Airline Carbon Tax: US Fights, EU Postpones, Environmentalists Worry

The U.S. House of Representatives passed and sent President Barack Obama a bill Tuesday that would bar U.S. airlines from having to pay penalties under the European Union’s controversial Emissions Trading Scheme, or EU ETS. The proposal, which already passed the Senate, came one day after an EU commissioner proposed suspending the program while efforts to reach an internationally agreed upon approach to reduce emissions continue through the International Civil Aviation Organization, or ICAO.

Airlines for America, or A4A, an industry trade organization, lauded the bill’s passage, saying that Congress recognized that the EU ETS “violates international law and U.S. sovereignty” and is “counterproductive to U.S. airlines’ ongoing efforts to invest in the technology, operations and infrastructure measures that enhance fuel efficiency and reduce emissions.”

"EU ETS violates U.S. sovereignty and will not do what it purports to as the funds do not have to be used for environmental protection," said A4A President and CEO Nicholas E. Calio. "There is a better way to improve the environmental efficiency of the airline industry, and U.S.-based carriers are already leading those efforts."

Calio said A4A strongly supports efforts toward a global framework provisionally adopted by ICAO in 2010, which includes an industry commitment to a 1.5 percent annual average fuel-efficiency improvement through 2020 and carbon neutral growth thereafter.

A4A further claims U.S. airlines improved their fuel efficiency by 120 percent over the past three decades at the equivalent of taking 22 million cars off the road in each of those years.

Keya Chatterjee, director of international climate policy at the World Wildlife Fund, or WWF, does not see things in the same light. She calls the measure an anti-climate action bill.

“This is the first post-election, post-Sandy climate test for the U.S. government,” she said. “The president’s slogan for the campaign was ‘Forward,’ but this bill would certainly take us backward on the issue of addressing climate change.”

WWF has called on Obama to veto the bill.

“Progress is being made to regulate carbon pollution from aviation through the U.N.’s International Civil Aviation Organization, but far too slowly,” Chatterjee said. “This week, the EU has shown flexibility to help speed up that process, and the U.S. Congress responded by passing a counterproductive bill that turns its back on the olive branch extended by the EU.”

The White House has not yet said whether it supports or opposes the bill, though both Secretary of State Hillary Clinton and Transportation Secretary Ray LaHood have called the EU’s policy misguided. Many lawmakers argued that the EU ETS violates U.S. sovereignty, enforces charges on emissions discharged over the U.S. and Atlantic en route to European destinations and would cost carriers $3.1 billion by 2020.

Other countries such as China and Russia have also opposed it and have taken retaliatory action.

The EU standard, which went into effect in January, mandates that airlines obtain allowances for each ton of carbon dioxide emitted during a flight to or from most European airports. Any international carrier that emits more than they’re allowed can purchase additional allowances on an open market. Payments for the scheme were to have started next April, a date now extended due to the announcement Monday.

Though U.S. lawmakers welcomed the EU’s change of tone, they argued it was still necessary for Congress to pass the bill to ensure that U.S. carriers will not get taxed by the EU in the future.

Now, it’s up to Obama to decide whether or not to sign it into law.