EU to include airlines in emissions trading

[chooms]

http://www.smh.com.au/news/world/eu-to-include-airlines-in-emissions-trading/2008/07/09/1215282892249.html

EU to include airlines in emissions trading

July 9, 2008 - 12:51PM

Air travel is a major contributor to greenhouse gas pollution.
Photo: James Alcock



The European Parliament today approved a proposal to include airlines in the bloc's strategy to cut carbon dioxide emissions - a move that could raise the cost of air travel and provoke a dispute with the United States.
Under the plan, all flights starting or landing in the EU, including intercontinental flights, will be included in the EU's emission trading system from 2012.

Pollution permits granted to airlines initially would be capped at 97 per cent of their average emissions for 2004-2006. From 2013, the cap would drop to 95 per cent. Eighty-five per cent of those emission certificates will be allocated for free, while the rest will be auctioned. Airlines that want to fly - and pollute - more will buy more permits.

The United States believes the Europeans have no right to force airlines using European air space to participate in their emissions caps program and prefers a voluntary agreement among nations.

US officials say the EU will likely break international aviation rules if it insists on including non-European airlines in the program - even though the EU says it is certain its system would be legal.

The EU wants to use the new rules as a base to reach a broad international agreement to reduce emissions from aviation.

"We are taking a leadership role and we are making it clear that we are open to dialogue with our partners with a common goal of getting an international agreement," said EU Environment Commissioner Stavros Dimas.

However, the legislator who drew up the compromise text accused the administration of US President George W Bush of not taking global warming seriously and said the EU would have to wait until after the US elections before seeing progress toward an international deal.

"We want an international agreement, but being realistic we're only going to get that when John McCain or Barack Obama are in the White House," German Christian Democrat Peter Liese told the assembly.

The parliament voted 640 to 30 in favour of the proposal, with 20 abstentions. Following the vote, the plan is expected to be formally approved soon by EU governments.

A group representing 38 mostly charter airlines criticised the deal.

"Today's vote creates the worst of all worlds - even more financial pressure on airlines without any proven benefits for the environment," said Sylviane Lust, director general of the International Air Carrier Association.
"It will be crippling for many airlines especially in today's era of high fuel price and weakening demand."


In a statement, Lust said the new rules would force airlines to divert investment away from new planes and technology.

Small airline companies producing low emissions will be excluded from the program, including those from poorer nations flying into the EU, said Nathalie Kosciusko-Morizet, France's secretary of state of ecology, who spoke in the parliament on behalf of EU governments.

Revenues generated by the auctioning will be used to finance the fight against climate change, research into clean aircraft and other environment-friendly policies.

The EU's carbon emissions trading program was introduced in 2005 and so far applies only to major manufacturing industries like steel as well as to power plants.

For airlines, the emissions trading would set a limit on how much carbon dioxide they can release, allowing them to sell surplus permits if they fly less or use greener technology and punishing them with extra costs if they want to use more fuel. Each permit would be good for one tonne of carbon dioxide per year.

Faced with higher fuel costs, some airlines are already cutting fuel consumption and carbon. They say tighter limits will burden them with extra costs of 4 billion euro ($A6.59 billion) a year and wipe out potential future profits and growth.

The EU pledged in 2007 to cut its greenhouse gas emissions by at least 20 per cent below 1990 levels by 2020, but Dimas said emissions from aircraft have actually doubled since 1990 and would likely double again up to 2020 without action.
AP

 

[JohnK]

At what point does the constant increase in airfares actually cause a reduction in the number of people flying?

 

[dajop]

At what point does the constant increase in airfares actually cause a reduction in the number of people flying?

Isn't that the aim of the EU approach?

A roundabout way of getting the Ryanair/Easyjet riffraff out of continental europe.

 

[drron]

The economics of the whole carbon trading industry is full of contradictions.Surely the aim is to reduce emissions otherwise it is a complete joke.We have just seen in $A terms a doubling of the oil price over the last 12-18 months yet little evidence of reduced emissions.How high does a carbon tax have to be to have the desired effect?Why reduce the excise when introducing a carbon tax?
We are then told that now Australia is part of the climate change solution we can be involved in the lucrative carbon emission trading scene.But surely if emissions are successfully reduced then licences,permits and offset schemes are going to end up collapsing in price?
I read in the Sunday paper where some "expert"is predicting a 60 metre rise in sea level if all polar ice melts.Then went on to say 50% has already gone-sorry if he is right about sea level rises for the last 50% our place should be well under water from the melting of the first 50%.Yes the science is wondeful and the economics perfect.

 

[NM]

The only benefit I can see is if the revenue earned from a carbon tax is used to fund research and development activities to directly reduce carbon emissions. If the revenue is not used directly and completely for that purpose then its a waste of time. History shows that increasing the cost of a commodity dies not significantly reduce the demand of usage of that commodity.

 

[acampbel]

The only benefit I can see is if the revenue earned from a carbon tax is used to fund research and development activities to directly reduce carbon emissions. If the revenue is not used directly and completely for that purpose then its a waste of time. History shows that increasing the cost of a commodity dies not significantly reduce the demand of usage of that commodity.

Quite right - if the airlines nicely form a cartel (like the petrol companies and banks) and all raise their prices then the demand will reduce where there is discretionary use, but otherwise not very much.

But the trading scheme inserts financial benefits and penalties that will reward businesses that make additional efforts to reduce emissions, and possibly send to the wall those that don't. This will hopefully accelerate the move to more efficient use of resources and at the very least slow the rate of growth in greenhouse gases.

The science of the impact of GHG and subsequent global warming is inexact, but the science of the measurement of the same keeps telling us each year that it is worse than predicted. Let's not treat the earth as a scientific experiment unless we can cope with all possible outcomes.


Cheers,

Andrew

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