EU backs down on airline carbon tax

The European Union backed down Monday from a plan to levy carbon emission surcharges on international flights entering or exiting the Continent.

Monday’s move came in the face of strong protests from the Obama administration, India, China and other nations that have protested the Emissions Trading System, or ETS, calling the tax an attack on sovereignty.
The EU instituted the unilateral plan in hopes of forcing a trade agreement.

But Monday’s surprise announcement from the European Commission for Climate Action appeared to be aimed at averting a global trade war.

Commissioner Connie Hedegaard said the EU is hopeful an international agreement can be hammered out.
“I’ve just recommended in a telephone conference with the 27 member states that the EU ‘stops the clock,’” Ms. Hedegaard said. Her proposal still awaits approval from parliaments and ministers.

She warned that unless the International Civil Aviation Organization, an agency of the United Nations, approves a plan to limit greenhouse gas emissions from aircraft by next year, the tax will be reinstated.

The European overture got a mixed reception from lawmakers in Washington, where the House and Senate reconvened Tuesday.

The Republican-led House vowed to fight any attempt by the European Union to impose the surcharges, passing overwhelmingly by voice vote a bill making it illegal for U.S. airlines to comply with the ETS. The Senate already unanimously passed the bill.

“We want a long-term solution,” said House Transportation Committee Chairman John L. Mica, Florida Republican. “But we will not allow the United States to be held hostage.”

“The EU’s announcement still does not recognize that its system is illegal and that a global solution, not just one deemed acceptable by the EU, must be the path forward,” said Sen. John Thune, South Dakota Republican and sponsor of the Senate bill with Sen. Claire McCaskill, Missouri Democrat.

President Obama is expected to sign the bill.

A handful of lawmakers questioned whether the hard-line opposition to the carbon tax was shortsighted.

“Rather than doing something constructive about global warming, we are going to ignite a trade war with the European Union,” said Rep. Henry A. Waxman, California Democrat.

Under the EU proposal, all miles covered by a flight entering or departing an EU airport would be taxed — so an American plane leaving San Francisco and landing in London would owe Europe for gas emissions, the bulk of which occurred over U.S. soil.

“It was clear that the ETS had become a roadblock to a global approach,” said Perry Flint, speaking for the International Air Transport Association. “The EU’s plan to tax non-EU carriers operating in non-EU airspace was seen by a number of countries as an attack on their sovereignty.”

Critics of the tax program maintained that it was designed to fill coffers in a financially depressed Europe, not to help the environment.

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