The latest directive from the European Union (which just got approved by the highest court of the European Union) is that from January 2012, any flight landing or taking off from a European airport will have to buy, surrender allowances for emissions. Basically they have decided to cover emissions from air transport in their greenhouse emissions scheme. This decision while a positive one (since it will lower emissions and help to prevent climate change), does have its set of consequences.
When the EU emissions scheme was initially set up in the year 2003, it did not apply to the aviation industry. But now after the new directive, every airline of the world will be subjected to the emissions scheme. The European Union expects every airline which either lands in their territory or takes off from their territory to purchase emission allowances, once the airline emissions in a goes over the emission allowance, they will have to purchase additional allowances. In short they have decided to place a tax on the airlines of the world.
How does the EU Carbon Trade Plan for Airlines Affect You?
The extra amount which flight carriers will have to pay to land or take off from an airport in the European Union will simply be passed onto you i.e. any passenger travelling to or travelling from any airport in the EU will have to pay more to buy the ticket.
Currently the amount airlines will have to pay is 15% of the pollution allowances given to them. This figure is set to rise to 18% in the years 2012-2020. So if you are travelling to Europe, the ticket will cost an additional 50$-90$. The exact cost will depend on the airline since different airlines will pass on different amounts of the tax onto you. Either way you travel costs will increase by quite a bit.
How The EU Carbon Trade Affects the World?
The European Union has wanted laws to make air travel more environment friendly since 2003 and while this decision has been taken with the interests of the planet in mind it has its share of problems and consequences because it has been taken by the EU alone without any consideration or talks with other countries:
- Trade War: Basically till today the skies were considered open and no restriction was placed by any major country on the entry and departure of flights. But now since the EU has passed this law, other countries the world over are understandably angry. Thus China has planned to retaliate as has India and the United States is planning on taking “appropriate measures”. Many countries are also planning on taking countermeasures against the EU. If things escalate, it will turn into an all-out trade war with different countries placing different restrictions on their markets and lands. This will affect people everywhere and have other far reaching consequences.
- Profits: The profit margin of the airline industry is a mere 1.2% this year, because of this law the profits are further set to decrease to 0.8% next year. This may force many airlines to lower service to Europe and or size down their operations to allow them to remain profitable.
While the law is set to take effect from January 2012 and most airlines have agreed to the tax, this issue is far from over. Much debate will go into this topic and it will take some time still to find out how it ends.
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