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Eurozone’s misguided “green” air cargo policy

Several countries, including India and China, have prohibited their airlines from participating in the EU scheme.
By Patrick Burnson, Executive Editor
June 07, 2012

Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, is joining Transportation Secretary Ray LaHood in resistance to the application of the European Union Emissions Trading Scheme (EU ETS), which seeks to unlawfully tax U.S. airlines and establishes a dangerous precedent that could be used to tax the products and services of other U.S. industries.

Several countries, including India and China, have prohibited their airlines from participating in the EU scheme. The U.S. House of Representatives has taken similar action and A4A called on the Senate to pass S. 1956, the European Union Emissions Trading Scheme Prohibition Act, which would similarly prohibit U.S. carriers from participating in the EU ETS.

“Urgent, concrete action by the United States is needed to overturn the EU ETS and bring the EU back to the negotiating table in support of a global framework,” said A4A Vice President, Environmental Affairs Nancy Young, recently testified before the Senate Commerce Committee. “The United States, in its role as a world leader, must wield the tools it has to remove the wrong measure in favor of the right one.”

A4A urged the United States to initiate a legal challenge under Article 84 of the Chicago Convention through the International Civil Aviation Organization (ICAO) in order to drive the EU to negotiate a resolution. ICAO has authority to address violations of the Chicago Convention and also is working to complete the global framework for aviation greenhouse gas emissions provisionally agreed at its 2010 Assembly.

A4A, its members and every impacted non-EU country opposes the application of this cap-and-trade tax scheme to airlines and aircraft operators, and are committed to seeing it overturned. As currently administered, U.S. carriers must account for emissions on the ground in the United States, across Canada and across the open seas, paying tax on 100 percent of the emissions of flights to and from the EU, even though only a small portion of those emissions occur in EU airspace. The funds collected do not have to be used for environmental purposes and in fact can be used to stave off Europe’s debt crisis.

Young noted that aviation is not the only U.S. sector at risk. “Simply put, if the EU can tax the emissions over the entirety of a flight merely because it touches down in Europe, what is to keep the EU from imposing greenhouse gas import taxes on U.S. autos, pharmaceuticals, chemicals and other goods? And on what basis will the United States stand up against other countries that seek to do the same?” Young said.

At the same time, it is important to note that A4A and its member airlines are aggressively reducing greenhouse gas emissions from aviation and, with fuel-efficiency improvements.

They have been eliminating 3.3 billion metric tons of carbon dioxide since 1978, and have a strong record of meeting that commitment.

By investing billions of dollars in fuel-saving aircraft and engines, innovative technologies and advanced avionics, the U.S. airline industry improved its fuel efficiency by 120 percent between 1978 and 2011, resulting in emissions savings equivalent to taking 22 million cars off the road each of those years.

 

About the Author

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Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


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