America's warning to Eurocrats: Hands off our airlines

U.S Senate passes legislation to prevent American airlines abiding to EU Emissions Trading System (ETS)

by The Commentator on 25 September 2012 18:40

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It was announced recently that the U.S. Senate has unanimously passed legislation which would prevent American airline companies from receiving financial penalties under the European Union Emission Trading System (EU ETS).  

This will come as a relief to many anti-air tax campaigners, and signal a worrying shift in international policy towards the EU ETS scheme, which has sought to mandate climate change policies for the past seven years.

The Senate Bill which was passed on September 22nd will still need to be passed by the House of Representatives, but is so far sending out the message that the US has joined the opposition of other non-EU states such as China, India, and Russia who vehemently oppose the stealth tax on aviation.

Enshrined within the confines of Brussels, the EU ETS is considered a ‘cornerstone policy’ to combat climate change in 30 countries (all 27 member states plus Iceland, Norway and Liechtenstein).  As of January 2012, the scheme has expanded to include the aviation industry and by 2013 the European Union will seek to grab more from additional gases from petrochemical, ammonia and aluminum industries.

The move will further undermine the EU ETS scheme, which has received serious criticism in the United Kingdom. It will now be of great concern that smaller economies will perhaps rightly follow the example of the US and other major powers in rejecting the scheme.

Matt Sinclair, Chief Executive of the Tax Payers’ Alliance wrote for The Commentator in August 2011, “Even if we in Britain are prepared to stomach more expensive energy, the major developing countries that emit far more won't.”

Co-sponsors of the bill, Senator John Thune and Fellow Senator Claire McCaskill agree this would send a ‘strong message’to the EU that it could not impose such taxes on US airlines and US passengers.

Accordingly, the EU trading system can cap greenhouse gas emissions for carriers including those which are non-European airlines that fly in and out of the continent.

In a statement released by Nicholas Calio, president and CEO for Airlines for America, he refers to the scheme as ‘illegal’ and says, ‘This (illegal) scheme amounts to little more than a cash for grab for the European Union as none of the funds collected are required to be used for environmental purposes’.

The United States is not the only country to try and escape the imposition of heavy fines if their allowances do not cover all of its emissions.

In a report published earlier this month by the Congressional Research Service, China has opposed the regulation and says it will not buy emission allowances.

Even on the home front there is a sense of acceptance that foreign airliners will boycott the so-called ‘cost-effective’ policy.  Highlighted as an issue by British Airways’ corporate responsibility section, the airline company has said, ‘We believe it will lead to a negative battle at a time when we need a constructive debate on a global solution’.

The United States is banking on the issue to be resolved or reformed and is hoping to be on the political agenda of the next International Civil Aviation Organization (ICAO meeting) – scheduled for October 2012.

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