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EU blinks over aviation carbon conflict

Brussels blinks over imposing a carbon emissions fee on foreign airlines against the united opposition of China and America

An A380 in final assembly at Toulouse: Airbus image

The news that the European Union has suspended the imposition of emission trading scheme charges on non-EU carriers flying to its airports is being reported very selectively, although accurately, in stories like this one.

The real story is that China has stopped buying larger Airbus airliners until the unilateral action taken by Brussels is dropped.

In a contagion of amnesia, the European media appears to have forgotten that in May Airbus officials told aviation writers in Toulouse that what is now the world’s largest aircraft maker would not open a second assembly line for its A330 jets until the carbon emission scheme dispute with China was ‘resolved.’

The EU’s attempts to impose its rules on non-EU carriers has also put it in strong dispute with the US, however it is China that is believed to be sitting on a large number of orders for the A330 family, the A350 family that will take over from it during this decade, and the A380.

This isn’t the case in America, where government has no role in centralised aircraft ordering policy.

Of course phrasing the decision to suspend the tax that the EU levies on foreign carriers under its ETS in such base terms as the loss of tens of billions of dollars in Airbus orders would have been tactless, but truthful.

Nor is it clear at this early stage if Beijing will allow all those orders to go ahead for a ‘suspension’ that in practical terms would extend not to the last quarter of next year, but to 1 April 2014, when it wants a ‘cancellation’.

Airbus must be hoping so, since while Beijing has shut down big Airbus orders, there hasn’t been any concurrent surge in Boeing orders.  Although that could change in a flash.

As the Reuters story does make very clear, the EU is backing off to allow a determined effort to reach a global agreement on how emissions trading or carbon tax schemes will be applied to airlines.  China has also made it very clear it isn’t opposed to a universally applied scheme that would reward or encourage airlines and aerospace enterprises for measures that reduce the use of fossil-carbon releasing fuel.

The issue comes down to unacceptable arrogance and chauvinism in Brussel, which proved so distasteful that it caused Beijing and Washington DC to actually agree on a trade issue on the grounds of Europe’s contemptible treatment of their respective sovereignty.

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  • 1
    LongTimeObserver
    Posted November 13, 2012 at 11:39 am | Permalink

    Like the aircraft noise issue of the 1980s/90s, the emissions issue is appropriately addressed globally via ICAO Chapter resolution.

  • 2
    Posted November 13, 2012 at 12:43 pm | Permalink

    The EU’s behaviour in practice wasn’t wise, precisely because China always had the ability to retaliate in the way that it has done. An ICAO resolution would be a better result.

    Still, it seems a bit overblown to call it “contemptible treatment of their respective sovereignty”.

    The program would have applied solely to airlines that were seeking to fly to the EU, and solely to their flights to the EU.

    That isn’t intervening in anyone else’s sovereignty, any more than EU and US bans on carriers with poor safety records from entering their airspace are.

  • 3
    StickShaker
    Posted November 13, 2012 at 6:51 pm | Permalink

    Sovereignty is what this dispute was all about. For the EU to attempt to impose taxes upon carriers using air space outside its borders was the height of arrogance.
    The EU are perfectly entitled to apply taxes as they see fit within their own borders but doing so within international air space requires international co-operation and agreement – not unilateral action on the part of one player who wanted to occupy the high moral ground.

    Given the appalling economic state of most EU countries, it was also somewhat foolish – picking a fight with powerful nations whose trade they desperately depend upon to lift themselves out of their fiscal quagmire.

  • 4
    icarus
    Posted November 14, 2012 at 2:05 pm | Permalink

    A global climate change agreement including the US will never happen. US money isn’t interested in anthropogenic Climate Change, but strings the world along with promises and people like you swallow that crap. This of course gives China the perfect reason to be recalcitrant in that matter.
    Alas, that attitude boils down to “fiddling while world burns!”
    That reminds me of another promise the Yanks made when they forced the predominantly metric world to fly in medieval feet after 1945. In the preamble to the ICAO rules they state the aim is to metricate all aviation measurements. Well they had almost 67 years and the metric world is still waiting.
    Here is the official US reason why the world still has to fly in feet:
    ICAO annex 3: The foot will be retained until such time as an SI-based unit can be developed which is superior to both the foot and the metre. One of the lousiest jokes I ever heard.

  • 5
    Posted November 14, 2012 at 3:04 pm | Permalink

    StickShaker: what are you talking about? This was about flights into and out of the EU. Digressionally, the fiscal point is massively overblown (as an entity, the EU is fiscally sound; the only reason it appears otherwise is because the mechanism for internal transfers is painful and balances are reported state-by-state. Within the US and within Australia, that process also exists – California to West Virginia is at least as diverse as Germany to Greece – but is invisible to outsiders).

