From: John Heilprin, Associated Press
Published December 1, 2006 12:00 AM

U.S. Opposes European Global Warming Cuts Scheme for Airliners

WASHINGTON — The Bush administration opposes European plans to require airlines to curb greenhouse gases on grounds it would unfairly disadvantage U.S. carriers.

"We are strongly opposed to the imposition of a tax. We think this will violate trade rules," James Connaughton, chairman of the White House Council on Environmental Quality, told a group of international reporters Thursday.

"It's also not a smart way to find your way to efficiency in the aviation (industry)," he said. "The aviation sector has already made dramatic progress in becoming more fuel efficient because they have to. It costs a lot of money to fly people around."

Connaughton said a better approach is to "come up with a partnership to ensure new approaches that are efficient, but also to relieve congestion that is in the airways. There are real restrictions between our markets and also with Asia that causes a tremendous extra consumption of fuel that's necessary."

Technically, the European Commission is not proposing a tax. Instead, it is writing rules to require that airlines trade carbon emissions. Given a choice, airlines told the commission they preferred a cap-and-trade scheme over a tax on carbon emissions.

To Connaughton, "It goes right to the customer, to the bottom line of what it costs to fly. Let's just call it what it is: It's a tax."

He did not elaborate on whether the Bush administration would complain to the Geneva-based World Trade Organization once the commission proposal is made public.

The EU's emissions trading program is intended to encourage industries from many sectors to cut greenhouse gases. It would set limits and allow for trading allocations of carbon dioxide emissions.

The European Union is required by the 1997 Kyoto Protocol on climate change to reduce its carbon emissions to 8 percent below 1990 levels by 2012. However, cars and airplanes, major sources of CO2 emissions linked to global warming, are not covered by the treaty.

The European Commission sees airlines emissions trading as a tool that could help Europe meet the Kyoto targets. By giving airlines a carbon allowance, companies that do not use the full amount can sell unused limits.

"You don't have a market if you don't have a shortage," the European Commission's top environment official, Mogens Peter Carl, said in October.

Source: Associated Press

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