For Brighter Skies, Europe Should Stay on Course with its Aviation Directive

The highest court in Europe, the European Court of Justice, issued a preliminary opinion on Thursday, Oct. 6 saying the EU’s pioneering law to curb aviation pollution is consistent with international law.  EDF and the five other European and U.S. groups that have intervened in the suit in support of the EU law called the opinion “very encouraging.”

In the commentary below, which I drafted at the invitation of Point Carbon’s Carbon Market Europe, I discuss the significance of the opinion and what the Aviation Directive could mean for industries in Europe and around the world.

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For Brighter Skies, Europe Should Stay on Course

By Annie Petsonk, International Counsel, Environmental Defense Fund (EDF is part of a transatlantic coalition of environmental groups that are intervener-defendants in the litigation).  Published Oct. 7, 2011.

Yesterday’s preliminary opinion by the Advocate General of the European Court of Justice in the “aviation case” offers a refreshing prospect for climate policy and a potential boost for low carbon economic growth. But whether European political leaders can consolidate those gains will depend on two developments, only one of which is within their control.

The background: U.S. airlines have fought carbon regulation for almost twenty years, since the mid 1990s, when climate scientists began quantifying aviation’s impact on global warming, and policy-makers began discussing how to allocate emissions from flights originating in one country and traveling to another.

A preliminary opinion from Europe's highest court could offer a boost for low-carbon economic growth in the aviation industry. (Thanks and photo credit to Flickr user ELTMAN.)

In 1997, during the talks that led to adoption of the Kyoto Protocol, airline lobbyists pressed for and obtained language in Article 2.2 of Kyoto stating that Parties included in Annex I “shall pursue” limits on these aviation emissions “working through the International Civil Aviation Organization” (ICAO).

European governments dutifully pursued these limits working through ICAO. But a decade of ICAO talks produced no such limits. So the EU launched stakeholder consultations on including aviation in the EU Emissions Trading System (ETS). The result was a law capping the emissions of flights landing at and taking off from EU airports. The law, which passed with an extremely broad parliamentary majority and the support of all EU Member States, is non-discriminatory. Its first caps, admittedly modest, start January 1, 2012.

Virtually all airlines are preparing to comply, filing emissions data and applying for the law’s generous free allowances. But United/Continental and American Airlines sued to block the law. They argued that under ICAO’s Chicago Convention on civil aviation, the ETS is an illegal tax. They claimed that Kyoto’s “pursue through ICAO” language precludes the EU law. And they asserted that a nation may only regulate emissions during the transit of its sovereign airspace, perverse results notwithstanding. Yesterday’s in-depth preliminary opinion by the Advocate General of Europe’s highest court rejected these claims.

What happens next turns on two developments. First, will the full Court follow the Advocate General’s careful reasoning? It might not, but past practice indicates a strong possibility that it will. Second, will EU policymakers carry through with the law that the Advocate General’s opinion powerfully supports? U.S. airlines are ramping up the heat. They say the ETS will cost them billions. (Independent analyses conclude that any fare increases are likely to be trivial – in the range of $3-6 per ticket.) They’re seeking a U.S. Congressional enactment making it illegal for them to comply with the EU-ETS, effectively daring the EU to enforce its law and goading tit-for-tat retaliation. And they’ve persuaded their friends in the U.S. Transportation Department to sign a statement in Delhi that ICAO is the only forum for regulation of aviation pollution (but not offering ideas for overcoming old logjams).

On this point the Advocate General’s opinion is clear: The EU is not required to wait indefinitely for ICAO. While multilateral solutions are preferable, multilateral inaction is no bar to regional action. Transport officials from Italy and The Netherlands are already feeling the heat. It will take fortitude for the EU to stand firm, but it is essential.

The Advocate General’s opinion found that the ETS is a market-based measure where allowance prices are determined by supply and demand. Supply and demand fundamentally reflect market perceptions of whether governments will implement law. When governments hold to their regulatory commitments, regulated parties, investors, and entrepreneurs compete to meet and beat pollution targets. The EU’s ability to generate the lion’s share of the $140 billion global carbon market, and Germany’s ability to generate low-carbon jobs even in difficult economic times by maintaining tough emissions limits and strong clean energy policy, demonstrate the power of government adherence to announced commitments.

But what if the message to regulated industries is, squawk loudly and government will wilt? Vacillation on aviation could undermine confidence in the most powerful climate policy instrument the EU has ever deployed, the world’s best hope for building, from the bottom up, an effective global climate framework.

The aviation sector can learn, as other EU sectors have, to survive and thrive with carbon constraints. It’s time for the EU to stay on course for brighter skies.

–This commentary was originally published Friday, Oct. 7, 2011, in Carbon Market Europe (A Thomson Reuters Point Carbon publication)

 

Learn more about EDF’s work on aviation and the EU Aviation Directive at edf.org/aviation.

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