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Sunday February 26, 2012

Europe can’t go it alone on carbon cap

GLOBAL airlines and foreign governments are crying foul over a European Union-imposed scheme that forces all carriers to pay for the carbon they emit during flights to and from the region. If this pushes air fares up – and there is a good chance it will – travellers are going to be just as upset.

In 2008, the European Union said it intended to charge all airlines flying in and out of Europe for carbon emissions, by adding aviation to the bloc’s market-based carbon trading scheme.

It means airlines will have to keep to a stipulated amount of carbon emissions – awarded to each carrier based on flight and other documents submitted to the EU – or buy extra units from the carbon trading market.

The scheme took effect on Jan 1, but carriers will start paying for the extra units only from April next year. Until then, no payment is required.

A global airline body, the International Air Transport Association (IATA), has estimated that paying for carbon will cost the industry about €900mil (RM3.64bil) next year, with that amount climbing to €2.8bil (RM11.32bil) in 2020.

In its defence the EU, which comprises 27 member states, insists its intentions are noble. To grow sustainably, and for the sake of future generations, the aviation industry must be accountable for the carbon it produces and take steps to reduce it, it says.

The cap and trade system is not a tax but a transparent market mechanism, says the EU.

For almost a decade, the aviation industry, led by the International Civil Aviation Organisation (ICAO) – a United Nations arm – has discussed the implementation of a similar carbon trading scheme at a global level. But talks have not translated into action because there is little consensus on how to move forward.

Notwithstanding this, it is wrong for the EU to bulldoze its way through mounting opposition and insist all carriers must fall in.

First, its proposal is fundamentally flawed because it effectively penalises airlines that operate long-haul non-stop flights. They are charged for the carbon they emit during the entire flight instead of just what they burn over Europe.

If Europe refuses to back down, it could also prompt other countries and economic blocs to impose their own carbon-reducing schemes. Australia is already planning to do so. The result will be chaos and confusion.

There is already a very good example of this in the industry – the different security checks and systems in place at different airports.

There is still time to stop the EU. Although the carbon scheme has been launched, airlines will start paying for credits only from next year. More than 40 countries, including Singa­pore, have told the EU that they object to the scheme.

Last year, the Air Transport Association of America (now Airlines for America), several US carriers, IATA and the National Airlines Council of Canada took the EU to court to challenge the legality of the carbon scheme.

A month ago, the European Union’s Court of Justice upheld the EU’s plans.

But the decision has not quelled growing opposition. China recently instructed its airlines not to comply with the carbon scheme, and India is reported to have done the same. More countries should follow suit.

The escalating row between the EU and the rest of the world has also threatened to hamper efforts to work out an international solution to Europe’s sovereign debt crisis.

This may not be a bad thing, some industry watchers have said, because the need to resolve the euro zone crisis could ultimately push Europe to re-consider its emissions scheme for airlines.

Tom Enders, the chief executive of Euro­pean plane-maker Airbus, recently said he was “very worried” that the EU’s move could spark a trade war between Europe and the rest of the world. “What started as a solution for the environment has become a source of potential trade conflict,” he said.

The matter must be resolved, and it can be if all parties do the right thing.

The EU must back off and understand that even as air traffic will continue to grow strongly in the coming years, the industry has not been resting on its laurels.

Today, aviation accounts for just 2% of man-made carbon emissions. And while there are carriers that fly old planes, many airlines, especially those based in Asia and the Middle East, are constantly renewing their fleets with more fuel-efficient aircraft.

New generation flying machines like the Airbus 380 and A-350 as well as Boeing’s B-787 Dreamliner and B747-8 burn about 20% less fuel than earlier aircraft.

Soaring fuel prices, which account for as much as half of an airline’s total operating costs, is in itself a deterrent against high fuel use. Good progress has also been made in the search for alternative fuels, in particular biofuels, for commercial aviation. This promises to substantially cut the industry’s carbon footprint.

Can the industry do more? Definitely, and it should. But what and how is for ICAO to decide, in consultation with member countries – because in the end, the only way forward is the global way. — The Straits Times/ Asia News Network

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