and orderliness in civil aviation activities.

Nothing short of all governments synchronizing their response to emissions challenge   with   ICAO   initiatives   could Promote global efforts to achieve harmonious growth and development of civil aviation. Already, Chinese airlines have shown unwillingness to pay the EU imposed charges on emissions while American airlines are seeking legal intervention. In Africa, the industry may not just grin and bear it, as the EU action is seen by many as unnecessary 'arm-twisting'. "The CJEU decision may reflect European confidence in European plans. But that confidence is by no means shared by the outside world where opposition is growing. A formal resolution of the ICAO Council supported by 26 countries urged Europe to take a different approach. India is reported to have instructed its airlines not to comply. Similar legislation is moving through the US Congress. Other legal challenges are expected. And on 16 December the US Secretaries of State and Transportation warned that the US would be compelled to take appropriate action if Europe does not re-think its plans," says Mr. Tyler. IATA says the US letter noted that at least 43 countries have publicly objected to Europe's plans.EgyptAir is one of Africa's airlines flying to the EU region and affected by the new EU ETS

Retaliatory actions as is widely expected now from regions outside the EU may not be limited to the aviation industry as some observers hope to see. Though this is not necessary, what is critically constructive now is for the EU to work closely with the aviation industry through ICAO which has an effective unified approach capable of addressing the aviation emissions question. The best is necessary for growth of global air transport. Only proper understanding and non-violation of the cooperative and cohesive system of global civil aviation can guarantee a growing but not reclining aviation industry which plays a pivotal role in global economy.

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