Wednesday, June 6, 2012

Could a Different ETS Regime Have Avoided Legal Controversy?

Last month's DePaul-Beihang workshop generated an interesting question, whether the ETS could have been applied to aviation in a way that circumvented the current criticisms of the scheme's extraterritorial reach. Professor Alberto Coll of DePaul inquired about the legality of a scheme that only measured an aircraft's emissions over the portion of the flight occurring within EU airspace, rather than the duration of the flight. He suggested that to get the same deterrent effect the EU significantly increase the allowances charged for what would inevitably be a much lower total of emissions measured. While on its face, this addresses the extraterritoriality complaint, this proposed solution raises practicability issues.  Such a scheme would undoubtedly harm service to cities within the interior of the contiguous airspace belonging to EU Member States, which would become substantially more expensive for foreign carriers than flights to cities on the European periphery. EU carriers that fly domestic routes would be certain to object to the resulting competitive disadvantage. It was also speculated that there could simply be a flat amount surrendered for all emissions, regardless of flight duration or landing point within the EU. Such a change would counteract a central purpose of the cap-and-trade scheme, providing operators with an incentive to limit their emissions. A flat charge would sever the connection between emissions and costs, removing that incentive. Additionally, a set fee (even one determined in allowances rather than dollars) would only increase the legal questions about the scheme's resemblance to an illicit tax, rather than a permissible regulation. The end result of this thought experiment is a further illustration of how international law almost requires that aviation emissions be regulated by international agreement, rather than a more cleverly devised unilateral scheme.

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