by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Trading Carbon : December - January 2011
side with them and fire retaliatory shots against the plan. Earlier this year, China blocked a $3.8 billion aircraft purchase by Hong Kong Airlines from French aircraft manufacturer Airbus, while the Indian government has vowed similar anti-EU trade measures. And, in the latest move, Chinese airlines in early November said they will file a lawsuit against the EU before the end of 2011, a move akin to a challenge by US carriers launched earlier this year at the European Court of Justice, Europe's highest court. Chai Haibo, Beijing-based vice president of the China Air Transport Association (CATA), which includes the nation's four largest airlines, said the EU aviation ETS violates the basic principles of international law and infringes on the sovereignty of other nations. However, rather than challenge the legality of imposing regulations on carriers outside of their national borders, experts say CATA will likely base its argument on rules set out by the UN Framework Convention on Climate Change and Kyoto Protocol. They distinguish between the efforts from developed and developing nations, under so-called "common but differentiated responsibilities". In response, experts say the EU may argue that these principles apply to emissions reductions made by countries and governments rather than by companies. Annie Petsonk, international counsel for the Washington An EU cap-and-trade scheme to cut carbon dioxide (CO2) emissions from aviation, due to take off next year, is running into increasing turbulence from foreign governments, threatening to ignite an all-out international trade war and ground the programme indefinitely. Under EU law, from January 1 all flights to or from Europe will have to have carbon permits to cover their CO2 under the bloc's emissions trading scheme (ETS), which has since 2005 regulated the continent's largest emitters. The airlines' caps are set 3 percent below the sector's average emissions between 2004 and 2006, and the roughly 4,000 participating carriers will next year receive 85 percent of their quota in the form of free permits called Aviation EU Allowances (AEUAs). In 2013, the complimentary allocation drops to 82 percent, while the quota to be auctioned remains at 15 percent. The remaining 3 percent is reserved for new airlines joining the scheme. But, despite billions of euros in free permits for both domestic and foreign airlines, and estimates that long-haul air fares will rise at most by ¤15 ($20) as a result of the scheme, carriers say it will cost them ¤1.2 billion next year, or a quarter of the sector's total 2011 profits. They also argue it discriminates against countries located furthest away from Europe, prompting their governments to 22 AVIATION Dec 2011/Jan 2012 www.pointcarbon.com BraceYourself WILL AVIATION'S ENTRY INTO THE EU EMISSIONS TRADING SCHEME NEXT YEAR LEAD TO A TRADE WAR? MICHAEL SZABO REPORTS