Aviation trade war fears recede as UN looks to broker emissions deal

UN-backed meetings are being held to produce a global agreement on curbing airline emissions.

They follow a US decision to reject Brussels’ ruling to apply its emissions trading scheme (ETS) to foreign airlines both when using EU countries’ airports and while flying in non-EU airspace. The ruling led to murmurings that this could cause a trade war.

Alternative emissions policies are being worked on by a 15-nation panel of the UN’s International Civil Aviation Organisation (ICAO), which is gathering for a third time before early April.

Under the ETS, airlines would trade credits for pollution from flights under a system similar to the cap-and-trade proposals urged by US environmentalists. The EU added that airlines should cut emissions by 5% by 2020.

President Barak Obama responded with a law excluding US airlines from the scheme.

The US government said it was “firmly committed to reducing harmful carbon pollution from civil aviation both domestically and internationally”, but believed applying the ETS to non-EU carriers was the wrong method.

Commercial carriers were among the loudest voices arguing that the ETS was unfair in charging airlines for emissions on entire transatlantic flights, not just through European airspace.

They predicted that the ETS would cost the airline industry $3.1bn (£1.95bn, €2.33bn) by 2020.  

Nicholas Calio, president of Airlines for America, said: “Working within the framework of the ICAO, the US will continue to lead the effort to secure a policy that will meet the twin goals of allowing for industry growth and continuing improvements in fuel efficiency and reduced emissions.”

Senator Claire McCaskill, a Democratic sponsor of the US legislation shunning the ETS, said: “It never made a bit of sense for European governments to tax our citizens for flying over our own airspace.”

The WWF’s international climate policy director, Keya Chatterjee, though unhappy with the US action, said: “There is a silver lining here. The administration has appointed high-level representatives to pursue a global solution for aviation and climate.

“The White House now must endorse a global, market-based measure to rein in carbon pollution from aviation. If they do, we are optimistic that the US can work with ICAO to develop a package of policies that will reduce our share of global emissions.”

The EU, which intended to implement the scheme this year, has frozen it until next year. It warns the measures will be imposed automatically in 2014 if the panel’s discussions fail.  

The panel consists of representatives from Australia, Brazil, Canada, China, France, India, Japan, Mexico, Nigeria, Russia, Saudi Arabia, Uganda, the United Arab Emirates, the UK and the US.

An additional issue it is exploring is the use of revenues generated, including helping nations to counter the impact of climate change.