January 4th, 2012
08:57 PM GMT
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London (CNN) – The decision by China’s airlines to snub Europe’s carbon emissions tax opens a new front in the battle of European Union versus the Rest of the World.

From this year, airlines which use EU airports must pay a carbon tax, regardless of the carrier’s nationality. They pay for the emissions of the whole flight - not just the bit in European air space.

Carbon credits are issued for up to 80% of emissions, meaning airlines are left with hefty bills to cover the balance.

What has enraged the Americans, Chinese, Latin Americans - in fact just about everyone - is that the EU imposed a blanket scheme.

The industry believes that there should be a global solution - backed by the UN aviation body ICAO - not this unilateral go-it-alone policy.

Now China’s airline industry group has stuck a finger up at the EU and said its airlines won’t pay - and one can assume they would not have taken this step without approval from Beijing.

U.S. carriers say they will obey the law while their government is talking of taking “appropriate action,” possibly introducing a tax on EU carriers to redress the balance.

The Europeans were always worried about the U.S. response, but now it seems it’s the Chinese who could cause problems.

The first carbon credits don’t need to be paid for until the first quarter of next year, so there is time for an agreement to be reached. But don’t bank on it.

Worst of all, there is little airlines can do to reduce their carbon footprint quickly, because so many variables are outside their control.

More fuel efficient engines and aircraft are slowly being introduced - but they are expensive. And, in case regulators hadn’t noticed, the aviation industry hasn’t made decent multi-year profits in decades.

Air traffic control in Europe is a hodgepodge cluster of delays, with little chance of improvement. Long lead times, huge investments and complex regulation are the hallmark of this industry.

As for the EU’s scheme – well, it takes real skill to annoy everyone at once.

Even airlines such as British Airways, which support “cap and trade” as a way to reduce emissions, took offense at the Europeans effectively declaring: “Our way or the highway.”

This scheme has taken years to put in place, has required thousands of hours of monitoring and reporting - and who knows how much it is costing the airlines to administer.

Cutting carbon emissions is important and a start has to be made. But you don’t do it by angering your trading partners, making enemies of allies and ultimately destroying your own cause.



soundoff (40 Responses)
  1. robert miller

    A must see for where this is all headed. "Trading on Thin Air" the new documentary saw it on iTunes tradingonthinair.com
    If you think this will ultimately be good for the environment – think again.

    January 4, 2012 at 9:12 pm |
  2. Keerview

    'Plan your dive – dive you plan' is standard education for certified divers. You shouldn't dive by yourself and have a buddy diver assert a safe dive. I think that Brussels should make underwater certification mandatory for EU parliament members, so they can avoid taking a 'bad dive'. China has expert divers so it appears.

    January 4, 2012 at 9:39 pm |
  3. Adam

    It's cute really. Europe's desperate last cries of "look at me! pay attention to me! I am still relevant!" They're like bully from elementary school who now works digging ditches while the kids they once bullied grew up and got better educations and jobs.

    January 4, 2012 at 9:55 pm |
  4. lionofnarnia

    China is evil. Its newsworthy that their jets.arent

    January 4, 2012 at 10:36 pm |
  5. octopus

    just another prove that EU, as well as Euro, is an artificial joke. It's time to end this comedy.

    January 4, 2012 at 11:07 pm |
  6. Fred Jansohn

    What a great way of cutting off your nose to spite your face. What a great knee jerk reaction to a problem whose root cause has really nothing to do with carbon emission and everything to do with a declining EU economy, a catastrophic lack of political or economic foresight, mismanagment and the "hodgepodge cluster of delays" within Europena air traffic control. What is it they say? Get your own house in order before pointing a finger at others.

    January 4, 2012 at 11:10 pm |
  7. Dennis

    Seems only the Chinese have the balls to stand up to these EU idiots. IT is the same reason Canada pulled out of the phony Kyoto mishmash. Now if we could only get our province (BC) to kill the phony carbon tax and give us back the money they stole.

    January 4, 2012 at 11:18 pm |
  8. Tad Pole

    I read that the carbon tax amounts to something like $3 for domestic flights (in an EU country) and like $18 for transatlantic flights. To me, that doesn't seem like such a hefty fee, especially when you consider how the US has imposed all those security fees on every flight that enters the US. I would think that legally, any country (or in this case group of countries) can make whatever laws they want regarding which fees should be levied.

    January 4, 2012 at 11:30 pm |
  9. Enrico

    This move will probably shock most of you Americans since, just like the Chinese, you guys don't give a damn about pollution!

    January 4, 2012 at 11:48 pm |
  10. KBNJ

    I just don't get "carbon taxes", etc. Tax the fuel. Burn less, pay less. Pretty simple.

    January 4, 2012 at 11:54 pm |
  11. Peter

    Right they are. The only way to make obese-glutton Joe-the-Public do something is to hit its wallet. THEN they pay attention.

    You go, Europe!

