Thursday, June 23, 2011
As expected, the United States registered its formal objection to the European Union's plans to apply its Emissions Trading Scheme to American air carriers in 2012. See Pilita Clark, US Rejects EU Emissions Zone, Fin. Times, June 22, 2011 (available here). According to the Financial Times, the U.S. Department of State and other agencies set forth a series of questions with the intent of finding a way to exempt U.S. airlines from the ETS regulation. So far, however, the EU appears to be standing by its decision to only exempt foreign carriers from countries which have emissions measures which are equivalent to the ETS.
It remains to be seen just what "equivalent measures" the U.S. or other countries would have to devise to satisfy EU regulators. Would the U.S., for instance, have to devise a cap-and-trade system for the airlines with emissions-reduction benchmarks identical to those set forth in the EU's legislation? If the U.S. is afforded latitude to apply a less onerous standard, how far can it dial the regulation down before it is no longer "equivalent"?