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The 'EU Must Remain Tough' on Emissions Trading


Europe's highest court has backed an EU emissions trading scheme for the aviation industry, angering leaders and airlines abroad. Experts warn the ruling could spark a trade war. Despite the tensions, German commentators on Thursday encouraged EU officials to stand strong on climate protection.


As of Jan. 1, 2012, all airlines that take off and land in Europe must purchase permits for the right to release carbon dioxide emissions. In a final ruling on the matter handed down on Wednesday, the European Court of Justice decided that including foreign airlines in the European Union emissions trading scheme (ETS) was permissible and that the new legislation did not infringe upon the sovereignty of other states and was compatible with international accords.

Though the decision from the EU's highest court was expected, some fear it may spark a trade war with international partners, such as the United States, China and Russia. The ruling, which came in response to an appeal by a group of US airlines, is vehemently opposed in Washington. US Secretary of State Hillary Clinton herself pressured the EU ahead of court proceedings, writing in a letter to officials that the US "will be compelled to take appropriate action" in the case of an unfavorable decision.

Already in October, some 26 countries, including heavyweights like the US, China, India and Russia, penned a collective statement to protest the measure.

The US has responded to the ruling by saying it wants the International Civil Aviation Organization (ICAO) to review the plan. "We continue to have strong legal and policy objections to the inclusion of flights by non-EU air carriers in the EU ETS," Krishna R. Urs, deputy assistant secretary for transportation affairs at the US State Department, wrote in statement on Wednesday.

Though the US airline industry group Airlines for America said it was exploring its legal options, it also agreed to "comply under protest." The ETS, agreed upon in 2008, is expected to create extra costs for airlines of some €9 billion ($11.8 billion) by the end of 2020, with low initial charges that will rise gradually. At first, 85 percent of emission rights will be allocated free of charge, but the airlines will have to pay for the remaining 15 percent. The ETS will raise passenger costs by between €2 and €12, according to European Commission estimates, but airlines have said they expect extra charges to be much higher.

EU Officials React with Resolve

In addition to the US, China also slammed the EU court's decision, with a commentary from the state-run Xinhua News Agency calling the ETS a "trade barrier" and rejecting its "unilateral" imposition. The agency, which often mirrors official government positions, also said: "It will be difficult to avoid a trade war focused on an aviation 'carbon tax'."

The China Air Transport Association (CATA) has estimated that, in the first year of the scheme, its members will accrue extra costs of 800 million yuan ($123 million), which would triple by 2020.

"In fact, many countries have voiced their opposition to the EU scheme, and we hope the European side will act prudently and take an active and practical attitude in appropriately consulting about it with all sides, including China, to deal with the issue," Chinese Foreign Ministry spokesman Liu Weimin told journalists on Thursday.

But EU officials appear to be standing their ground against the international pressure. "After a crystal-clear ruling today, the EU now expects US airlines to respect EU law as the EU respects US law," EU Climate Commissioner Connie Hedegaard, a staunch backer of the program to fight climate change, wrote in a Twitter post. "We reaffirm our wish to engage constructively with everyone during the implementation of our legislation," she added in a statement.

Following unsuccessful negotiations during the recent United Nations climate summit in Durban, South Africa, the atmosphere has been tense between Europe and its opponents on such climate issues. "I see a certain danger that the argument over the EU measure will escalate," says Eric Heymann, environment and transportation researcher for Deutsche Bank. "There is a danger that Russia could charge even more expensive fees for European airlines' fly-over rights in its massive air space." Other countries outside the EU could also limit take-off and landing rights at their airports, thus weakening European airlines, he told SPIEGEL ONLINE.

Although German commentators on Thursday recognized the dangers of a looming trade war, they urged EU officials not to give in to pressure from abroad.

The center-left Süddeutsche Zeitung writes:

"The verdict is clear, unequivocal and of fundamental importance for international climate policy. ... With this, Europe's judges aren't just showing that their climate-protection laws are internationally compatible and now apply to everyone. They are also rescuing climate protection from obscurity. The verdict should be understood as a loud signal for the resurrection of climate-protection efforts crippled by the dramatic debt crisis."

"Behind the scenes, the battle turned into a foreign policy affair of the highest level. Hillary Clinton intervened personally. ... But the intervention was ineffective, and that's not so surprising. The line of action from the American government is simply audacious. It shows once again that the Americans -- and the Canadians, as well -- can talk up climate protection, but their words aren't backed up by actions. Above all others, it is the United States, even under President Barack Obama, that repeatedly avoids any kind of binding climate-protection agreement, thus blocking international treaties just as they did at the climate conference in Durban. ... But it took the judges in Luxembourg to prevent the Americans and Canadians from also blocking European climate goals."

The left-leaning daily Die Tageszeitung writes:

"The European Union is having an existential crisis. What big idea will emerge for the union to stand for? Perhaps it will be a story of a new ecological economic order. With its verdict, the European Court of Justice has shown what that can mean in practical terms."

"With this, it enforces the principle according to which those who damage the environment are forced to pay for it. The most important principle in the fight against global warming -- the market -- also comes into play."

"It is senseless to tie the emission of greenhouse gases to national sovereignty -- as if CO2 stops at international borders. That's why the EU must remain tough. After all, environmental protection is more important than global trade. If the EU commits to this idea, there will be more conflicts with the US. That's why it would be a meaningful moment to also campaign internationally for an ecological economic order."

The Financial Times Deutschland writes:

"With its final ruling, the EU is setting an important and practical goal. From now on, airlines will be financially sanctioned for high CO2 emissions. Those who want to avoid these charges will have to quickly implement reduced-emission, fuel-efficient engines."

"For the purposes of environmental protection, this is long overdue, particularly because global air traffic and its ecological consequences will continue to increase. Countries such as the United States, India and China seem to be indifferent to this. ... This ignorant stance is hardly a surprise, just as the climate conference in Durban proved."

"The political battle is probably not over, though. The US government is blustering over the verdict, and Secretary of State Hillary Clinton has threatened to retaliate against European airlines. Russia and India are openly considering slashing fly-over rights for European airlines. But applicable law can't be annulled by these blackmail attempts."



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