India protests EU’s carbon tax on aviation news

Date added: 1 August, 2011

Much after China raised a hue and cry over the EU ETS, India has now come out
shrieking and complaining. India’s minster for environment lodged a formal complaint
with the EU last week over the proposed tax, dubbing it an ”unfair” trade practice. 
It is estimated the tax will cost India a tleast $1 billion a year and along
with Chinese and American airlines will help Europe rake in $10 billion a year.
India said it would approach the WTO if it isn’t withdrawn.

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When the tax becomes applicable next year in January, airfare to London will
cost an additional €6 (Rs380), thanks to the carbon tax levied by the European
Union (EU) on the aviation sector.  Industry experts estimate the tax will cost
India atleast $1 billion (Rs4,500 crore) a year and along with Chinese and American
airlines will help Europe rake in $10 billion a year.

“We believe the European carbon tax is just the start of a new global tax regime
to adversely hit businesses of emerging economies such as India and Chin   We
will have no option other than to approach the World Trade Organisation (WTO)
if it isn’t withdrawn,” a senior government functionary said.

In her protest note minister Natarajan urged Europe to withdraw the tax till
consensus emerged on the issue at the United Nations Framework Convention on Climate
Change (UNFCCC), a body of 194 nations.

Under its Emission Trade Scheme, the EU will impose a penalty for failing to
maintain annual carbon emissions within 10,000 tonnes a year. The decision was
taken after the EU found in February that the aviation sector was spewing 20 per
cent more carbon dioxide into the environment than previously known.

The EU itself is the world’s third largest emitter of carbon dioxide after the
US and China.

According to government officials, the carbon tax issue was discussed at a meeting
called by the cabinet secretary on Friday, where officials from the ministries
of civil aviation, commerce and environment participated. Apparently it was decided
to seek legal opinion on ways and means to approach the WTO.

Government officials said by levying carbon tax, developing countries would end
up paying rich nations.

Officials indicated India was likely to raise the issue at the next meeting of
BASIC countries – comprising India, China, Brazil and South Africa – in August
to garner support against the move.

http://www.domain-b.com/environment/20110730_carbon_tax_oneView.html

Posted: Monday, August 1st, 2011. Filed in General News.