Airlines attack EU aviation emissions levy

Dan Milmo
The Guardian,
Monday July 21, 2008

Imposing an emissions trading scheme on airlines flying through Europe has "no chance" of succeeding and could incite a trade war with the United States, the global trade body for commercial carriers has warned.
Giovanni Bisignani, chief executive of the International Air Transport Association (Iata), said that the European parliament's vote to include airlines in a carbon emissions trading scheme from 2012 would trigger a confrontation with non-EU countries. The US has threatened to challenge the scheme in the international court of justice because it would breach international aviation agreements.
"The scheme has no chance. It is difficult to imagine 136 countries agreeing with something that is illegal. Why are we wasting so much time instead of building a global, harmonised emissions trading scheme?" said Bisignani. The scheme would add at least €39.60 (£31.40) to the cost of a long-haul return flight and €9 to a short-haul return trip, according to European commission estimates - forecasts that airlines now say are too low.
Iata claims that acquiring carbon credits in order to enter this scheme would cost the industry $3.5bn (£1.75bn) in 2012 alone - equivalent to two-thirds of the global industry's profits last year. Under the terms of the scheme, all airlines flying to and from the EU will have to acquire carbon credits to account for the emissions generated by their flights.
An EU spokeswoman said the inclusion of airlines in the trading scheme was necessary to create "a level playing field" among carbon-dioxide emitting industries. The airline industry accounts for less than 2% of global emissions. Asked if the EU was confident that the scheme was legal under international law, she said: "We have no indication that the system will not work."
Bisignani said the International Civil Aviation Organisation, a UN body, should be given more time to draft a global trading scheme. That notion has been attacked by politicians, including the UK transport secretary, Ruth Kelly, who accused ICAO of failing to live up to its leadership role.