EU court upholds cap-and-trade plan for aviation carbon emissions

Written on December 21, 2011.

On December 20, 2011, the European Court of Justice rejected arguments by U.S. and Canadian airlines that the E.U. cap-and-trade programs on flights to and from airports in Europe infringe on their national sovereignty and violate international aviation treaties. The court found that by choosing to operate to European airports, non-European airlines have submitted to E.U. jurisdiction.

The cap-and-trade plan has been hailed by environmentalists as an effective program to deal with aircraft carbon emissions but the scheme has been characterized as an exorbitant tax by U.S. airlines.

Objections to this unilateral action by the E.U. will likely result in a global trade dispute with threats of trade retaliations by non-E.U. countries. In the meantime, higher airline prices are a certainty. I.C.A.O. is the appropriate forum for the development of a global carbon emissions program, but its failure to develop a concrete solution to deal with pollution issues through international accord makes the E.U. initiative understandable.  

The program is to take effect on January 1, 2012, and is among the broadest measures developed by any country to regulate greenhouse gas emissions.