Europe backs down on international emissions trading

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In the face of concerted and worldwide opposition, the European Union has "temporarily" climbed down over its proposal to unilaterally impose its Emissions Trading System (ETS) on all flights serving the EU. It claims that this move is designed to speed progress toward a global market based mechanism (MBM) for controlling aviation emissions.

Opposition moves have been formidable. In December 2011 China warned the European Union it would not participate in the EU emissions trading scheme which had been declared compulsory for all flights serving Europe. In early February 2012 it ordered its airlines not to comply. Later that month some 25 nations - including China and the USA - met in Moscow to discuss joint action to defy the EU scheme.

From 1 January this year all EU carriers and foreign operators serving the EU were supposed to be keeping records of total emissions from flights with any part of their journey touching Europe. The first payments for emissions exceeding a carrier's allowance were originally supposed to be due in April 2013.

Next, on 22 September the US Congress passed a law enabling the transportation secretary to order American carriers not to participate in the scheme. On 14 November, Congress ratified the law in a vote that saw both parties united on the issue, and only President Barack Obama's signature is now awaited.

The announcement of the one-year suspension of the ETS came on 12 November. The European Commission announced that it was suspending - for a year - the requirement for participation by all international flights into and out of the EU, but retaining the scheme for EU domestic operations.

Reactions have been predictable. The Association of European Airlines has welcomed the scheme's suspension, as have the European Regions Airline Association and European charter carriers' trade organisation the International Air Carriers Association. The European Business Aircraft Association has declared itself "reasonably satisfied", but objects to the EU domestic application of emissions trading on the grounds that it should also be subject to global, rather than unilateral, agreement.

The US trade association Airlines for America (A4A) has not made a statement since the suspension, apparently having written off the EU scheme as irrelevant since the Congressional bill was approved. But A4A has gone on record as saying that the EU proposals "violate international law and US sovereignty". China and other states have said the same, darkly hinting not only at disobedience, but reprisals.

According to all parties except the EU institutions, the only workable MBM is a global one, and only the International Civil Aviation Organisation (ICAO) is capable of delivering such an agreement.

Meanwhile, the EU makes it clear that its preferred solution has always been a global MBM, but it says it became exasperated at the pace of progress towards that goal. EU commissioner for climate action Connie Hedegaard explained: "The EU has always been very clear: nobody wants an international framework tackling CO2 emissions from aviation more than we do. Our EU legislation is not standing in the way of this. On the contrary, our regulatory scheme was adopted after having waited many years for ICAO to progress. Now it seems that because of some countries' dislike of our scheme many countries are prepared to move in ICAO, and even to move towards a market based mechanism at global level."

If this sounds like claiming triumph in the face of defeat, Hedegaard explained further: "Very good news came from the ICAO Council last Friday. Among other things it was agreed that a high level policy group will be set up shortly, [and that] options for a regulatory MBM will have to be reduced from three to one." She refers to "explicit reference to the global MBM that the world needs to agree on," but does not quote the reference.

Hedegaard concluded: "In short, finally we have a chance to get an international regulation on emissions from aviation. This is a long-sought-for opportunity that we must use. This is progress! But actually to get there, a lot of tough negotiations lie ahead of us."

But she then returned to warning mode, saying: "Let me be very clear. If this exercise does not deliver - and I hope it does - then needless to say we are back to where we are today with the EU ETS. Automatically." She moved on to reclaim victory for European pressure: "We are creating this window of opportunity, this great chance. I can only recommend to all Parties to engage urgently in taking this issue forward. Now it is the time for paving the way for strong decisions to be taken by the next ICAO General Assembly. The European Union will engage fully and will work closely with the ICAO leadership. We are convinced others will do as well."