June 23, 2011
U.S. Issues Formal Objection to ETS
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"?
June 20, 2011
Consolidation and Rationalization
Blog readers may be interested in Antigoni Lykotrafiti's working paper, Consolidation and Rationalization in the Transatlantic Air Transport Market--Prospects and Challenges for Competition and Consumer Welfare (TILEC Discussion Paper No. 2011-033, June 20, 2011) (available from SSRN here). From the abstract:
The Discussion Paper examines the regulation of the air transport sector from the perspective of competition law, focusing specifically on EU-US air transport relations. Emphasis is placed on the ongoing negotiations between Europe and the United States for the creation of a transatlantic open aviation area, where American and European airlines will operate freely without restrictions on traffic rights, subject solely to common rules agreed between the parties. In 2007, the first-ever EU-US Air Transport Agreement was reached, followed, in 2010, by a second-stage agreement. All efforts are now concentrated on the conclusion of the final agreement. Given that the transatlantic air transport market accounts for almost 60% of world traffic, the conclusion of the final agreement will signal the creation of the biggest liberalized airspace in the world. The prospects and challenges thereof are expected to be major and are examined from the perspective of the consumers, the airline industry and the law itself. The first part of the paper is a flight into the past, tracing the regulation of air transport from the birth of civil aviation up until today. The second part is a flight into the future, aspiring to foresee how smooth or turbulent the transition to the new regime is going to be. Given that the successful application of the final agreement is dependent upon effective regulatory cooperation aimed ultimately at regulatory convergence, the analysis looks into the prospects and challenges associated with regulatory convergence at both sector-specific and general competition law level.