Europe’s Carbon Scheme Goes Awry

The road to hell is paved with good intentions, or so the saying goes at least. Actions by the European Commission often fail to attract attention in the American press. Such was the case when Connie Hedegaard, the EU Climate Commissioner, decided to temporarily suspend EU carbon emissions rules on inter-continental travel for airlines.

The EUs carbon emission policies had fallen under harsh criticism from corporate lobbying groups as well as 26 governments including rivals such as the US, China, India, Russia, and Japan. Essentially everyone was united in opposition against the EU’s carbon policy measures besides the EU itself.

That changed on November 12 when the measure was suspended by the EU, no longer requiring all airlines to buy carbon credits to offset their emissions on any flight to and from Europe. Apparently the Commission’s measure had a series of unintended consequences, including pressure from European aircraft manufacturer Airbus after the Chinese refused to sign off on a large order of planes because it objected to the EUs carbon policy. In addition, the united group of countries opposed to the carbon emissions policy proposed retaliatory measures such as re-opening existing trade agreements in sectors other than aviation, levying new taxes on EU airlines flying into non-EU countries, and obstructing EU airlines from obtaining preferential routes.

I am not quite sure where the line is officially drawn, but this may have been the world’s first trade war based on carbon policy. Congratulations Europe.

I am being facetious, of course, but my point is that regulating carbon emissions is a noble and worthy cause, yet probably something that should be done on a global level. That was also the EUs conclusion when they turned over the regulating task to the International Civil Aviation Organization (ICAO), a special agency of the United Nations . Ms. Hedegaard and the other advocates of the EU carbon emissions policy finally suspended their measure once the ICAO decided to develop a global mechanism for tackling the issue. Given that there are 191 members of ICAO, including the opponents of the initial legislation, the outcome will likely be a watered down version of the EUs carbon emission policy.

Nevertheless, this is a step in the right direction for global regulation, environmental protection, and markets devoid of protectionist agendas. Only by thinking globally can we solve problems that are truly international in nature. Who knows what issue could be next, perhaps global regulation of financial services or even a commitment to cleaner energy and the environment.