Are Moscow"s Claims Against Aviation Carbon Trading Valid?
The Russian Transportation Ministry late last month hosted a two-day meeting of countries opposed to the inclusion of the airline industry in the European Union Emissions Trading Scheme (EU ETS).
Representatives from 32 countries gathered in Moscow after the United Nations' International Civil Aviation Organization last year adopted a non-binding resolution that urging 26 member states, including India, China, Japan and Russia, to oppose the EU's unilateral enforcement of carbon trading rules against non-EU air carriers.
In an official statement emailed to Bloomberg, Russian ministry officials called for the urgent exemption of non-European carriers from the EU's compulsory carbon trading scheme and proposed that global rather than regional measures should be implemented to tackle emissions from the aviation industry.
Said Transportation Minister Igor Levitin: "Before coordinated actions by countries are worked out it is necessary to refrain from applying the directive to carriers from countries [which are] non-members of the EU.
" Opponents of global aviation's inclusion in the EU carbon trading scheme expressed concerns that the new rules, which will force airlines to pay for emissions above their allocated caps, may lead to an increase in airfares and are tantamount to an infringement on national sovereignty.
Compromised sovereignty, they claim, will come about because of the application of European environmental rules to the entire inflight emissions from flights into and out of European airports.
So even if a flight path is mostly over international waters or countries outside the region, the airline in question will still have to pay a 'European' price for cleaning its carbon contrail.
The meeting in Russia resulted in the "Moscow Joint Declaration" in which, noted the New York Times, the country-signatories declared their readiness to start a "trade war" which could lead to higher prices for tickets to Europe.
And the airlines themselves weighed in.
"We strongly support the outcome of the Moscow meeting where governments voiced their united opposition to the E.
U.
's unilateral tax, even spelling out the concrete steps they can take to overturn this scheme.
"So stated American Airlines to the New York Times on Wednesday.
While there is merit to some of the concerns expressed at the Moscow meeting, the claimed linkage between compliance carbon regulation and higher prices for plane tickets isn't one of them, and here's why.
First, at current carbon credit prices, it's estimated that airfares will increase by about 2 euros per passenger each way on a transatlantic or other long-haul flight.
This cost is a lot lower than the cost of most airport taxes and charges.
In addition, carbon regulations are not expected to contribute to net cost increases to airlines.
Secondly, if airlines manage to curb their emissions to levels below their EU-imposed emissions caps, they can take advantage of the unused free permits - to be issued in year one of their inclusion in the EU ETS - byselling them on the carbon market.
This will bring in valuable revenue for otherwise cash-strapped airlines.
In short, while inclusion in the EU ETS may represent some sort of sovereignty infringement, it's very unlikely that the measure will bring down an unbearable financial burden on air carriers or their customers.
Representatives from 32 countries gathered in Moscow after the United Nations' International Civil Aviation Organization last year adopted a non-binding resolution that urging 26 member states, including India, China, Japan and Russia, to oppose the EU's unilateral enforcement of carbon trading rules against non-EU air carriers.
In an official statement emailed to Bloomberg, Russian ministry officials called for the urgent exemption of non-European carriers from the EU's compulsory carbon trading scheme and proposed that global rather than regional measures should be implemented to tackle emissions from the aviation industry.
Said Transportation Minister Igor Levitin: "Before coordinated actions by countries are worked out it is necessary to refrain from applying the directive to carriers from countries [which are] non-members of the EU.
" Opponents of global aviation's inclusion in the EU carbon trading scheme expressed concerns that the new rules, which will force airlines to pay for emissions above their allocated caps, may lead to an increase in airfares and are tantamount to an infringement on national sovereignty.
Compromised sovereignty, they claim, will come about because of the application of European environmental rules to the entire inflight emissions from flights into and out of European airports.
So even if a flight path is mostly over international waters or countries outside the region, the airline in question will still have to pay a 'European' price for cleaning its carbon contrail.
The meeting in Russia resulted in the "Moscow Joint Declaration" in which, noted the New York Times, the country-signatories declared their readiness to start a "trade war" which could lead to higher prices for tickets to Europe.
And the airlines themselves weighed in.
"We strongly support the outcome of the Moscow meeting where governments voiced their united opposition to the E.
U.
's unilateral tax, even spelling out the concrete steps they can take to overturn this scheme.
"So stated American Airlines to the New York Times on Wednesday.
While there is merit to some of the concerns expressed at the Moscow meeting, the claimed linkage between compliance carbon regulation and higher prices for plane tickets isn't one of them, and here's why.
First, at current carbon credit prices, it's estimated that airfares will increase by about 2 euros per passenger each way on a transatlantic or other long-haul flight.
This cost is a lot lower than the cost of most airport taxes and charges.
In addition, carbon regulations are not expected to contribute to net cost increases to airlines.
Secondly, if airlines manage to curb their emissions to levels below their EU-imposed emissions caps, they can take advantage of the unused free permits - to be issued in year one of their inclusion in the EU ETS - byselling them on the carbon market.
This will bring in valuable revenue for otherwise cash-strapped airlines.
In short, while inclusion in the EU ETS may represent some sort of sovereignty infringement, it's very unlikely that the measure will bring down an unbearable financial burden on air carriers or their customers.
