Connie Hedegaard, the EU commissioner for climate action, said earlier this month that more than 99 percent of all major global airlines had already submitted the required baseline emissions data for 2011, complying with the first step of the controversial EU Emissions Trading Scheme (ETS) to charge for their carbon emissions.
She also noted that only eight Chinese airlines and two Indian ones did not comply by the March 31 deadline.
However, so far we have not seen any statements from major airlines of the US, Russia and Japan in response. The US, Russian and Japanese governments also did not announce that they have decided to comply with the ETS.
The carbon tax row is like a tug of war and it is too early to say that the EU has already gained the upper hand. Unlike China and India, the governments of the US, Russia and Japan did not issue any policies binding their airlines not to comply with the ETS. But airlines in these countries also opposed the ETS after it was announced.
A group of US airlines last year tried to block the EU plan, though their lawsuit against the ETS was rejected by the Court of Justice of the European Union. One of the major concerns of nations outside the EU over the ETS is that the scheme is unreasonable because it charges for all flights in and out of the EU region, but the fees charged will only be used to improve the environment in the EU.
This will be used to launch fresh emissions trading schemes with higher and stricter standards, which can be used to continue to charge airlines of other countries and regions for their carbon emissions. It seems that the EU will always be the standard-maker and others will have to comply with it.
The ETS has already been passed by the EU, so it is unrealistic for us to expect the EU to drop it entirely, but this does not mean there is no way out of the crisis.
The EU has stated a compromise could be reached if airlines of other nations could be charged for their carbon emissions under similar schemes of their own. This is a signal of potential flexibility. Different sides should seize the opportunity, continue negotiations under mediation by the International Civil Aviation Organization, and push for the principle of "common but differentiated responsibility" over the control of carbon emissions.
In mid-May, the EU gave India and China a month to comply with the airline carbon emissions fee system, or face penalties for flights into and out of the EU region. India in response said it may stop European carriers from flying into the country if the EU bans airlines from India.
But I think a scenario like this is unlikely to happen because banning flights from China and India would be catastrophic for the EU, which continues to reel from its debt crisis.
Close trade ties with emerging economies are vital for the recovery of the EU economy. A decision to ban flights from China and India will definitely meet resistance and pressure from various industries and sectors.
Mutual threats between India and the EU to ban flights and impose sanctions are mostly means used by the parties involved to fight for their interests.
Although I believe a compromise can be reached in the end, I suggest Chinese airlines brace themselves for unexpected contingencies. They need to improve their understanding of the related rules and regulations of other nations.
The civil aviation associations and authorities in China should also step up their efforts to coordinate between Chinese airlines and foreign governments in order to reach an early framework agreement.
