If you are running out of time, you shall not to stop the clock: reflections on the European Emissions Trading Scheme and aviation

The European Union had taken a determined step to include the highly polluting sector of aviation under the European Emission Trading Scheme (EU ETS), and therefore, it is submitted that the recent decision to suspend the application of the EU ETS to international flights constitutes a huge mistake.

According to the IPCC1, Aviation represents at least 3.5% of the global greenhouse gas emissions (GHG), which represents a higher number than the total emissions delivered by the whole African continent. Moreover, the damage caused to the environment by burning fuels at altitude doubles the damage that would be caused at ground level. If IPCC calculations are right, emissions from aviation will grow from 584MT in 2010 to 2377MT in 2050. Since flying is becoming cheaper, travelers tend to favor air transport even for short distances that could be easily covered by train in a few hours.

Even though aviation represents a big environmental problem and the international arena remains the best regulatory level, aviation is expressly excluded from the scope of application of the Kyoto Protocol, which only mandates in article 2(2) that limitation of emissions of aviation should be pursued through International Civil Aviation Organization (ICAO). As a result airlines are free to pollute as much as they want for the moment.

Having tried and failed to reach an agreement at ICAO level, the EU decided to enact Directive 2008/101, to include every flight taking off or landing at an EU airport under the EU ETS, unless the airline came from a country where similar environmental standards were applied. This decision was quickly opposed by US, China, India and some other major developing countries. US airlines decided to start legal actions to challenge the validity of the EU measure before the European Court of Justice, which in December 2011 established that the inclusion of aviation was in conformity with international and European law.

China and India did not accept the decision and prohibited their airlines from taking part in the European scheme. The US Congress and Senate have approved a similar provision, which still waits for the ratification of the US President. Moreover, China has cancelled some Airbus orders as a retaliation measure against the EU. On the other hand, Australia has announced its intention to link its emission trading system with the EU ETS, and Norway, Liechtenstein and Iceland have already joined the EU ETS.

Contrary to what airlines say, the EU ETS was not a radical environmental measure bearing enormous economic costs. In fact, 85% of the carbon allowances were going to be given for free during this first period and the cap was set in 97% of current emissions, that is, a 3% reduction. For instance, the EU ETS tax charged by Ryanair in a flight from Madrid to Brussels is 0,25€.

So far, so good. However, in November 2012, the EU Commissioner for Climate Action, Ms. Conie Hedegaard2, announced that she had advised the EU Member States to suspend the application of the EU ETS to flights coming from or into the European Union (domestic flights are still kept under the EU ETS), as a means of facilitating agreement at ICAO level in the General Assembly of the organization, which will be celebrated in Fall 2013. In the words of the Commissioner:

“I’ve just recommended in a telephone conference with the 27 Member States that the EU “stops the clock” when it comes to enforcement of the inclusion of aviation in the EU ETS to and from non-European countries until after the ICAO General Assembly next autumn.”

It is submitted that this change of mind constitutes a huge mistake, because of several reasons.

First, this decision does not avoid confrontation with foreign airlines. For example, a Vienna-Madrid flight operated by a Chinese company will still be covered by the EU ETS, meaning that, since Chinese companies are forbidden by their government to submit to the EU ETS, the EU would have to fine them and eventually to ban them from the EU air space, risking starting a trade war.

Second, the suspension could weaken the Member States negotiating position at ICAO in 2013, since their main negotiating weapon (the EU ETS) has for the moment been suspended.

And third and more importantly, we are running out of time when fighting climate change and we cannot afford now to postpone the solutions. It is highly unlikely that countries like China and India could agree to any efficient measure to cut emissions from air transport. If we look at the parallel example of shipping, we see that they have even opposed the humble international shipping standards to reduce emissions which were agreed at the International Maritime Organization level.

In the case of aviation, any international agreement would need to apply to all countries in the world, no matters if developed or developing, because the subject here are airlines, not States. If airlines from developing countries were excluded, that many airlines from developed countries would reflag under developing countries, so they will also be granted exemptions. As a result, an agreement accepted and applied by a big majority of countries would be necessary and desirable, but unfortunately, it does not seem realistic for the moment.

Our planet cannot withstand a single year more of regulatory inaction and absolute freedom to pollute for airlines. All the efforts to reduce emissions made by the electric and industrial sectors, which are currently under the EU ETS, are being counterbalanced by the striking growth of emissions from international transport, and in particular by aviation.

In conclusion, it would be convenient that the European Parliament and the Member States opposed to the suspension of the EU ETS applied to aviation. It’s not time to stop the clock, but to act and to recover the time lost.

1 IPCC Special Report on Aviation and the Global Atmosphere, 1999

2 Press release: http://europa.eu/rapid/press-release_MEMO-12-854_en.htm