The world's first and largest emissions cap and trade programme , the EU Emissions Trading Scheme (ETS), will expand the sectors it covers to the aviation industry from the beginning of 2012.
This new move has drawn criticism and concerns from all over the world, especially non-EU air operators. Will the scheme be accepted globally over the next three months or will it remain an unsettled issue but offer the chance to create a global deal? Is it the time for all countries standing up to the challenge to regulate the aviation industry in a joint effort?
Earlier this week, China and Russia jointly expressed opposition to the imposition of the scheme on foreign airlines flying into the EU, citing issues of sovereignty infringement, additional economic burdens to the industry as well as lack of an international agreement to apply this unilateral plan.
The EU ETS started in January 2005, covering in the past only energy-intensive industrial installations, totaling more than 10,000 across Europe and producing nearly half of the EU's CO2 emissions.
The EU legislation which incorporates aviation into the EU ETS came into force in 2009. Under the guidance, as from 1st January 2012, emissions from all domestic and international flights that arrive at or depart from an EU airport will be governed by the scheme. Like industrial installations, airlines will receive tradeable allowances covering a certain level of CO2 emissions from their flights per year and after each year operators must surrender a number of allowances equal to their actual emissions in that year.
In summary, to comply with the requirements, airlines will have to monitor tonne-kilometers and CO2 emissions from 1st January 2010, report tonne-kilometer data and apply for free emissions allowances by 31st March 2011, and surrender allowances for 2012 emissions by 30st April 2013.
China and Russia have called for air carriers from other part of the world to join their project. They do not stand alone in denouncing the programme. US airlines have filed a lawsu against it.
European airlines have shown support to the initiative, but they have reservations on its implementation, considering the legal challenges, the foreign anger and the impact upon an already recession-mired Europe.
Lufthansa warned of the possibility that the initiative will become a "fiasco" when it goes into effect in 2012.
British Airways (BA) is concerned that it will lead to a negative legal battle at a time when a constructive debate on a global solution is needed. It believes that its implementation without a global solution will damage significantly EU airlines' competitiveness, as international passengers would try to avoid European hubs.
To break the deadlock, BA has suggested the scheme is initially implemented for intra-EU flights only, and to expand it to intercontinental flights when a global initiative that includes aviation is in place.
The aviation industry has grown rapidly in recent years, causing an increase in pollution, and thus there is a growing global awareness that emissions from this sector should be mitigated. In the EU alone, GHG emissions from aviation rose by 87% between 1990 and 2006.
It raises the question whether the EU's intention to provide a blueprint for mitigating aviation emissions through a worldwide cap-and-trade platform will be implemented and taken up elsewhere.
There is no doubt that huge challenges exist for the integration of existing global cap and trade programmes as a global system in the near future. Such programmes include the RGGI in northeast US with a special focus on power sectors and the economy-wide WCI covering western US and parts of Canada, as well as Japan's Tokyo Metropolitan efficiency trading scheme on buildings.
Under such circumstances, would it be a great opportunity for the aviation industrial to pioneer a sector-based global cap and trade programme to engage all countries into a concerted effort in the climate battle? Also, would it be smart for the EU ETS to take this opportunity to improve its system, in setting a benchmark, allowance allocation and trading approach, and to realize its dream in building a global initiative?
worldnewsreview, London, UK
