EU's Controversial Carbon Tax on Airlines Highlights the Need for New Climate Change Legislation


The impending trade war triggered by the EU's extending its emissions trading scheme (ETS) to the aviation industry highlights the ineffectiveness of arguments of sovereignty and national borders in fighting climate change.

As of January 1, 2012, the EU has included begun to tax all flights operating in European skies for their carbon emissions. This move has sparked an outpouring of global indignation that the EU is infringing upon the sovereignty of other nations. USA, Russia, China, and 20 other countries are currently coordinating to propose potential retaliatory trade measures against this carbon tax. They argue that this law violates existing international laws and treaties, as the EU is levying taxes outside its territorial limits. The bloc contends that the act will distort competition and constrain the airline industry’s development. In fact, the countries have gone as far to say as the EU’s move “jeopardizes efforts” to fight climate change. In line with this thinking, China has already explicitly made it illegal for the country’s airlines to follow this scheme, while Russia has further threatened to cap EU airline flights over Siberia.

However, the EU has refused to be swayed by these threats. Sticking to its guns, it says it will not reconsider the tax unless a global system is in place to ensure emissions from airlines are curbed. It is also considering barring airlines that do not comply with the rules from its airports.

An article in Forbes states that the EU "plans to collect billions of Euros for its near bankrupt nations" and will end up "hitting the travellers right where it counts." The EU, on the other hand, argues that airlines are only required to pay 15% of the cost of compensation for the carbon dioxide emitted during any flight that lands in or takes off from Europe, and that it estimates the cost to the airlines to be 5-10 Euros per passenger. Asking passengers to pay a few Euros more per flight to tackle carbon emissions seems a highly reasonable move. Aviation fuel is already heavily subsidized, facilitating cheap travel. Ticket prices need to begin to reflect the true environmental (carbon and energy) costs of flying, if we plan to tackle climate change seriously.

Additionally, the EU has pointed out that not only has it been forced to take this step as global negotiations under the United Nations Framework Convention on Climate Change (UNFCC) have been stalled for years, but the bloc opposing the move has failed to come up with any constructive alternatives. The UN’s ineffectiveness in negotiating climate change action due to rent-seeking and lobbying by diverse interest groups has been highlighted many times over in the past few decades. Ironically, this tax has united countries that have failed to see eye-to-eye over climate change negotiations for years.

While it is true that the EU’s move violates existing aviation treaties, this simply highlights the need for new laws that take climate change and globalization into account. Our conventional forms of decision-making have grown out-dated, as legislation and policies continue to focus on borders in an increasingly globalized world.

Climate change is a global challenge that falls outside national environmental laws, and requires innovation and global cooperation, independent of national interests. The EU is on the right track. Instead of collectively acting against the EU for its "infringement of sovereignty," these countries would do better to allow it to lead by setting a bold example in fighting climate change.

Photo Credit: markhillary