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Soapbox - Europe’s Eco-Tax Misfire

Nicholas E. Calio, President and CEO of the Air Transport Association

Nicholas E. Calio, President and Chief Executive Officer of the Air Transport Association

Greenhouse gas emissions have a global impact and airlines understand that. Members of the Air Transport Association (ATA)—the trade group for US airlines—have worked hard to develop and commercialize alternative jet fuels, retire older aircraft, and implement new, fuel-efficient operations and technologies.

Thanks to these and other efforts, worldwide aviation accounts for only 2% of man-made carbon dioxide while contributing more than 8% of the world’s gross domestic product. US airlines improved their fuel efficiency by more than 110% between 1978 and 2009, saving 2.9 billion tonnes of CO2, equivalent to taking more than 19 million cars off the road in each of those years. They are also part of a global coalition of airlines, aircraft manufacturers, airports, and navigation service providers that have committed to reduce emissions even more—the kind of cooperative, consensual global approach that will produce tangible results that serve the social and economic interests of consumers.

Unfortunately, the European Union (EU) has rejected a cooperative approach to the climate-change challenge and, instead, has unilaterally decided to create its own scheme and insist that the airlines of the world follow it. As many learned during an important hearing in the European Court of Justice in early July, the EU Emissions Trading Scheme (ETS) would cover emissions over the entirety of flights that land or take off in the EU, regardless of who operates those flights or where they occur.

In other words, the EU intends to impose its will on the airlines of other countries without regard to accepted international law and in violation of international treaties. The ATA initiated the legal case against the trading scheme but is far from alone in its outrage. A majority of the world’s airlines, and the governments under which they operate, disagree with the EU. If the lawsuit is unsuccessful, other legal actions, in particular by governments, are likely.

The legal case focuses on the unilateral approach of the EU. Airlines recognize that greenhouse gas emissions, including those from aviation, must be addressed. But the proper way to address the issue is through a multilateral approach. The piecemeal EU ETS will only bring chaos to the world stage.
More important, the EU ETS is bad policy. It will add billions of new costs that will in no way benefit the climate. Instead, it will undermine the ability of airlines to invest in new aircraft that will help reduce emissions. It will take away the capital needed to finance ventures that will develop alternative fuels.

Who, then, does the EU ETS benefit? The answer is simple—the governments that will rake in billions of euros from selling emission credits, as well as the banking and financial institutions that will manage the emission credit markets. Lining the pockets of governments, banks, and their investors will not reduce aviation greenhouse gas emissions by a single tonne.

Last October, the International Civil Aviation Organization established an outline for a global aviation agreement, which included emissions targets and timelines, roles for industry and governments, and a set of consensus principles for emission‑reducing measures that would meet these goals. The goals will be realized only if the EU comes to the table and works in good faith with other governments to turn the proposed outline into a full, implementable pact. That is the right way to solve this problem—and US-based airlines are committed to being part of that solution.

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