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House Seeks to Forbid US Airlines from Participating in EU’s Cap & Trade System

The US House of Representatives recently passed a bill making it illegal for US airlines to participate in Europe’s emission trading scheme, which by January 1st all air carriers flying into or out of the EU will be legally required to do under EU law, as reported in a recent NY Times Green Blog.  The EU’s cap and trade system charges all companies operating within the EU for carbon dioxide emissions beyond an allotted amount.  US airlines, with the support of the Obama Administration, have sought exemption from the scheme, arguing that since most of carbon dioxide emissions are released over international airspace the EU does not have authority to impose carbon fines.  The European Commission, however, has stuck to its guns in requiring all airlines to participate, and the European Court of Justice recently ruled against airlines which had filed suit, noting that it’s already common practice for countries to impose landing fees that airlines must comply with.

The EU emissions scheme is estimated to increase the price of a transatlantic flight by up to $60, but the exact amount is unclear as it will depend on how much a particular air carrier exceeds the cap.  The hope is that US airlines will respond by finding mechanisms to reduce their fuel use (and thus emitting fewer GHGs), such as purchasing fuel efficient aircraft to replace aging fleets, resulting in a net savings to consumers over time.

Connie Hedegaard, the EU’s commissioner for climate action, tweeted, “We are confident that the U.S. will respect European law, as E.U. always respects U.S. law.”  But the recent House bill, titled the European Union Emissions Trading Scheme Prohibition Act of 2011, flies in the face of that sentiment.  Were it to be signed into law, it would require the Secretary of Transportation to prohibit any US airline from participating “in any emissions trading scheme unilaterally established by the European Union.”  How this would practically play out is profoundly unclear: US airlines would be placed in the untenable position of being forced to violate one law or the other. However, although the bill passed by a voice vote in the House, its chances in the Senate and the possibility of a Presidential signature are slim, relegating such musings to realm of bizarre speculation.

Brendon Steele

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