The Obama administration will resist the European Union's plan to charge U.S. airlines for the carbon emissions of their trans-Atlantic flights, several of President Obama's lead negotiators testified before a House committee today.
Starting next year, the new European program would require all airlines to have emissions allowances for flights to or from airports in E.U. member states. Most of the credits would be given out for free, but some would be auctioned, costing U.S. airlines an estimated $3.1 billion between 2012 and 2020, according to the industry's main trade group.
Despite a desire to cut emissions that cause climate change, the administration has serious concerns about Europe's emissions trading program, said Susan Kurland, the Department of Transportation's assistant secretary for aviation and international affairs. There is no guarantee European countries would take the money paid by U.S. airlines and put it toward stopping climate change, she said.
"This is the wrong way to pursue the right objective," Kurland told the House Aviation Subcommittee. "We believe that the right way forward is a global solution built on strong domestic action, rather than a system imposed on us from outside."
With the emissions trading plan set to begin in less than six months, Congress is starting to increase pressure on the administration and Europe. Transportation and Infrastructure Chairman John Mica (R-Fla.) and ranking member Nick Rahall (D-W.Va.) jointly introduced a bill last week that would make it illegal for U.S. airlines to take part in the emissions trading program (Greenwire, July 20).
Mica described the program today as a "cash grab." He said U.S. passengers should not have to pay an extra fee for their flights, especially if there is no guarantee the money would be used to develop cleaner airplanes or protect the environment.
Prodded by committee members, administration officials would not say whether they will file an international complaint with either the International Civil Aviation Organization (ICAO) or the World Trade Organization.
But they acknowledged that there are several options for a trade dispute. Kurland said she did not want to telegraph the administration's strategy but noted that another option would be to resolve a complaint through the Open Skies treaty process.
"We are considering a wide range of options," she said.
In recent years, there have been a series of behind-the-scenes talks between U.S. and E.U. officials, leading up to a meeting last month in Oslo, Norway, where the Obama administration's negotiators told their European counterparts that they could not accept the emissions plan.
It was the first time the United States formally objected to the trading program, but officials had been relaying their concerns for years, said Krishna Urs, the deputy assistant transportation secretary at the State Department.
Urs said Europe's plan will hamper the ongoing talks at ICAO, a U.N.-affiliated body that set a goal last year of capping global aviation emissions in 2020. All emissions cuts by airlines are still voluntary, but countries agreed to start reporting their fuel consumption.
An international standard for carbon emissions would "bring about a much more far-reaching and beneficial impact on the climate" than Europe's plan, Urs said.
Anger on Capitol Hill
There was no disagreement at today's hearing, where Democrats joined Republicans in criticizing Europe's program.
Among them was Rep. Peter DeFazio (D-Ore.), who made a tongue-in-cheek suggestion that the United States should find a way to game the emissions market. He said it would not be difficult, which is one reason he voted against the cap-and-trade bill that passed the House two years ago.
"This whole thing is just nuts," DeFazio said.
But environmentalists, who have grown tired of waiting for ICAO to reach a consensus after more than a decade of negotiations, say it is the House bill that does not make sense.
If it is illegal for American airlines to follow the E.U. law, foreign companies will end up with a monopoly on trans-Atlantic flights, 10 large advocacy groups say in a letter sent to lawmakers today.
"In the absence of a global agreement on reducing carbon pollution from the aviation industry, action by the E.U. on flights arriving in or departing from Europe is a sensible first step," says the letter, which was signed by groups such as the Environmental Defense Fund, Natural Resources Defense Council and League of Conservation Voters. "It gives airlines complete flexibility in deciding when, where and how to reduce their carbon pollution."
A trio of U.S. airlines and the Air Transport Association filed a lawsuit with the European Union's highest court to block the program.
They argue that Europe has no authority to regulate foreign emissions. In the case of a flight from San Francisco to London, the trade group said today, 8.7 percent of emissions are released in European airspace. Twenty-nine percent would be released above the United States, 36.9 percent would be released above Canada and 25.4 percent would be released above international waters.
"What is at issue here is nothing less than U.S. sovereignty," said Nancy Young, the trade group's vice president of environmental affairs, in her testimony.