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Asian Airlines Renew Attack On EU Carbon Scheme

by Mary Swire, Tax-News.com, Hong Kong

16 June 2011


The Association of Asia Pacific Airlines has said that the European Union is overreaching its authority with its planned inclusion of international airline emissions within the EU Emissions Trading Scheme (EU ETS), scheduled for inclusion from 2012.

In a statement on June 10, AAPA noted that: "The scheme has provoked strong objections from international airlines and foreign governments. In the eyes of many foreign governments, the EU, in taking such unilateral action, is overreaching its authority and jurisdiction, in contravention of international treaties and bilateral aviation agreements."

Such arguments form the basis of ongoing legal challenges, including a test case being brought by a number of US carriers due to be heard by the European Court of Justice on July 5, 2011, which is being closely monitored by all concerned. Meanwhile, some foreign governments are considering retaliatory trade measures, targeting European interests.

Andrew Herdman, AAPA Director General, commented:

“As an industry, we are committed to ambitious environmental goals. We also believe there is a role for economic measures, including carbon markets. However, in order to be effective in mitigating emissions from international aviation, such measures need to be globally-coordinated, by governments working together, preferably on a multilateral basis through the International Civil Aviation Organisation.”

“The last thing [the aviation industry needs] is a trade war. Tit-for-tat measures would only add to the burden on the airline industry and the travelling public, without achieving any environmental benefit.”

"The EU has responded to foreign criticism of their self-appointed role as the world’s tax collector-in-chief by offering to consider partial exemptions from the EU ETS if other governments introduce ‘equivalent measures’."

"However, there has been no indication as to how such equivalence might be determined, or indeed the processes involved. In any case, there is a danger that the potential proliferation of a variety of national measures would only add further complexity, without being environmentally effective.”

Herdman concluded:

“The EU has over-reached and underestimated the political price it will have to pay if it insists on pressing ahead with this scheme in its current form. It needs to fundamentally rethink its whole approach. Simply put, the EU should modify its plans for the EU ETS by limiting its application to only cover flights within Europe. This might at least mollify international opinion and hopefully avoid the inevitable damage which would result from continued legal challenges and retaliatory trade measures.”

TAGS: environment | tax | business | law | aviation | World Trade Organisation (WTO) | agreements | trade disputes | carbon tax | trade

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