    Icarus: much of the reason why the foot is kept is because of the utter carnage (in both metaphorical and literal senses) that would be associated with a transition to metres. Do you force everyone worldwide to metricate their altimeters on the same hour of the same day? If not, you will inevitably have the problem that someone with an imperial altimeter will be following ATC using metric, or vice versa…

  • 6
    StickShaker
    Posted November 14, 2012 at 5:43 pm | Permalink

    Johnb78: The EU intended to tax the entire portion of all flights terminating in the EU including the portion of flight in international air space together with that over the originating jurisdiction.
    A flight from New York to London would be taxed for the entire length of the flight despite spending little more than an hour in EU airspace.
    This was the formulae the EU boffins thought was most practical – they obviously didn’t think about sovereignty issues.

  • 7
    icarus
    Posted November 14, 2012 at 9:38 pm | Permalink

    Re:Johnb 78

    In the end that doesn’t depend on America, or the Europeans, but on China. Like Russia and some of its former allies China never used feet. Every Airline using and landing in their airspace has to do so in metres. As to the carnage you envisage, put it this way, 96 % of people on this globe think and live metric, which means that the overwhelming majority of pilots and ground personnel are able to handle the changeover over pretty well. Americans on the other hand never managed to switch to metric, as their repeated and miserable efforts since 1866 show. This is why they forced most of the world to regress to their archaic feet. Well it is about time they get some of their own medicine. So let’s turn the table, the sooner the better.

  • 8
    icarus
    Posted November 14, 2012 at 9:43 pm | Permalink

    Re:-StickShaker
    I never knew that green house gases stay within the emitting countries borders???????

  • 9
    StickShaker
    Posted November 14, 2012 at 11:34 pm | Permalink

    Thats an astute observation there icarus – no doubt they dont. I think the issue here is that not all countries see taxation as the solution to emissions and no doubt others dont even see emissions as a problem – not trying to defend that position but merely highlighting the massive divergence of opinion in the international arena.

    The massive improvements in the efficiency in turbine engines and aircraft design over the last 40 years have been largely driven by the escalation of oil prices from $30/barrel to in excess of $100/barrel rather than by any form of taxation. I don’t see Pratt & Witney, GE or Rolls Royce increasing their budgets for R&D just because the EU imposes a tax on aviation, the engine manufaturers are pushing the boundaries as it is.

  • 10
    Posted November 15, 2012 at 2:55 am | Permalink

    Stickshaker: if I’m Country X, I have an absolute right to refuse you entry to my territory (aside from diplomats, refugees, etc). If I say you can only come into my territory if you pay me an amount of money based on some arbitrary criterion I’ve made up, then that’s absolutely my business and is absolutely not an erosion of your sovereignty. It might be a bad strategic idea, to the extent that it pisses you off/deters you from visiting at all/encourages you to retaliate, but the suggestion that it has anything at all to do with your sovereignty isn’t true. Sovereignty *means* that Country X has the right to be as stupid as it likes in how it deals with people entering it, and that you have the right to do the same to people from Country X.

    Icarus: what the vast majority of people use in general life is completely irrelevant, because there’s no correlation at all between “how tall am I” and “how have I been trained to fly this plane?”. In that context, FL is best viewed as an arbitrary unit for pilots and ATC, which has no relation to anything in the real world, and which there’s no reason to change and a fair amount of risk in changing.

  • 11
    StickShaker
    Posted November 15, 2012 at 2:54 pm | Permalink

    johnb78: You have essentially described the ingredients of a trade war. If your arbitary criterion is assessed upon what others do in their own country or within international jurisdiction then you have a problem. If your country X depends upon international trade for its wellbeing it would rapidly find itself very isolated and the subject of retaliatory action by trading partners.
    When EU found itself up against the whole world if finally dawned on them that it might not be a good idea.

  • 12
    Posted November 15, 2012 at 6:20 pm | Permalink

    Stickshaker: yes, I agree wholeheartedly. It’s the incorrect use of “sovereignty” as opposed to “doing something which isn’t in your interests because it annoys people whose goodwill you depend on” that I was objecting to.

  • 13
    StickShaker
    Posted November 15, 2012 at 7:58 pm | Permalink

    johnb78: I agree the term sovereignty is much abused, misused and subject to perception. However, if the EU had used more care they may have come up with a formulae that didn’t get under everyone else’s skin. And yes, this irritating need to get along and co-operate in a global environment can somewhat blunt your intentions.

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