Having the US and China on the same side of a trade dispute is a rare sight. But the decision by the European Union to extend to the aviation industry its emissions trading scheme has brought about an alliance of rivals.
The scheme obliges airlines to buy tradeable permits to emit carbon dioxide for any flight in or out of Europe. Such permits will be proportional to the entire length of any flight, not just the part of it that is in EU airspace. Since the Chinese government believes that Europe is trying to levy taxes beyond its territorial limits, Beijing has barred its country’s airlines from complying. The US House of Representatives has expressed a similar view.
There are many good things about the EU scheme. While aviation only accounts for 2 per cent of global greenhouse emissions, these are expected to grow by 3-4 per cent per year. And since the EU has imposed similar caps on other industries, it is reasonable that it does so on a sector whose importance, in terms of emissions, is ever increasing.