Washington, DC – The United States should not and will not participate in an illegal, ineffective European Union Emissions Trading Scheme, in which U.S. air carriers and other operators would be forced to pay taxes imposed by the EU, said Congressional leaders and witnesses at a hearing on Capitol Hill today.
“This appropriately named EU scheme is an arbitrary and unjust violation of international law that disadvantages U.S. air carriers and kills U.S. aviation jobs,” House Transportation and Infrastructure Committee Chairman John L. Mica (R-FL). “The message from Congress and the U.S. government is loud and clear: the United States will not participate in this ill-advised and illegal EU program.”
“The European Union is not sovereign over the United States or the rest of the world, and has no right to levy taxes outside of the EU,” said U.S. Rep. Tom Petri (R-WI), Chairman of the Aviation Subcommittee, which held today’s hearing. “Since the EU has shown no interest in working with the international community to address their concerns and objections and to seek a global approach to civil aviation emissions, we believe that the United States should not participate in their unilateral and questionable ETS program. We believe a better approach is to work with the international civil aviation community through the U.N. International Civil Aviation Organization.
Last week, Mica and Petri were joined by Committee Democrat leaders and other Members of Congress in introducing H.R. 2594, the “European Union Emissions Trading Scheme Prohibition Act of 2011” (click here for text). The bipartisan legislation directs the Secretary of Transportation to prohibit U.S. aircraft operators from participating in the EU’s Emissions Trading Scheme (ETS). The bill also instructs U.S. officials to negotiate or take any action necessary to ensure U.S. aviation operators are not penalized by any unilaterally imposed EU emissions trading scheme.
Under the EU Emissions Trading Scheme, all airlines would be forced to participate and pay taxes to the EU beginning on January 1, 2012 despite the objections of the United States Government. Under the scheme, there is no requirement that generated revenue would even be put toward researching and developing technology to improve emissions.
Mica announced that the Committee intends to move H.R. 2594 as soon as possible to make clear to the EU and the international community that the United States does not intend to participate in a unilaterally imposed process.
U.S. Department of State Deputy Assistant Secretary for Transportation Affairs Krishna R. Urs testified today that, “… on June 22 in Oslo, Norway, we met with EU officials and delivered this Administration’s formal objections to the EU’s unilateral inclusion of U.S. air carriers in the ETS. We objected to the unilateral imposition of the EU’s ETS on U.S. air carriers on both legal and policy grounds.”
Urs continued that “our concerns about the lack of transparency surrounding the EU's plans to determine ‘equivalency’ of other countries’ measures and the potential for discrimination in that process were only heightened. We will continue to strongly oppose the unilateral application of the EU’s ETS to our airlines….”
Nancy Young, Vice President of Environmental Affairs with the Air Transport Association, and Captain Lee Moak, President of the Airline Pilots Association International, both testified about the detrimental impacts on U.S. aviation jobs of participating in the scheme.
Young testified, “…the U.S. airlines will be required to pay into EU coffers more than $3.1 billion between 2012 and year-end 2020. That outlay could support more than 39,200 U.S. airline jobs. Now consider that the costs could be twice as high if the cost of carbon allowances in Europe returns to where it was within the past couple years. That cost outlay would represent over 78,500 U.S. airline jobs.”
“The EU ETS is no more than a thinly disguised tax on commercial aviation, the proceeds of which may well accrue to the treasuries of foreign governments instead of being used in a meaningful way to reduce GHG emissions,” said Moak. “The EU ETS taxes will ultimately cost more American jobs at a time when unemployment stands at 9.2% and job creation is everyone’s goal. The airlines simply cannot afford any new taxes and we must do all that we can to keep from losing any more jobs in this industry.”
Young also addressed the U.S. aviation industry’s ongoing efforts to reduce emissions. “For the past several decades, commercial airlines have dramatically improved fuel and GHG efficiency by investing billions in fuel-saving aircraft and engines, innovative technologies like winglets (which improve aerodynamics) and cutting-edge route-optimization software,” said Young. “For example, between 1978 and 2009, the U.S. airline industry improved its fuel efficiency by 110 percent, resulting in 2.9 billion metric tons of carbon dioxide (CO2) savings – equivalent to taking 19 million cars off the road in each of those years. Further, data from the Bureau of Transportation Statistics confirms that U.S. airlines burned almost 14 percent less fuel in 2009 than they did in 2000, resulting in a 14 percent reduction in CO2 emissions, even though they carried 7.3 percent more passengers and cargo on a revenue-ton-mile basis.”
More information on this morning’s hearing, including witness testimony, can be found here.
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