Why Europe’s climate program for airlines is not a tax
US airlines are stepping up their efforts to mischaracterize and undermine the ETS by calling it a “tax” instead of what it really is – a market-based cap on pollution that lets them find the best and cheapest way to reduce emissions. The Environmental Defense Fund says this is the same tactic some in industry used to mischaracterize climate change legislation in the US during the last Congress, and they’re doing it again to undermine Europe’s efforts. The aviation sector today emits about as much climate pollution as all of the UK and it is projected to quadruple by 2050. There will be a cost to reducing those emissions. But just because something has a cost, that does not make it a tax. EU law also gives airlines very broad flexibility to decide how to meet their caps. The ETS is a cap, not a tax.
By Annie Petsonk, International Counsel, and Adam Peltz, Legal Fellow
As the European Union gets closer to implementing a law to control greenhouse gas emissions from aviation, U.S. airlines are stepping up their efforts to mischaracterize and undermine the program by calling it a “tax” instead of what it really is – a market-based cap on pollution that lets them find the best and cheapest way to reduce emissions.
Adding “winglets” and other structural modifications to planes can improve flight efficiency and help airlines comply with Europe’s law to reduce emissions from the rapidly growing aviation sector. (Thanks and photo credit to Flickr user Bow’s Photography.)
It’s no surprise. It’s the same tactic some in industry used to mischaracterize climate change legislation in the U.S. during the last Congress, and they’re doing it again to undermine Europe’s efforts.
The aviation sector today emits about as much climate pollution as all of the United Kingdom, and that amount is projected to quadruple by 2050. There will be a cost to reducing those emissions. But just because something has a cost, that does not make it a tax.
- The EU law puts a quantity limit, or cap, on the total amount of climate pollution of all flights landing at or taking off from EU airports. Every company whose planes land at or take off from airports in Europe has to ensure that at the end of each year, the amount of pollution of its planes is less than the amount of its cap. It’s that simple.
- The EU could have slapped a tax on air travel in order to drive up the price and therefore reduce demand for air travel as a means of cutting down aviation pollution. But this law doesn’t do that.
- The EU could have required the airlines to install particular pollution control technologies. But the law doesn’t do that either.
Importantly, the EU law also gives airlines very broad flexibility to decide how to meet their caps. Airlines have wide latitude to choose among many competing strategies, and the competition among the strategies to deliver the most cost-effective emissions reductions help drive down the costs of all of them.
To meet their caps, airlines can make practical changes in their operations, such as:
- Using gradual “continuous ascent” and “continuous descent”, which saves a lot of fuel, instead of today’s steep, fuel-guzzling climb-ups and climb-downs.
- Using climate-friendlier fuels like sustainably produced biofuels.
- Putting modern, high-efficiency engines on existing planes.
- Adding “winglets” and other structural modifications to planes to improve flight efficiency.
- Buying or leasing new, more fuel-efficient planes.
- Purchasing pollution credits from a wide array of projects in different countries that reduce emissions outside the aviation sector, or purchasing emissions allowances from the EU.
Why do the airlines want the EU law called a tax? Because they don’t like the law, and they want to argue that they shouldn’t be subject to more taxes. It’s inaccurate and wrong for the airlines to label the program as a tax on aviation emissions.
The EU chose a cap, rather than a tax, as the most efficient and cost-effective way to reduce aviation emissions. Don’t let the airlines fool you: the EU Aviation Directive is a cap, not a tax.