EU’s Fancy Flight Emissions
Twenty-six countries, including India, are meeting in Moscow tomorrow to discuss the EU’s unilateral action to control greenhouse gas emissions from aeroplanes flying over European airspace. Under the scheme that came into effect in January 2012, airlines flying to the EU will have to buy tradable carbon credits as part of the EU’s broader emissions trading system (ETS). Worse, they will have to pay even for air-miles clocked outside European airspace. The outcome of the meet will determine whether the EU’s action will lead to retaliatory moves that hurt everybody or whether the EU will read the writing on the wall and withdraw. As of now, a confrontation looms. (China has already debarred its airlines from participating without government approval). Ironically, the issue — airline emissions — has no great immediacy.
In global terms, airline emissions are relatively small, accounting for only about 3% of total emissions. The move has been on the anvil for some years now, but the EU’s action needlessly queers the pitch when the need is for global cooperation rather than confrontation. What is surprising is that the EU should have chosen to go ahead when it needs the rest of the world to lend it a helping hand.
At the Air Show in Singapore earlier this month, the European Commission’s vice-president for transport, Siim Kallas, was emphatic the EU would not suspend the legislation, saying it is a ‘very high-profile environmental issue’ . The EU’s action has riled other countries. Airline companies and aircraft manufacturers have also joined forces as they fear the move will result in higher air fares and impact air travel adversely. Estimates of the additional cost on airlines vary.
An analysis by Thomson Reuters Point Carbon estimates airlines face a carbon pollution bill of €505 million for 2012 under the ETS. The China Air Transport Association estimates the scheme would cost Chinese airlines 800 million yuan ($127 million) this year, and more than three times as much by 2020. But EU officials say the costs of the scheme, if passed on to passengers, would add no more than around €2.50 ($3.30) to the price of a oneway ticket between Europe and China.
By slapping an ETS surcharge on tickets, airlines , it is argued, could even profit from the scheme, as Ryan Air hopes to do. So, the battle lines are drawn ; a legal challenge mounted by a group of American airlines was dismissed by the European Court of Justice in December. But that is unlikely to be the end of the matter. The only way non-EU governments can come to the aid of their airlines, many of which are state-owned , is to stop them from flying into the EU, or to introduce an equivalent mitigation regime of their own. Neither is feasible.
At the just-concluded 10th ministerial meeting on Climate Change of the Brics — Brazil, Russia, India, China and South Africa — in New Delhi, minister for environment and forests, Jayanthi Natarajan , made no bones about the opposition of the Brics to what she called a ‘unilateral trade action disguised as a climate change action’ . She is spot on.
The EU’s scheme goes completely against the principle of ‘common but differentiated responsibilities’ under which mitigation costs of reducing greenhouse gas emissions are less onerous for developing countries than for rich ones. This has been a key principle underpinning previous UN climate change agreements including the Kyoto Protocol. But there is time to resolve the issue before it goes out of hand. Airlines are not due to be billed until April 2013. Even then, they will have to pay for only 15% of their emissions since the scheme envisages their buying tradable permits for a gradually rising portion of their emissions. This year, the EU will give airlines permits to cover 85% of their emissions. The best way out would be to get the International Civil Aviation Organisation (ICAO) into the picture.
There is no disputing that between unilateral or bilateral actions and multilateral actions, the latter are bound to be much more acceptable. There is also no disputing that though airline emissions are low at present, they are rising fast: between 2005 and 2010, they grew 11.2%. But as with trade negotiations, where the multilateral deals via the WTO, despite its bumbling pace of progress, are widely accepted as superior to bilateral trade deals, so too with environment negotiations. The multilateral route (read: ICAO) is the way to go.
True, the ICAO has been a rather ineffective body. So much so that in 2004, it ruled out negotiating a global deal to curb the emissions of all airlines, instead recommending that countries include their airlines in whatever national mitigation scheme they had in place. In November last, however, it changed tack and resolved to accelerate steps to introduce its own mitigation efforts. Hopefully, the stand-off between the EU and the rest of the world will compel it to play its rightful, more activist role.