Category Archives: News

I want to tell you what happened over the weekend while no one was looking.

The U.S. Senate passed a bill early Saturday that gives the Administration unheard-of authority to ban U.S. companies from complying with another country’s law. (Photo credit: Flickr user WallyG)

At a few minutes before 2 a.m. on Saturday, just after the U.S. Senate wrapped up its wrangling over the latest funding resolution, a rather extraordinary bill was passed by the Senate.

If the bill is enacted, it would appear to be the first time in our nation's history that Congress has given sweeping authority to a cabinet member to prohibit U.S. companies from complying with the duly enacted law of another nation – and on top of that, to bail out firms that do comply or that get hit with penalties if they don't.

There are only a very few instances in America's recent history in which Congress has prohibited U.S. companies from complying with the laws of other nations. The purpose of those laws is to prevent U.S. firms from being used to implement policies of other nations that run counter to U.S. policy; they include the prohibitions on doing business in South Africa during the period of apartheid, and the anti-boycott laws, which prohibit U.S. firms from furthering boycotts of one country by another, and nowadays cover the Arab League boycott of Israel.

So, what action by a foreign nation was so odious that the Senate found it necessary to give a Cabinet secretary authority to prohibit U.S. firms from complying with it – and to bail U.S. firms out of any costs they might incur from it?

The bill that got through the Senate Saturday morning gives the Secretary of Transportation authority to prohibit U.S. airlines from complying with a European law requiring airplanes that land or take off from European airports to account for and limit their flights’ global warming pollution through an emissions trading system.

The bill also requires the Secretary of Transportation to hold the airlines "harmless" – meaning bail them out – of any costs, including both the costs of complying with the European law, estimated to be trivial, and the costs of not complying (the latter could be steep).

Aviation is already the world's seventh largest polluter, and if emissions from the industry are left unregulated, they're expected to quadruple by 2050.

With the passage of the Senate bill, the spotlight now zooms onto the Administration, in particular the Secretary of Transportation, and the talks at the International Civil Aviation Organization (ICAO) to reach a global agreement to limit aviation emissions — and to reach it quickly. 

Below are some questions we have received on this bill, and my responses.

What is it in the European law that runs so counter to U.S. policy that it justifies this drastic action?

The airlines argue that the law violates U.S. sovereignty because the law holds airlines accountable for the entire pollution of the flights – even pollution occurring in the airspace over the sovereign territory of the United States.

But the fact that the European law applies to the entirety of the flight cannot be the reason it is counter to U.S. policy.

In fact, it's expressly the policy of the United States to apply our laws to a whole host of issues through the entirety of flights coming in and out of the U.S. – including portions of flights wholly over foreign sovereign territory.  U.S. laws governing everything from security screening, to banning liquids and gels, to barring gambling apply to flights landing and taking off from U.S. airports, including the portions of the flights occurring in and over foreign lands.

Could the reason the European law is so counter to U.S. policy be that, as the U.S. airlines allege, it's a tax?

The law does require flights landing or taking off from European airports to hold sufficient pollution allowances to cover the amount of pollution coming out of the backs of their engines, and if they don't have enough allowances, they can buy them from European governments.

But it can't be that flight taxes per se are objectionable to the U.S. government. After all, Congress makes every traveler coming in and out of the United States pay a $16.70 international departure and arrival tax.

The aviation industry is world's seventh largest polluter. With the passage of the Senate bill, the spotlight now zooms onto the Administration, in particular the Secretary of Transportation, and the talks at the International Civil Aviation Organization (ICAO) to reach a global agreement to limit aviation emissions– and to reach it quickly.

And as courts have already found, the EU law isn't actually a tax:  if the airlines don't want to, they don't have to send a cent to European government coffers. They can simply fly more efficiently.  And if they don't want to do that, they can buy and sell pollution credits in the global marketplace without ever paying European governments a dime – and maybe even make money in the process.

In the run-up to the passage of the airline pollution bailout bill, a few changes were made that tell the Secretary of Transportation, if he does ban the airlines from complying with the European law, to reconsider his ban if the Europeans amend their law, or if an international agreement is reached to address this pollution, or if the U.S. adopts a regulation (which could take years).

The international agreement provision is the interesting part – it puts pressure on the International Civil Aviation Organization (ICAO) to amp up its action on climate change and agree on a global program at its next triennial Assembly in 2013.

But other parts of the bill – including those that bail the airlines out of any costs of complying – or not complying – with the law, remain.

Minor changes to the bill ensure that those costs won't be paid out of the airlines' taxpayer-funded trust fund, but taxpayers could still be on the hook if the airlines win a court judgment that the Secretary is required to hold them harmless, as the bill requires, so that the monies come from the taxpayer-funded Judgment Fund, a part of the U.S. Treasury used to satisfy court judgments against the United States.

