USA warns Europe to expect legal challenge on emissions trading

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Europe has been warned to expect an international legal challenge as soon as its new rules on emissions trading for aviation are built into national law.

Speaking at the Aviation and Environment Summit in Geneva, Nancy Young, vice-president environmental affairs at the Air Transport Association of America, said US airlines are being told to comply with the rules under protest, reserving their legal rights until the controversial obligations to pay for carbon emissions are challenged.

As yet no European state has adopted the directive into law, although early moves by the UK to adopt the recently published guidelines for airlines could make it a potential candidate for any challenge. The UK will be responsible for overseeing the vast rump of airlines flying into Europe. Study of how a member state chooses to build the directive in to its national legislation will be needed to examine compatibility with the legal basis of its bilateral agreements.

"The UK is the only one so far that has proposed to put a portion of the EU ETS into national law," said Young. She added that US airlines are further outraged that Brussels has sought penalties for non-compliance with the first deadline for submitting monitoring, reporting and validation guidelines, particularly as the directive is in its draft form and will not be finalised by early June.

She believes the renegade emissions trading proposals developed by Brussels will be ditched before its planned 2012 implementation because the international aviation community will settle on a better global agreement.

Referring to the work of the International Civil Aviation Organisation's special group attempting to reach global consensus on market-based measures, she said a global agreement is likely to address the different capabilities of developed and developing nations. "It may not be a one size fits all approach," she said.

The summit heard how ICAO's proposal will be presented by 23 October to the United Nations in time for the post-Kyoto talks in Copenhagen at the end of the year.

Speaking about the need for such an international global agreement, Young said governments around the world would need to recognise its significance: "We need governments to say 'that's the deal' and we won't hit you with multiple additional measures."

She added that a successful emissions trading regime for aviation would depend on its design. "If you are a climate change czar, emissions trading makes sense, but if you are the aviation industry, unless it is calibrated to take into account fuel efficiency and the high cost of capital and is improperly applied, it will take away your ability to invest in the very technology that can deliver significant emissions savings. The European ETS is one of the worst ways to come at it."