    January 5, 2012 at 12:06 am |
  12. Epsilon

    I'm glad Norway isnt part of the EU^^

    January 5, 2012 at 12:40 am |
  13. Lerxt

    This just shows 3 things, 1/ the EU is much more progressive than any other part of the world when it come to the environment, 2/ the Chinese simply don't know how to behave in the world (after 4000 years and they still don't?) and 3/ the EU doesn't understand how to do this fairly.

    January 5, 2012 at 12:56 am |
  14. dupont2305

    stupid EU. Last Cry before its death.

    January 5, 2012 at 1:02 am |
  15. peterr54

    This has nothing to do with saving the environment. It's about generating revenue for bureaucrats who are fully compensated themselves for their "business class" air travel by the tax payers. The tax could better be imposed directly on passengers with frequent flyer status and who are unbelievably rewarded for achieving a silver, gold and platinum air miles tally.

    Such misplaced rewards systems are sending out the wrong message which should be ......fly LESS frequently.
    There is absolutely no justification for all this jet-setting around the globe by business men executives and government authorities. We have video conferencing, mobile and Skype conference call application at our laptop disposal should face-to-face meetings be necessary, which often they are not. Why does Sarkozy have to fly to Berlin for a 30 minute chit chat with Merkel and then the courtesy is reciprocated the same week? Send her an email for God's sake! We will remain silent on the need for Airforce One being at The President's disposal 24/7.

    Why the full national Olympic Committees, all 400 of them, who competed for holding the olympics have to travel to Zurich several times for presenting their Bid Books and then again when the voting was announced, is just mind boggling.

    If we believe that the time = money credo governs our lifestyle, then why should a flight from London to Dubai take just 6 hours while the in-check, transit, baggage collection, security searches and immigration control procedures add 2 to 3 hours each way onto this? Can I get compensation from the airlines and bureaucracy for wasting my time? When i take a train, I go to the station, buy a ticket and step on the train.

    No, air travel has become ritualistic with unnecessary "duty and tax free" shopping arcades, airline waiting lounges, airport hotels and a whole plethora of "services" placed at our disposal and which I personally never use. These mammoth airports have become unsustainable and so expensive for society.

    And what environmentally friendlier alternatives are available for avoiding excessive air travel if?
    Taking the orient express from Paris to Istanbul takes 22 hours travel time and uses electric power generated by nuclear, oil and coal fired power plants.

    January 5, 2012 at 1:38 am |
  16. Zoosphere

    I'm against opposing the EU airline carbon emission tax strongly. It's their decision and other countries should respect their decision and tone down. If the opposing opinions of the EU airline tax are accepted, the national sovereignty of many countries will be endangered. The airline industries have been relatively untouched regardless of the recent social move of the Climate Change and they need to pay and to be improved immediately, that's only their choice to survive (in my opinion their attitudes are delayed and not very modern). I also know it is difficult field to be changed, but it needs to be changed to keep up with the society and enjoying their profits while polluting our air is completely nonsense.

    January 5, 2012 at 2:15 am |
  17. Jose

    Global warming – fake.
    Carbon Tax – fake.
    EU pretending they care for the environment – true.
    China will now tell the EU to kiss where the sun don't shine.

    January 5, 2012 at 2:37 am |
  18. I3VI5

    I don't get why US and China are complaining?!

    The carbon tax is going to be paid by every European airline too. Which means that the foreign airlines will have lower costs if they didn't have that tax. This is not like the EU is discriminating against foreign airlines and favoring domestic ones.
    The foreign airlines should stop complaining and play by the European Law when using European airports!

    January 5, 2012 at 8:26 am |
  19. David

    Its simple. With this one move the EU has found a way to placate the Greens and impose a worldwide tax. Only the self absorbed europeans would find something this confronting appealing. Carriers travelling from asia will pay a fortune for those 14 hour legs, and thats the whole idea.

    January 5, 2012 at 10:37 am |
  20. Diego

    LOL @ Americans enraged by unilateral, go-it-alone policies.

    January 5, 2012 at 10:49 am |
  21. Maerten

    I am very happy to China sending Brussels Barroso and Rumpuy Al capone team to hell. They are non elected people gangsters that try hard to take fee on anything they want.There is hundred ways for China to by pass the tax and I am sure they must laugh about Europe leaders stupidity.

    January 5, 2012 at 11:47 am |
  22. Beefburger

    Considering that the Globull Warming just had their #1 "evidence" shot down(disappearing bees, see; zombie bees) and winters in the mid-west are hitting -50, when can we stop Uncle Al's monopoly on "carbon trading"? I wonder how much the Carbon Czar billionaire pumps CO2 in his private jet for all of his meetings?

    January 5, 2012 at 11:58 am |
  23. Henk

    Europe has waited 14 years for the US, China and the rest to finally Join. Now Europe says enough is enough and goes at it alone and the world is crying like angry babies. This tax is the same for any European airline company. So don`t cry about it. China and the US will destroy the future of our children with their massive monster pollution. Scientists have warned time and time again about the massive implications this is going to have if we don`t start to reverse it. The time is now.