What if the Secretary invokes his authority under a little-known airline competitiveness law that allows him to impose retaliatory penalties against airlines from countries that the Secretary finds are treating U.S. airlines “unreasonably”?

And what if the Secretary uses that authority to hold U.S. airlines harmless from the European law by dunning Lufthansa, British Airways, and other European airlines for the U.S. airlines’ compliance or non-compliance costs?

Those companies would likely protest in court. But if the Secretary's cost-dunning order were upheld, Europe could retaliate under its own airline competitiveness law and impose retaliatory fees on U.S. airlines.

Then you have a full-scale trade war. And since U.S. airlines have both code-share and revenue-share agreements with European carriers, a trade war on this issue amounts to shooting themselves in the wing.

What happens next?

A similar bill has already passed the House of Representatives, but because the bills have some differences, the House will have to take it up again when Congress reconvenes after the November elections.

Could it be that the part of the bill that's antithetical to U.S. policy is really the fact that the  European law addresses climate change?

Maybe that's the case for the U.S. Congress at this sad juncture in our nation's history.

But is it also the case that the Obama Administration is so opposed to climate action that after 15 years of fruitless international efforts to curb aviation's global warming pollution, the Administration would stand in the way of other nations' efforts to address that pollution?

We don’t believe so. And if the bill passes, we and others will certainly be encouraging the Administration to find that it is in our public interest lies in striking a real deal in ICAO, rather than turning U.S. airlines into scofflaws at taxpayer – or the flying public’s – expense.

Leading U.S. environmental groups today sent a letter to President Obama urging him to resist the aviation industry’s calls to block a European law that limits pollution from aviation.

Environmental groups called on President Obama today to lead a global effort to "craft a meaningful global approach on aviation carbon pollution."  (White House photo credit: Flickr user LollyKnit)

The European law is the only program in the world that sets enforceable limits on carbon emissions from aviation; that pollution is growing so quickly, it's projected to quadruple from 2005 levels by 2050 if left unregulated.

But the aviation industry has been calling for the U.S. government to block the law by bringing a so-called “Article 84” international legal case in the International Civil Aviation Organization (ICAO).

The letter, signed by 15 environmental groups and the U.S. Climate Action Network, which represents more than 80 U.S. environmental groups and millions of members, said filing such a formal proceeding to block the law

would be highly inconsistent with your Administration’s efforts to reduce carbon pollution from other sources, and would undermine your Administration’s stated goal of achieving an agreed framework in ICAO to limit global warming pollution from international aviation …

[C]alls for such a proceeding must be viewed for what they truly are: not an effort to improve ICAO’s odds of achieving a global solution, but rather a means of reducing the likelihood that ICAO takes meaningful action on carbon pollution from international aviation – while simultaneously obviating the world’s only program that is now actually doing so. In short, an Article 84 proceeding is at base a transparent effort to allow airlines to evade responsibility for their carbon pollution in perpetuity …

[Y]our Administration should lead the effort in ICAO to craft a meaningful global approach on aviation carbon pollution, working together with airlines and civil society.

CEOs from the following groups signed the letter: 350.org; Center for Biological Diversity; Climate Protection Campaign; Climate Solutions; Earthjustice; Environmental Defense Fund; Environment America; Environment Northeast; Greenpeace USA; Interfaith Power & Light; League of Conservation Voters; Natural Resources Defense Council; Oxfam America; Sierra Club; US Climate Action Network; and World Wildlife Fund US.

View the letter from environmental groups to the president.

The U.S. Senate Commerce Committee today passed a bill that would allow the secretary of transportation  to ban airlines from complying with the only program in the world that sets enforceable limits on carbon pollution from aviation.

The U.S. Senate Commerce Committee voted in favor of a bill that would allow the transportation secretary to block airlines from complying with Europe's anti-pollution law for aviation.

The Senate bill (S.1956) would give the transportation secretary the authority to prohibit airlines from participating in the EU Emissions Trading System, if, after taking into account many different considerations, he determines that it is in the public interest to do so. Unlike the bill passed last year in the House of Representatives, this bill does not automatically prohibit U.S. airlines from participating in the EU system.

Countries, including the United States, along with airlines and environmental groups all agree aviation emissions should be addressed at the international level, through the International Civil Aviation Organization (ICAO).

However, countries have spent a decade and a half at the UN agency discussing — and failing to agree on — a program to cut carbon pollution.

EDF's International Counsel Annie Petsonk said in a statement after the vote today this Senate bill doesn't get the United States any closer to such a solution, and urged the Obama administration to step up its pressure on ICAO.

Passage of this disappointing and short-sighted bill today seems only to decrease the odds of action at the international level by calling into question the status of the one lever that actually moved ICAO to have serious discussions after 15 years of inaction – the EU Emissions Trading System.

