U.S. Aviation Groups Seek U.N. Intervention on EU Carbon Tax

Posted September 24, 2012 at 12:00am

A coalition of 19 mostly aviation-focused industry groups wants the White House to ask the United Nations’ civil aviation board to intervene against a European Union-imposed tax on carbon emissions. The airlines — and many U.S. lawmakers — say the tax oversteps the governments’ scope of power.

They’re specifically asking that President Obama begin the process of filing a complaint under Article 84 of the Chicago Convention, the circa-1944 agreement that created the Montreal-based International Civil Aviation Organization. A detachment of the United Nations, ICAO is responsible for setting and enforcing international standards for the aviation industry and adjudicating disputes between nations over related issues.

ICAO has been viewed as the most viable venue for a solution to international ire over the EU’s so-called Emissions Trading Scheme.

Under the ETS, EU regulators required any airline flying to, from or over Europe to record all carbon-burning activities. Such activities will then be assessed with a tax beginning in 2013, as part of a larger cap-and-trade system intended to reduce emissions across a variety of industries.

The U.S.-based aviation coalition includes lobbying heavyweights such as Airlines for America, the Aircraft Owners and Pilots Association and the Air Line Pilots Association, a well-connected labor group. In their letter, they requested Obama initiate an Article 84 complaint that would set in motion the process for ICAO to work out a solution between the EU and the countries opposing its plan. Aside from the United States, a number of the world’s large economic powerhouses have voiced opposition, including China, India and Brazil.

“If this EU breach of U.S. sovereignty — the imposition of an EU tax on U.S. airlines, aircraft operators and citizens while on the ground in the United States, over our airspaces and international waters — goes unanswered, it almost certainly will result in other such schemes affecting a variety of sectors of the U.S. economy,” the coalition wrote. “In addition, the EU ETS will likely lead to job losses in the aviation, manufacturing and travel industries, which is undesirable under any circumstances, but especially in this time of economic uncertainty.”

Earlier this year, Raymond Benjamin, ICAO’s secretary general, told an audience at the International Aviation Club in Washington that while his organization would be involved in bringing international airline interests together to reach a consensus solution on curbing aviation-related emissions, he would prefer Article 84’s provisions not be evoked.

But non-EU aviation interests are nervous that ICAO won’t act before the financial ramifications of the emissions program begin roiling corporate balance sheets in 2013. Though ICAO’s board has said it wants to set international emissions standards, its next scheduled meeting where it could address the issue isn’t until October 2013, nearly a year after the tax kicks in — leaving nations to seek their own solutions.

The House has passed a bill (HR 2594) introduced by Transportation and Infrastructure Chairman John L. Mica, R-Fla., that would bar U.S. airlines from participating in the program. Mica and other House Republicans have put pressure on the Senate to move a companion measure (S 1956) advanced in late July by that chamber’s Commerce, Science and Transportation Committee.

An amendment introduced by Chip Cravaack, R-Minn., a former Northwest Airlines pilot, was adopted by the House in its fiscal 2013 Transportation-HUD appropriations bill (HR 5972). That provision would bar the use of federal funds to comply with the EU law.