Cap and Trade: EU vs the US.

Recently (within the last 6 years), the European Union has passed legislation that puts a 'Cap and Trade' system in place to help reduce carbon emissions and makes for a better atmosphere.  Essentially, companies have to purchase 'tokens' based on the amount of greenhouse gasses they produce, and the funds are used to develop technologies that are more environmentally friendly.  This sounds great, on paper.  They have introduced legislation that adds onto that the emissions given off by aircraft, and thus the airlines in the EU also now have to abide by that program.  This legislation is supposed to go into effect as of 2012.  

There's one little problem with the legislation as it stands, however:  They are forcing US based carriers to pay for the entirety of a flight that goes into their sovereignty as a destination.  Essentially, if a flight starts in Los Angeles, and flies to Frankfurt, the carrier would have to pay for the entire flight to Frankfurt, including the portion over foreign airspace and US airspace, in essence paying a 'tax' to the EU over US property.  That doesn't make any sense. If this were to stand as is, US carriers would have to pay billions in revenue on a yearly basis to the EU Emissions Trading System.  This is money out of the airlines pockets, directly into the EU pockets.  It would make more sense if the system was designed to reinvest directly into aviation for technologies that burn fuel more efficiently, but that is not the case.  This is basically the EU forcing their policies and beliefs on a different sovereignty.  

Honestly, it's a little scary.  I'm not going to argue that their intentions aren't good.   A simple read through the aviation portion of the EU ETS site tells me they are doing this with the intention of doing the right thing, building it as a model for other countries.  Their method, however, is wrong.  What gives them the right to impose their will on the US?  Nothing.

The overall cost to the airlines will be huge.  The Airlines will likely find workarounds to game the system anyway, which would most likely cause more emissions than before.  A good example is the fact that the US carrier may just land somewhere in Turkey, and then take the flight into their EU destination, avoiding a heft cost.  It was found that about 9% of an overseas trips would actually be within EU airspace, which means that the carrier should only have to pay for 9% of that flight.  Instead, the EU is forcing payment for the entire flight.

As it is, the US Congress has created a bill, HR 2594, that prohibits any US based carrier to pay any fees to the EU in their cap and trade scheme.  The bill essentially tell the EU to bugger off.  I agree with this bill.  The only problem is where does that leave the US carrier?  Will they have to cancel overseas business to the EU? Will they have to find longer routes to avoid EU airspace?  Only time will tell what's going to happen, but rest assured, it's going to happen soon.  We only have 2.5 months left in this year.  I, for one, will be keeping a very close eye on this situation.