This bill now ups the pressure on the Obama administration to produce a solution at ICAO. We are happy to see the text at least encouraged international negotiations at ICAO, which we believe hold the key to a global agreement to reduce aviation emissions.

Petsonk also said that only a couple times in history has U.S. legislation blocked companies from obeying another country's law.

Legislation that blocks American companies from obeying the laws of the countries in which they do business is almost unprecedented in U.S. history, showing up most recently when Congress barred American firms from suborning apartheid in South Africa.

How disconcerting that airlines, which are spending significant funds touting their environmental friendliness, are acting as though an anti-pollution law is as grievous as a massive human rights violation.

Amendment

An amendment to the bill says the secretary of transportation, the Federal Aviation Administration (FAA) administrator and other government officials:

should, as appropriate, use their authority to conduct international negotiations, including using their authority to conduct international negotiations to pursue a worldwide approach to address aircraft emissions;

Expressing skepticism of that "authority to conduct international negotiations to pursue a worldwide approach to address aircraft emissions," Petsonk told Reuters:

We've been in hot pursuit of this (an ICAO framework) for 15 years, so what makes the Senate think this is any different?

Up next, the bill's proponents will seek its quick passage on the Senate floor, either as a stand-alone bill or as an amendment to other legislation. Whether they succeed remains to be seen.

See also: Annie Petsonk's blog, Will Washington meeting on aviation pollution be undermined by U.S. airlines?

UPDATE | 9 p.m.

The U.S. State Department has released a transcript of a news conference held today during which a senior administration official says the starting point for this week's talks will be the International Civil Aviation Organization's (ICAO) 2010 resolution. In that resolution, countries set an “aspirational goal” of improving efficiency 2 percent per year through 2020, and then offsetting emissions above 2020 levels starting in 2021 (that’s what their phrase “carbon neutral growth” from 2020 means).

Above: the emissions-reductions proposal of the International Air Transport Association (green), and business-as-usual emissions (red).

We think that’s a reasonable place to start, as long as the talks move forward, not backtrack.  The 2010 ICAO resolution itself recognizes the proposal is not enough. It says:

the aspirational goal of 2 per cent annual fuel efficiency improvement is unlikely to deliver the level of reduction necessary to stabilize and then reduce aviation’s absolute emissions contribution to climate change, and that goals of more ambition will need to be considered to deliver a sustainable path for aviation.

The industry’s proposal – the green line to the right – is weaker than the ICAO resolution, and allows emissions to continue to grow.

The yardstick we’ll be using to measure any progress in the meeting over the next two days is: are countries speaking in terms of reducing aviation’s total emissions, with binding targets?

Or are the talks backtracking to the industry’s lowest common denominator?

BEGIN ORIGINAL POST

U.S. climate envoy Todd Stern will be in the hot seat tomorrow — in more ways than one.

U.S. Special Envoy for Climate Envoy Todd Stern is hosting a meeting in Washington of 17 countries to discuss emissions from international aviation.

Airlines are the world's seventh largest planetary polluter.

Everyone from the aviation industry to governments to environmental groups says that the best way to deal with pollution from airplanes is through the Montreal-based International Civil Aviation Organization, or ICAO. (It’s pronounced "eye-kay-oh" or "ih-cow" … you say tomayto, I say tomahto…)

ICAO was tasked by world governments way back in 1997 to come up with a solution to this problem. Unfortunately, they’ve been dithering about it since your teenager was a toddler.

Meanwhile, in 2003, Europe suffered a climate catastrophe — a massive heat wave that killed more than 40,000 people.

Europe got serious about climate security after the 2003 heat wave. It enacted a law putting most of its industry under emissions caps.

Aviation basically got a ten-year grace period from that cap. But this year, for the first time, all planes landing or taking off from European airports will have to reduce their climate pollution. Those that don’t comply will face tough sanctions.

The law is causing a lot of complaining from the U.S.-based airlines, including United, American, and Delta.

To hear them squawk, you'd think Europe's aviation law meant “The End Is Nigh.”

But let's take a deep breath here.

The EU law only requires airlines to cut their pollution by 5 percent.

Economists commissioned by the U.S. Federal Aviation Administration to assess the impact on U.S. airlines found that the EU law might … I repeat, might … cost as much as $6 on a roundtrip ticket from the U.S. to Europe.

That's the same as the cost of a beer on a Delta or United flight.

Oh, and the economists said "might" because they found that — if the airlines met the EU law by flying more efficiently — they could actually make money from it.

So why is this so controversial?

Because … while Stern's meeting is aimed at coming up with new ideas for how ICAO can move forward, and while the EU's law is actually nudging ICAO in that direction … the U.S. airlines have other ideas.

