Monday, August 8, 2011

Emirates Against the ETS

Not surprisingly, the Arab world's largest air carrier, Emirates, has attacked the European Union's Emissions Trading Scheme on the ground that it will cost the carrier up to $1 billion over the next decade.  See Emirates Eyes EU Carbon Tax of $1 Billion Over 10 Years, Reuters, Aug. 8, 2011 (available here).  Moreover, the Arab Air Carriers Association has asked the EU not to include aviation in the ETS.

It's unlikely that Emirates' criticisms will do much to dissuade the EU.  Emirates is one of the few leading international airlines which does not enjoy open access to the Union's 27 Member States.  In fact, EU airlines such as Lufthansa and Air France have lobbied to block the Dubai airline from receiving additional traffic rights.  Moreover, several EU airlines are upset that Emirates utilizes the unofficial "sixth freedom" to move European passengers to its hub in Dubai for final transit to destinations in Africa and Asia.  Emirates has also been subjected to the charge that it relies on illegal subsidies to keep costs down, including export credits to purchase state-of-the-art aircraft.

Even if Emirates alone cannot change the Union's regulatory course, it can contribute another high-profile voice to the already powerful criticisms which have been mounted against the ETS.  Though some airlines are hanging their hopes on a successful outcome to the Air Transport Association's legal challenge which is currently pending before the Court of Justice of the European Union, there's a greater chance that the matter will ultimately be settled in the diplomatic arena.

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