Fly and be Damned

From 1 January 2012, airlines are included in the EU Emissions Trading Scheme. This requires airlines flying into Europe to hold EU Allowances to cover carbon emissions from their flights and operations. The bulk of these will be provided free based on the airline’s historical aviation emissions averaged over the calendar years 2004, 2005 and 2006. Additional allowances will have to be purchased. With the price of EU ETS Carbon Trading Permits hovering around €8, this will cost airlines up to €1bn ($1.4bn) in 2012 rising to perhaps €10bn ($14bn) by 2020.

The additional cost to airlines is minor compared with their fuel bill but the measure has met with a barrage of complaints from the aviation industry. US airlines are particular opposed arguing that the measures represent a tax and therefore contravenes international law that prevents countries from levying tax on aviation fuel. In a letter dated 16 December leaked to the Financial Times, Hillary Clinton, US Secretary of State wrote to her counterpart at the European Commission, Catherine Ashton, to express US displeasure warning that the US government will be “compelled to take appropriate action” if ETS application to US carriers is not removed.

One of the more bizarre complaints comes from The International Air Cargo Association (TIACA). The group wrote to EU climate commissioner Connie Hedegaard claiming the scheme would divert investment away from cleaner technologies, such as biofuels or more efficient engines. This is an odd claim to make in an industry that pays no tax on its fuel. Taxing fuel or carbon, or both, is the way to drive forward investment in more efficient engines and more efficient aircraft. To attempt to persuade politicians otherwise makes the industry look ridiculous.

The airlines will pay up and get on with their business. The inclusion of airlines in the EU ETS will have very little effect on airline profits and very little effect on the emissions from aviation. The huge furore has been more about holding back future action over aviation emissions. The industry is terrified that the EU ETS could be a trip wire to a process leading to real action over aviation and climate change.

My immediate advice to the aviation industry is to invest in purchasing all copies of the first print run of my book Fly and be Damned: what next for aviation and climate change when it comes out next month. Delaying copies getting into the hands of the politicians will give airlines a little more breathing space. When politicians and policy makers digest its contents they will understand that the EU ETS is not the end but only the first small step on a long journey to a sustainable aviation industry.