Bridges Trade BioRes • Volume 12 • Number 20 • 3rd December 2012

Obama Signs Bill to Shield US Airlines from Europe’s Climate Measures

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US President Barack Obama on November 27 signed a bill into law giving a green light to Transportation Secretary Ray LaHood to shield US airlines from the emissions trading scheme (ETS) in Europe, if he determines it to be in the public interest. The EU had decided to include airline emissions from intra-European, as well as flights bound into and from the continent, in order to spur action in an area that has seen notoriously little progress in emissions reductions over many years.

The new law was well received by Airlines for America, an industry lobby group, which estimates that compliance could cost American carriers about US$3.1 billion between now and 2020. Aside from the US, the ETS has also seen opposition from China and Russia. The scheme is accused of being unfair, as it would force airlines to trade credits for pollution for an entire flight, not just while over European airspace.

The bill is unusual as it could prevent American companies from complying with the laws of another country. The support for the bill stems from the perceived overreach of ETS as it pertains to aviation.

“It never made a bit of sense for European governments to tax our citizens for flying over our own airspace,” said Senator Claire McCaskill, one of the bill’s co-authors. “With passage of this law we’ve got the tools we need to prevent it from happening and protect American jobs.”

The White House meanwhile stressed that it is committed to reducing carbon emissions from civil aviation, but that the right approach is through a global solution under the International Civil Aviation Organization (ICAO). The EU recently proposed suspending enforcement of the aviation clause of the ETS for inbound and outbound flights for one year with the hopes that negotiations at the ICAO could lead to such an agreement (see Bridges Trade BioRes, 15 November 2012). The scheme will still apply to intra-EU flights.

The bill notably helps push for a global deal by including a clause instructing the Transportation Secretary, the Federal Aviation Administration’s Administrator, and other “appropriate officials” of the US government to use their clout to engage in international negotiations aimed at establishing a global mechanism to address aircraft emissions - including the environmental impacts.

Environmental groups expressed disappointment with the bill’s signing, but acknowledged the possible opportunity for pursuing a global deal.

“The administration has appointed high level representatives to pursue a global solution for aviation and climate,” said Keya Chatterjee, Director of International Climate Policy at WWF. “The White house now must endorse a global, market-based measure to rein in carbon pollution from aviation. If they do, we are optimistic that the US can work with ICAO to develop a package of policies that will reduce our share of global emissions.”

ICTSD reporting; “Obama quietly signs bill shielding airlines from carbon fees in Europe,” THE HILL, 27 November 2012; “Obama shields U.S. airlines from EU carbon fees,” CHICAGO TRIBUNE, 27 November 2012; “Congress Sends Obama Bill Shielding Airlines From EU Rule,” BLOOMBERG, 13 November 2012; “Obama signs bill shielding U.S. airlines from EU carbon fees,” PLANETARK, 28 November 2012.