Aviation is the world's seventh largest polluter , but U.S. airlines are still trying to get out of complying with Europe's anti-pollution law. (Sources:  International Civil Aviation Organization, International Energy Agency, United Nations Environment Programme)

United, American, Delta and their trade association are pressing to have the meeting focus on how to bring legal action against the EU, rather than focus on ways to make progress in ICAO. Specifically, they’re pushing for agreement to bring legal action under Article 84 of ICAO's governing treaty.

Never mind that the airlines don't have much of a wing to fly on for legal action. (They already brought and lost such a case in European courts.)

Never mind that Article 84 cases are cumbersome, time-consuming procedures that drag on for years and almost never reach a conclusion.

The airlines' real game is to tie ICAO up so deeply in the ponderous Article 84 process that it will never have time to work on a serious agreement on climate change.

The airlines are also lobbying hard for Congress to pass legislation barring U.S. airlines from obeying the EU's law.

Legislation like that is almost unprecedented in U.S. history. Last time we saw legislation blocking American companies from obeying the laws of the countries in which they do business was when Congress barred American firms from suborning apartheid in South Africa.

So the airlines are acting as if a $6 ticket surcharge is the equivalent of a massive human rights violation. (Just keep in mind airlines generally charge several times that much for a checked bag.)

That's what makes Stern's meeting this week so hot.

Washington didn't even invite any European countries to the table. Maybe it's because the airlines fear that with Europeans in the room, countries might actually start talking seriously about how to reach an agreement in ICAO that's as effective in cutting pollution as the EU law. (The EU has already said it will waive its law when — or if — ICAO does reach such an agreement.)

We're hoping the talks will illuminate some new paths forward. But against the backdrop of all the wacky weather Washington's had lately, the last thing we need here right now is “more heat than light.”

updated June 6  |  By Adam Peltz, Legal Fellow, and Annie Petsonk, International Counsel

Europe’s Aviation Directive is a pioneering law that holds airlines accountable for the global warming pollution of all flights that land at or take off from European Union (EU) airports. The EU aviation law would, by 2020, cut carbon pollution by an amount equivalent to taking 30 million cars off the road each year.

However, industry players have fought the law’s implementation. They’ve objected to the EU Emissions Trading System (EU ETS) applying to international aviation outside of European airspace.

To argue that a nation's authority to address the emissions of a flight landing in or taking off from its airports extends only to its sovereign airspace ignores the fact that the flight only occurs because travelers wish to fly to or from that country. If the flight never took off to go to that country, then none of the emissions would occur. But all the emissions from the flight occur precisely because the flight is going to that country.

Further, the airspace-based methodology for accounting for aviation emissions was rejected by the UN Framework Convention on Climate Change (UNFCCC) years ago, a decision effectively ratified by the International Civil Aviation Organization (ICAO) Executive Committee when it directed that ICAO’s work be consistent with the UNFCCC.

The airspace approach was rejected because it would lead to perverse results. For one, the emissions of a flight would "belong" to a nation simply because the plane had transited that nation's airspace, even though the flight had never landed in the country. Also, pollution from flights occurring in airspace over the high seas would be "orphan emissions," the responsibility of no country.

But all of that aside, the sovereignty complaint does not ring true. Many countries charge some sort of arrival or departure tax (or both, like in the U.S.) on flights to and from their territories. Those charges apply to the entire flight, not just the portion in the country’s sovereign airspace. In fact, many of these charges – including those of the UK, Germany and India – are proportional to the length of the flight (including flight length outside the territory of the country taking the measure), in much the same way that the EU ETS accounts for emissions proportional to the length of the flight.

Here are some countries that levy charges beyond their sovereign airspace:

These taxes affect the entire length of an international flight, both inside and outside of the country’s sovereign airspace: if you don’t pay the U.S. international arrival tax of $16.70, you simply can’t take off from a foreign airport to come to the U.S.

From a practical standpoint, the estimated per-ticket cost of compliance with the EU ETS of less than $3 for a flight from New York to London is substantially less than the arrival and departure fees shown above, in some cases by an order of magnitude or more. As we’ve discussed, the cost of EU ETS compliance is trivial compared to the cost of an international plane ticket and airlines potentially can profit.

Stakeholders concerned about sovereignty issues should take note: taxes and fees that apply to the portions of flights outside a nation’s sovereign airspace are common practice among governments (and most of those taxes and fees – including taxes imposed by the United States on travelers outside the U.S. – are substantially higher than best estimates for the cost of EU ETS compliance.)

The EU ETS, a modest measure that uses proven policy tools for cutting emissions at least cost, is no more an intrusion into U.S. sovereignty than these taxes are into other nations’ sovereignty.

Chart Sources:

Australian Customs and Border Protection Service

Cabinet of Germany

India Airports Economic Regulatory Authority

UK Revenue & Customs

US Federal Aviation Administration