ATW Editor's Blog

EU's red rag to a green bull

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Just when you thought it might be time to start ratcheting down the hot air on the EU Emissions Trading System (ETS) and begin instead some cool and common-sense negotiations, the European Parliament today issued a resolution asking the EU to implement ETS in full.

Although just another non-binding resolution in the continuing ETS saga, Parliament also put out a statement containing words of strong support for the aviation carbon tax and for the European Commission, while adding another dig at those who are against the ETS (which is just about everyone except the EC and most EU Members of Parliament, who voted for ETS by 398 to 132.)

"If Europe would decide not to implement the legislation just because of the pressure from third countries, that would be a very negative precedence also for other fields of politics, such as regulation of the financial market or trade policy," MEPs Matthias Groote and Peter Liese said in a joint statement.

They added that they would ask the EC to include a provision in ETS legislation to continue to seek a global agreement via ICAO. But then another kick: "Unfortunately, the third countries have no common idea how ICAO should address the problem."

There are many problems with the MEP's statement, including the fact that it talks of third countries and lists the US, China, India, Brazil, Belarus, Uganda and Guatemala, but omits any mention of the European aviation companies and airlines that this week formed a coalition to protest ETS.

It also says worldwide reaction is disproportionate because ETS is "a very low burden" on airlines when compared with national tax duties that countries already impose. This ignores the fact that the actual cost of ETS at this stage is largely irrelevant; what has everyone stirred up is the principle of the EC unilaterally imposing an aviation tax on non-EU nations without due and proper dialogue with those countries, whether directly or via ICAO, the internationally-recognized body for such matters. In any case, whoever heard of a tax, once implemented, getting smaller?

But most wrong of all, the MEPs' timing for such a resolution and high-handed statements is disastrous. Either they have paid no attention to the increasingly vehement and unified protests from all parts of the world and aviation industry, or they have decided they are ready for a fight, perhaps seeing it as cause d'honneur that will make them personally appear good before their constituents.

Again, they are wrong. As with so much of politics today, they ignore the now very real potential for a trade war that would damage the European financial markets and European trade -- the "other fields of politics" they claim to be protecting. And given the already precarious state of the euro, that's a terrible risk to take.

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