Why the EU is Freezing its Airline Carbon Emissions Law

The EU announced on Monday that it will freeze for a year its rule that airlines need to pay for the carbon emissions of flights taking off or landing within the EU. The decision, according to EU officials, came as a result of positive developments at the International Civil Aviation Organization (ICAO) Council meeting last week, which got the EU to believe that “a global solution for addressing the fast growing aviation emissions from international aviation is within reach at the upcoming ICAO Assembly in 2013.”

The EU explained that its decision to “stop the clock” on the regulation is nothing but “a gesture of good faith," giving ICAO a chance to create within a year an international regulatory framework to tackle emissions from aviation. “This is a long sought for opportunity that we must use. This is progress!” EU Commissioner for Climate Action Connie Hedegaard wrote. But is this really the case here?

This move can be presented from two different perspectives – the first is that the EU, which was under tremendous pressure to cancel the regulation from almost every country in the world, just caved in. The other one is that the EU made a practical decision, truly believing that the ICAO can now achieve real progress in reducing aviation emissions on an international level. My guestimation is that both perspectives have merits, although I suspect that the former played a more important role in this decision rather than the latter.

The first reason to believe the pressure on the EU played a dominant role in this decision is its magnitude – it seemed like everyone was pressuring the EU to change its mind in every way possible – legally, politically and economically. Take China, for example. Airbus Chief Executive Fabrice Bregier said in September that “China was withholding signature on 35 to 45 orders for wide-body A330 planes as it awaited a signal from the EU that plans to include global airlines in the emissions trading scheme would be suspended.” In the U.S., the Senate and the House passed bills giving the U.S. transportation secretary authority to stop U.S. airlines from complying with the EU law, and India announced that Indian air carriers will not comply with the EU's scheme.

So, what was the reason for this resistance in the first place? Is it that airlines are OK with paying for their carbon emissions but didn’t like the way the EU did it, seeing it as a unilateral trade levy, or airlines just don’t want to pay for their carbon emissions? Companies would, of course, claim it’s the former, but looking at the history of the talks on this issue at the ICAO, it looks like the latter seems more reasonable. After all, as the Guardian noted, "the commission's move on aviation in the ETS buys some time for ICAO, who were arguably galvanised into action by the EU in the first place after years of foot-dragging on this issue.”

Another element that makes you feel that the decision is mostly because of the pressure and less about the opportunities to develop a multilateral agreement at ICAO is the vagueness of ICAO’s decisions last week, the ones the EU is excited about. As the EU notes, the meeting participants agreed that a high level policy group will be set up shortly, options for a regulatory Market Based Mechanism (MBM) will have to be reduced from three to one and “there is an explicit reference to the global MBM that the world now needs to agree on.”

Connie Hedegaard acknowledges that there’s a long way between these decisions and reaching an agreement on an international regulatory scheme, but believes it is worth a shot. “This is a chance; we create this phase for a positive negotiations, but it has to be used,” she said. “If this exercise ends in nothing, then needless to say we are back to exactly where we are today with the EU ETS and we are back there automatically.”

You can look at it as another example of European naivety, the sort that gets European officials to believe that the world can reach an agreement on climate change at the UN climate conferences, just to be disappointed time and again. Yet, in fairness, the EU made it very clear that it’s just a one-year freeze and if the ICAO assembly fails to move forward in time, “the EU ETS legislation would be applied in full again from 2013 onwards.” In addition, the rule on all flights within EU will remain intact, so the scheme won’t be completely frozen, although it will now be relevant mostly to European airlines, at least for the upcoming year.

In all, I think that even if one year from now we won’t have ICAO scheme and the EU won’t be able to go back to its own original plan, we shouldn’t blame the EU for that. This is not the EU’s fault, but our own fault. If no stakeholder stands up to demand explanations from airline companies on why they resist a pro-climate scheme that will help them reduce their carbon footprint while only adding couple of dollars to the price of a ticket, then how can we blame Connie Hedegaard for caving in?

[Image credit: caribb, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.