EU's Carbon Pricing Mechanism Challenged in Court

Airlines argue in the European Court of Justice that the EU's Emissions Trading Scheme (ETS) is an overreach when imposed on flights to/from Europe.
July 11, 2011, 9am PDT | Jeff Jamawat
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Emissions by air travel accounts for approximately 3% of the world's pollution, a figure that pales in comparison to other industries'. Adopting the ETS, Europe's cap-and-trade equivalent, will cost the airline industry an estimated $1.6 billion annually, the amount that will be reflected in higher ticket price for consumers.

According to The Economist, "a global carbon market would be better than a European one, but there is no prospect of one starting up any time soon. Nor is the airline industry about to volunteer to pay for the pollution it causes."

"The airlines have a point when they complain that Europe could impose its rules in a discriminatory manner. The ETS requirements can be waived on flights from nations that have what the EU sees as 'equivalent measures' in place-and Brussels will decide what counts as equivalent. The plan would be fairer if such disputes were referred to a neutral forum in which 'equivalent measures' could be defined. And it would be more palatable if governments cut the taxes that they currently justify in the name of greenery."

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Published on Thursday, July 7, 2011 in The Economist
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