(Gerard Wynn is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON Nov 3 A European Union plan to charge
airlines for their carbon emissions has made unlikely allies of
China and the United States in a trade dispute which underlines
a failure in climate leadership by the world's top two emitters.
Their resistance could sap progress at a U.N. climate
conference in Durban which starts later this month and
may be a forerunner of similar disputes, for example over
prospective EU environmental limits on fuels including Canadian
crude from tar sands and Asian biofuels.
The EU from January next year will require all flights into
and out of Europe to account for every tonne of carbon
emissions, including those outside European airspace, and buy
permits where these exceed a certain quota.
A majority of countries in the 36-member, U.N. International
Civil Aviation Organization (ICAO) on Wednesday adopted a
non-binding declaration urging the EU to refrain from the
measure, which effectively includes flights from non-EU airlines
in the bloc's emissions trading scheme.
Emerging economies argue that border measures lump them with
richer countries, forcing them to take equivalent climate action
and so contradicting a 1992 U.N. Climate Convention which puts
the onus of carbon emissions cuts on developed countries.
Both U.S. and developing country opposition to the EU
airline plan has focused on a preference for multilateral
action, among other, legal objections for example that the plan
counts as tax on jet fuel.
The positions seems inconsistent.
Clearly it's optimistic to expect Europe both to take
world-leading climate action and only regulate consumption of
products made inside its own borders, exempting imports and
hurting its own industry.
And by exercising balancing border adjustments the bloc is
applying measures similar to those included in a draft U.S.
climate bill, which ultimately failed to pass the Senate last
year, but which did pass a House of Representatives which voted
last week to ban U.S. airline compliance with the EU plan.
The opposition drives home how a rather small trade measure
- the EU estimates it will add $1-9 each way to the cost of a
long-haul ticket - can leverage a lot of politics.
And there's more to come: the EU's executive Commission is
also working up plans to limit the use of more carbon-emitting
fuels, threatening biofuel imports from Malaysia and Indonesia
and oil extracted from tar sands in Canada, under its Fuels
Imposing border tariffs, adjustments and other limits
inevitably raises tensions.
Perhaps for that reason, the EU has so far chosen to shield
its domestic steel and cement industries from its emissions
trading scheme, giving them free carbon permits rather than
penalise local production and take equivalent steps against
Evidence of a global political backlash to its aviation plan
is now abundant.
Apart from Wednesday's ICAO declaration, U.S. airlines have
sued the bloc at the European Court of Justice.
And India has tabled an agenda item on "unilateral trade
measures" to be discussed at a Durban climate conference which
starts later this month.
The move may illustrate a new hardline Indian stance since
the departure of former environment minister Jairam Ramesh, who
took a committed position on applying green concerns.
The agenda item will mobilise opposition to the EU aviation
scheme and likely garner support from holdout countries such as
oil exporter Saudi Arabia.
It could also entrench a circular stalemate at multilateral
talks where progress would make unilateral action such as that
of the EU less necessary.
The Durban meeting will fail in the main aim of the UN
talks, to agree a broad, new climate deal to succeed the Kyoto
Protocol whose present round expires in 2012, largely because
domestic politics at present will stop the United States from
ratifying a deal.
But there is much to play for, both on a face-saving
commitment to reach agreement in 2015 or so, and in the meantime
to mobilise aid for countries most vulnerable to temperature and
sea level rises.
(Editing by Jason Neely)