Thursday, October 6, 2011
The advocate general of the European Court of Justice released a much-anticipated opinion this morning, finding the EU's emissions trading scheme valid under applicable international law (full opinion available here). The American carriers had alleged that the EU's plan violates the Chicago Convention, customary international law and the US/EU Open Skies agreement by regulating flights over non-EU airspace in excess of EU's regulatory authority, unilaterally implementing a scheme in an area under ICAO purview, and subjecting non-EU carriers to the equivalent of a tax for entering and exiting EU airspace or airports. The advocate general was unconvinced by any of these arguments. The advocate general in fact declared that the Chicago Convention was not binding on the EU, as the EU is not a contracting party to the Convention, though all 27 of its member states are. The advocate general went on to explain that even if the Convention were binding, the Convention would still be unlikely to prohibit the EU scheme. The opinion concludes that because the scheme only applies to flights that land at or take off from EU airports, there is a sufficient territorial connection to the flights being regulated to satisfy the Convention as well as customary international law. Additionally, according to the opinion, the designation of the emissions issue to the ICAO was not exclusive and does not prohibit unilateral action and the ETS emissions allowances are distinguishable from a tax because of the market-based system through which they are purchased. The blog will provide a detailed analysis of each of these legal conclusions tomorrow, but readers interested in an opposing take on these interpretations should read Brian F. Havel and Gabriel S. Sanchez's Toward a Global Aviation Emissions Agreement available from SSRN here.
Though the advocate general's opinion is nonbinding and the full court may come down differently when it provides its opinion, today's opinion suggests that if the ETS issue is to be resolved before taking effect in January it will likely require a political as opposed to a legal solution. Had the opinion come down on the side of the carriers the EU might have felt pressure to compromise on the issue. Many of the ETS opponents had recently expressed optimism about the legal challenge. The next step in the ongoing diplomatic standoff over aviation emissions may not come until the ICAO meeting next month.