    January 5, 2012 at 11:58 am |
  24. ana

    well, the brilliant article Sir Richard. An one more problem for the such efficient EU. Maybe they need another Brussels or something like that or they simply must sing as China has conducted what seems much more obviously!

    January 5, 2012 at 3:35 pm |
  25. Isaac

    What is the US doing to protect the climate? Why aren't you taking bold action at home? Instead of focusing on what the EU shouldn't do, you should focus on what YOU should do. Here, in Europe, we have passed a law to do business in Europe. And as Europeans respect EU law, we expect all to respect our environmental law.

    January 5, 2012 at 8:57 pm |
  26. Mark

    The sad fact is no other bloc seems to understand the emissions airlines are generating, not only are they causing massive amounts of NOX and CO2 but they are delivering it to the place where it has the most effect... 40000 feet. The EU is actind unilaterally because no-one else has the stomach can do it. It's a little petty to tax EU carriers to fly to the US or China as all airlines pay the same ie there is no competative edge in being based in the EU

    January 5, 2012 at 11:49 pm |
  27. Ed

    I'm not particularly kin on anything coming from China but I do have to admit I love the way they decided to rub their fingers on the Europeans on this issue. Bravo China! The rest of the world should follow suit who on earth these Europeans think their are!!! Canbon tax for using their airports, why not introduce a similar tax, I'd even say double it, for every single european airline?

    January 6, 2012 at 1:39 am |
  28. Donnachadh McCarthy

    What a badly written article. No actual figures to back up the biased attack. (The actual impact on flight costs is minimal. No figures to demonstrate why action is needed – flight emissions per family of 4 for long-haul flights regularly exced all their annual household emissions. No balanced reporting as to why the EU had to proceed as if they waited for US and China to agree to a global system, one would never be implemented. No mention that the 2 countries howling about having a price put on their environmental destructiveness are by far the two largest co2 emitters. Is this the journalism for and by the 1%?

    January 6, 2012 at 9:32 am |
  29. Wayne

    I believe there are only two major issues:
    1. Will the tax reduce the number of flights, and thus the emissions?
    2. What does the EU propose to do with the money raised?
    As to (1), I don't believe the tax will be effective in reducing flights.
    As to (2), the EU has not demonstrated effective money management, so why give them even more to waste?

    January 8, 2012 at 4:24 am |
  30. ren

    the problem is the so called global solution keeps being pushed away because it does not suit china and usa.

    so in reality its not EU vs the world , its the planet vs usa , india, russia, china. Eu just happens to be the only one sensible about doing the right thing above profit.
    At least while everyone delays talks that wont get anywhere because of the profits involved. Eu will force such things.
    since things arent getting done the right way theyll be done the hard way, in the end its the right thing for everyone.

    the failures of the last few environmental agreements is a good sign people should start pointing fingers and holding those responsible for only representing corporations and not people affected by the polution.

    January 8, 2012 at 5:24 am |
  31. dovahkiin

    Of course Canada pulled out of The Kyoto Protocol, otherwise it would be obligated to pay a fine of over 14 billion dollars for not meeting its carbon reduction goal. To be honest, very very few countries could meet that goal.

    January 8, 2012 at 5:40 am |
  32. Peo

    To QUEST: Please give us your solution to how a fair CO2 tax can be realized. To CRITICS: At least EU is trying to do something, I respect them for taking responsibility. We have all seen how willing China and US are during UNs Climate Conferences to find that solution... And please everyone, CO2 reducing solutions have been on the table for a very long time without action. So do not pretend being surprised now. Doing nothing is NOT the solution.

    January 8, 2012 at 5:49 am |
  33. Hugh Jass©

    If the tax somehow reduces CO2 emissions, then it is a good thing. Otherwise you are just charging airlines for their pollution and not fixing anything.

    January 8, 2012 at 6:56 am |
  34. Ivan

    A simple way to reduce CO2 is to stop breathing! I've been hearing these polutions thingy over and over again. Have human created something from different source other than from earth? Where's radioactive found ? Earth? Where's source of plastic found ? Earth ?

    Can i tax you because you breath more than others?

    January 8, 2012 at 7:13 am |
  35. Andicus

    Love Diego´s comment: "LOL @ Americans enraged by unilateral, go-it-alone policies."
    I also believe it´s time for action taking. I´m also curious on how they´ll use the collected money. ...how about investing it world wide on nuclear fussion research?

    January 8, 2012 at 11:18 am |
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  37. fred baum

    The Chinese won't pay? Can't they take the money from the 500 billion
    they steal every year from American and European companies ?
    After nearly twenty years of copyright and patent violations
    and the last 10 years of cybertheft, the Chinese have already stolen
    between 5 and 10 TRILLION dollars of American and European assets.
    (Amazing that the US has not considered simply cancelling their
    treasury bond obligations to the Chinese). With all that stolen booty,
    a manipulated currency, manipulated trade surplus,
    and protected domestic market, they can't afford to pay a
    few Euros of carbon tax ?? How petty can you get ?

    February 2, 2012 at 10:27 pm |
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