EU emissions trading funds from airlines' hard-earned revenues should be used wisely and not squandered

EU emissions trading funds from airlines' hard-earned revenues should be used wisely and not squandered | ERA
Wed 18 Nov 2009 – In a few weeks time, environmental experts and politicians from nations worldwide will meet in Copenhagen. Their task is to try to reach agreement on a new treaty, to succeed the Kyoto Protocol, and to set new limits on gaseous emissions to help protect against climate change. As this December deadline approaches, the position of the EU and the European Commission (EC) has become increasingly clear. Europe is to stay in the vanguard of international action and associate legislation. However, asks Mike Ambrose of the European Regions Airline Association (right), is this quite as well-meaning as it first appears and where are the economic evaluations of such policies?
Europe is currently the only continent to have implemented a carbon trading scheme. In late September, the merits of this scheme were reportedly strongly attacked by the president of the industry and employers group, Business Europe. He described it as being the “most costly climate policy programme in the world”. It is not surprising therefore that he also wants other states to introduce similar schemes so that the “dangers to our [European] ability to compete internationally” are reduced.
What makes his remarks so significant is that many states do not share the EU’s views and, in the opinion of some experts, the prospect of world agreement on climate action equivalent in stringency to the EU’s is unlikely. Furthermore, existing EU policy is likely to increase cost burdens on taxpayers and on industry, especially air transport and shipping.
Many EU states are short of cash. Some will see carbon trading as a way of increasing much-needed state revenues. Most seem to recognize that the EU’s international ambitions to lead climate protection action can only be effective if the EU and other developed states send enormous annual donations to poorer and developing states to help them fund their own climate action programmes.
An EC paper has identified the dimension of these contributions as being around €15 billion ($22bn) per year (by 2020), to which air transport will have to provide a major share.
The paper explores in considerable detail the rationale for, and the scope of, the EU contribution. The paper says nothing whatsoever concerning proposed controls of the disbursement of these funds against associated climate change actions.
Faced with the prospect of funding of this magnitude, it is essential that the EU States and the EC act in the real world and not just on principle and idealism. It has to be accepted that many developing nations already have well-founded reputations for corruption and political misdemeanour. EU donations, no matter how well-intended, must not become a windfall source of unearned revenue to be secreted into offshore bank accounts by leaders of corrupt governments. Donations must be stringently monitored against defined and agreed climate action programmes.
EU air transport is already committed to emissions trading. EU funding climate protection projects in developing States should be from general taxation but, in any case, it must be assured that such funds are directly related to, and stringently and continuously monitored against, measurable climate improvements. In today’s harsh economic climate, simplistic idealism is not an appropriate justification.
Mike Ambrose is Director General of the European Regions Airline Association (ERA). This article also appears in the November 2009 edition of the ERA’s magazine Regional International.



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