June 17, 2011
Opposition to EU ETS Continues
The full-court press against the European Union's plans to bring non-Union airlines under its Emissions Trading Scheme in 2012 is underway. According to several news outlets, the United States plans to issue a formal objection to the ETS at the upcoming meeting of the Joint Committee established by the 2007 U.S./EU Air Transport Agreement. See Daniel Michaels, Airline-Emissions Plan Draws U.S. Fire, Wall St. J., June 17, 2011 (available here). Thus far, the EU claims it will not back down from the controversial (and possibly illegal) regulation.
A number of other States, including China and Russia, have publicly criticized the proposal and suggested that they would take retaliatory measures unless their respective airlines are exempted from the system. Meanwhile, several U.S. airlines will have their legal challenge to the regulation heard by the European Court of Justice early next month. While it is perilous to predict how the ECJ will rule, it's no secret that the Court has seldom curtailed the European Commission's ever-expanding custody of the Union's external aviation law and policy. Should the ECJ let the ETS stand in its present form, the U.S. and other States could still attempt to leverage dispute settlement provisions in their respective air services agreements with the EU to win regulatory forebearance. Alternatively, or in addition, they could bring a formal complaint before the International Civil Aviation Organization.
Even if all of the formal challenges to the ETS fail, the EU (and its airlines) will still have to reckon with the aeropolitical costs. Few, if any, of the objecting States are likely to welcome future EU overtures for new rounds of aviation trade talks until the ETS issue is settled. More importantly, countries such as China and Russia, which have never been shy about threatening to erect trade barriers to win concessions on a host of geopolitical and economic issues, could use the ETS as a pretext for ratcheting back the already restrictive market access rights they provide to EU airlines. The U.S. could follow suit, though given the fact that all of its major airlines are currently integrated into complex alliances with EU carriers, it's unlikely the U.S. would take any strong action which might jeopardize those relationships. Still, it is not out of the question that the U.S. could target airlines or other EU industrial sectors in an effort to divert the Union from its present regulatory course.
June 15, 2011
Word of the Day
Mark Giagrandi, one of the Research Librarians at DePaul University College of Law, brought to our attention a blog post by The Atlantic's Alex Madrigal on "15 New Words From the 1927 Webster's International Dictionary." What was one of the words?
airplane, n: A form of aircraft, heavier than air, which is driven through the air by a screw propeller, and which obtains support by the dynamic reaction of the air against the wings.Airplane is commonly used to designate airplanes with landing gear suited to operation from the land. If the landing gear is suited to operation from the water, the specific term seaplane is generally used. Cf. SEAPLANE, below. Airplanes are classified as monoplanes, biplanes, triplanes, quadruplanes, or multiplanes, according to the number of parts into which their main supporting surface is divided. The form airplane has been officially adopted by the United States Army and Navy, Bureau of Standards, etc.; aëroplane is still generally used by British writers.
June 14, 2011
AEA Attacks ETS
Ulrich Schulte-Strathaus, Secretary General of the Association of European Airlines, issued a strongly worded rejoinder in today's Financial Times in response to the paper's June 7 editorial supporting the expansion of the European Union's Emissions Trading Scheme to aviation. See Ulrich Shulte-Strathaus, Airlines' Concerns Over EU ETS, Fin. Times, June 14, 2011 (available here). According to Schulte-Strathaus, the ETS will cost EU airlines approximately 3.5 billion euro per year and that the revenues captured from the plan to auction a percentage of the airlines' carbon allowances won't be reinvested to mitigate climate change. Also of concern to the EU airlines are the tensions the ETS plan is creating with foreign countries.
The United States and China have been vocal in their objection to the application of the ETS to their respective air carriers. Though neither has committed to a concrete course of action thus far, both States have indicated that they may seek retaliatory measures against EU airlines unless the Union is willing to limit the scope of the ETS. Several U.S. airlines, acting in concert with the Air Transport Association, are attempting to challenge the legality of the ETS regulation before the European Court of Justice. If that action fails, there will be considerable preassure on the U.S. Government to take strong action to protect the commercial interests of American carriers, up to and including revoking the market access privileges of EU airlines. The result could be a financially destructive trade war that unravels the manifest consumer benefits of the landmark 2007 U.S./EU Air Transport Agreement. Moreover, China--which has long resisted any encroachment on its sovereignty--could take similar action. If so, Europe's airlines will find themselves facing economic bombardment on two fronts--battles from which they won't escape unscathed.