Emissions Trading Scheme

The European Union has implemented a "Cap & Trade" policy for controlling air pollution by providing economic incentives to company's to curb emission output. In what the EU hopes will reduce the ozone depleting emissions from the atmosphere. It's new name is the "Emissions Trade System" formerly known as the "Emission Trade Scheme". The plan is to charge company's for their emissions allowance according to calculated estimates about how much pollution they will emit in a year's time. At the end of the year, company's will have to surrender what ever amount of pollution credits it has used, or pay heavy fines. If the company has done a good job of controlling its emission output and has extra credits left over it can save them for future use or sell them off. This is a fund raising effort which puts a dollar amount on pollution where the collected funds can be earmarked for research into alternative energy and low carbon technologies etc.

The effect on US operators who conduct international flights to the EU if made to comply with the ETS, some say will only increase emission by US carriers who will add another stop to a flight at a non-participating country. This will add to the overall length of a trip, increasing emission output while saving emission credits needed to conduct business in EU airspace. This will effect the financial health of US operators in that they will be spending on licenses that were not required before this law was enacted. The long term answer to how the cost of participation in ETS will impact each operator is unknown, however it is likely safe to say that the customer or passengers will see increased fares as a result.

The issues that the United States have about the EU's ETS are that the EU is overstepping its authority by imposing emission license fee's to air carriers while operating in international airspace or any airspace that the EU does not have jurisdiction over. Also that fee's that are collected by the EU for flights in airspace in which they they have no right to charge goes straight to the EU and not the controlling country. Other action the US has taken can be reviewed in house bill H.R. 2594 which prohibits US carriers from participating in EU's ETS. When the EU begins to include airlines in its ETS this bill would force us carriers to suspend operations to the EU.

Who is effected? The EU ETS will cover any aircraft operator, whether EU- or foreign-based, operating international flights on routes to, from or between EU airports. All airlines will thus be treated equally. Very light aircraft will not be covered. Military, police, customs and rescue flights, flights on state and government business, and training or testing flights will also be exempted.

My hat is off to Europe for spear heading action aimed at reducing ozone depleting pollution. However it seems they have missed the mark on where their authority lies. My surprise over EU's intentions is that it has overlooked the impact on how it will effect their relationship with the US and other countries that fly into Europe. To force foreign countries into participating in a plan that they had no say in, is a bit presumptuous at least.

The US and other countries that are opposed to this plan should recognize that a similar plan should be put into action in their own countries when attempting to remove themselves from the EU's ETS if they think that the EU is going to give in to some sort of compromise. Unfortunately this move will cost Americans in the long run. Reading articles about how the cost of living will increase for Australians, after they published estimates it seems that the average income family will be paying roughly $1100.00 a year more to cover their ETS costs. Thinking back about what America has done about environmental pollution brings to mind the Clean Air Act which is reguarded as being the most successful domestic environmental legislation ever enacted. 

In this article the author writes about how the plan has failed to curb emissions at all. The EU ETS is a concrete example on how the use of market-based solutions to address climate change is delaying real change towards a carbon-free future while allowing business as usual to continue.