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Obama shields U.S. airlines from EU carbon fees

Source: Thomson Reuters Foundation - Tue, 27 Nov 2012 10:57 PM
Author: Reuters
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By Valerie Volcovici

WASHINGTON, Nov 27 (Reuters) - President Barack Obama signed a bill on Tuesday shielding U.S. airlines from paying for each ton of carbon their planes emit flying into and out of Europe, despite a recent move by Europe to suspend its proposed measure for one year.

The carbon fee bill was the first piece of legislation debated on the House floor after Congress returned from recess on Nov. 13, and had been cleared by the Senate in September in a rare unanimous vote.

It directs the U.S. transportation secretary to shield U.S. airlines from Europe's carbon emissions trading scheme (ETS) if he or she deems it necessary.

Lawyers have said the bill is unusual because it would prevent U.S. companies from complying with the laws of another country.

"The Obama administration is firmly committed to reducing harmful carbon pollution from civil aviation both domestically and internationally, but, as we have said on many occasions, the application of the EU ETS to non-EU air carriers is the wrong way to achieve that objective," Clark Stevens, a White House spokesman, said.

He added that the administration is focused on making progress toward a global solution to reduce emissions under the International Civil Aviation Organization (ICAO), the U.N. body that deals with aviation issues.

The U.S. airline industry's main lobbying group, Airlines for America, praised Obama and said it, too, favored working through the ICAO to solve the problem. The group estimated that complying with the EU law would have cost U.S. airlines ${esc.dollar}3.1 billion between now and 2020.

"It never made a bit of sense for European governments to tax our citizens for flying over our own airspace - and with the passage of this law we've got the tools we need to prevent it from happening and protect American jobs," said Democratic Senator Claire McCaskill, a co-author of the bill.

The House passed the bill despite a Nov. 12 announcement that the European Union would "stop the clock" on enforcing its law for one year.

The European Commission said it would delay the application of its law to give ICAO enough time to craft a global framework to address emissions before the next assembly of all 190 members next autumn.

McCaskill and co-sponsor Republican Senator John Thune said in a statement that their bill had pressured the EU into delaying the enforcement of their cap-and-trade scheme for aviation.

The EU had also been under pressure from China, one of the world's fastest growing markets for aircraft, which had threatened to cancel orders of European Airbus aircraft if the EU did not back down from applying its ETS on all airlines.

One EU official took to the social networking site Twitter to suggest that United States was not making good on suggestions for "greener" policies.

Obama made reference to climate change as one of a trio of issues facing the country in his victory speech after being re-elected on Nov. 6.

"So far the reelected President Obama climate policies look EXACTLY as in first term. Wonder when we'll see the announced change?" Connie Hedegaard, EU Climate Change Commissioner, said in a tweet.

Green groups critcized Obama for signing the anti-ETS law as one of his first post-election acts but said the administration has the opportunity to back a global solution under ICAO.

"The White House now must endorse a global, market-based measure to rein in carbon pollution from aviation," said World Wildlife Fund's Keya Chatterjee.

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