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US airlines attack European market-based solutions

It’s the market-base solution the US is fighting against. It is called the European Union Environmental Trading Scheme (EU ETS) and it has caused an almighty row between the US and Europe, which has ended up in the European courts.

The EU ETS has been in place for some years but what has caused the friction is the decision by the European Union to include aviation in the scheme from next year. What is means is that planes landing at or taking off from European airports will need to trade their carbon emissions. What the US is unhappy about is that it includes all planes from all countries using EU airports, not just European ones.

It is not as if the proposal is going to bankrupt the US airlines or penalize their passengers unduly. It is expected that it will no more than about $10 to the price of a transatlantic flight. In fact, green groups have complained that it is far too modest; that it will have only a negligible effect on the efforts to cut climate change emissions. They point out that many airports and airlines in Europe lobbied for the scheme because they were afraid of the alternatives, direct taxes on emissions or fuel, which would cut demand.

The US case, brought by three US airlines and their trade association, the American Air Transport Association (ATA), claiming that the extension of EU ETS to foreign carriers was unlawful, was heard at the European Court of Justice on July 5. Judgment will be given on October 6.

If the US wins the court case, it will be a grim day for climate change. Aviation, along with shipping, is the fastest-growing source of CO2 emissions. If even this modest proposal is not acceptable, what hope is there of real change.


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