With the publication of benchmark values to be used for allocating CO2 emission allowances to more than 900 aircraft operators worldwide, the European Commission has made the aviation sector’s inclusion in the EU’s emissions trading system (EU ETS) official as of Jan. 1, 2012.
From 2013 to 2020, an airline will receive (pdf) 0.6422 allowances per 1,000 tonne-kilometres, while in 2012 it will receive 0.6797 allowances.
About 1.6 billion metric tons of these “free” carbon allowances will be handed out to airlines, which works out to about $27 billion over nine years from 2012 to 2020.
“At current market prices these free allowances represent more than €20 billion over the decade,” said climate action commissioner Connie Hedegaard. “With these potential revenues, airlines could invest in modernizing their fleets, improving fuel efficiency and using non-fossil aviation fuel.”
European Commission director-general for climate Jos Delbeke went one step further and directly suggested that airlines should fund the purchase of new planes by passing the full cost of the carbon tax on to customers, while the airlines can skip paying $27 billion of the tax.
There’s something deeply flawed with an argument where a cut in a new tax yet to be implemented is considered extra revenue. But let’s skip over that for now because the aviation sector isn’t buying it anyway.
“IATA is not opposed to emissions trading,” said IATA Director General and CEO Tony Tyler. “We support the concept as a possible mechanism for the fourth pillar of our environment strategy. But the EU’s unilateral and regional approach to ETS could not be more misguided.”
U.S. carriers have taken the European Commission to court over its inclusion in EU ETS and the U.S. government is considering legislation to prohibit its carriers from participating.
But the EU isn’t just handing out memos and rulings. It coordinated the announcement with the leak of a report prepared by the World Bank and IMF that proposes global carbon taxes on aviation and ship fuels in developed economies.
The World Bank/IMF report suggests a global $25 per ton of CO2 charge on aviation and maritime bunker fuels, which would work out to $250 billion in taxes by 2020.
Also timed to coincide with the aviation ETS announcement was a report by the European Commission’s Joint Research Center, which says that global CO2 emissions jumped 45 percent from 1990 to 2010.
Photo – said&done