Sen. Kerry Blames U.S. for Dispute Over E.U. Airline Carbon Tax: ‘We Dragged Our Feet’

June 7, 2012 - 4:39 AM

John Kerry

Senator John Kerry, D-Mass., delivers a speech during a side event at the U.N. climate conference in Copenhagen on Wednesday, Dec. 16, 2009. (AP Photo)

(CNSNews.com) – As Senate Republicans and Democrats Wednesday slammed a European Union directive charging all airlines that enter European airspace for carbon emissions, Sen. John Kerry (D-Mass.) blamed the dispute over the cap-and-trade system on America’s failure to support global climate change initiatives.

“If this wasn’t so sad you might laugh at what’s going on here, because it really represents a failure over 20-plus years of people to be serious about an issue,” Kerry said during a Senate Commerce, Science and Transportation Committee hearing on the European emissions trading scheme (ETS).

“The truth is we dragged our feet. The United States of America has been one of the principal foot-draggers in this entire [emissions control] effort.”

While Kerry said he disagreed with the way the Europeans had proceeded, he expressed understanding of their action, and of Europeans’ “frustration and skepticism” in the face of criticism.

The hearing saw senators from both parties and airline industry representatives sharply criticize the ETS’s application to aviation, a move opponents say undermines national sovereignty and violates international law.

The directive, which took effect last January 1, makes all carriers flying to, from or within the E.U. liable for charges for emitting carbon dioxide. The charge applies to the entire flight, so in the case of a direct flight from Miami to Madrid the entire distance of some 4,400 miles would be used in the calculation, not just the last several hundred miles of European airspace.

The U.S. is among dozens of countries objecting to the directive. While some airlines in China and India are refusing to comply, U.S. carriers are – in the words of committee member Sen. Johnny Isakson (R-Ga.) – “complying but complaining.”

‘Coming down the pike’

Kerry took issue with talk about different jurisdictions’ airspace.

“I laugh at this discussion of whose airspace is whose,” he said. “The stuff that goes up there goes to everybody’s airspace. It doesn’t stay in the United States. We get China’s fumes, we get Indiana’s and Ohio’s – in Massachusetts.”

“You think these fights are tough?” he asked. “Wait until we get into the fights on water, and fights on nutrition, and fights on global refugees, and all the other things that are coming down the pike, because we are failing to step up and be responsible with respect to global emissions. And they belong to all of us – not anybody’s single airspace.”

In his full written statement, Kerry pointed back to the 1992 Earth Summit in Rio, which laid the early groundwork for the Kyoto Protocol.

“Twenty years ago this summer, the United States began leading an international effort to forge a global agreement on climate change that would be fair to all countries,” he said.

“The story of why it stalled or how we dragged our feet and lost our moral authority doesn’t need retelling,” Kerry continued. “But suffice it to say, other countries moved ahead on their own.  Rather than shape what they did within the confines of a global agreement, frankly, over many years, because of the gridlock of our own politics at home, we sent the message that every country should do whatever they deemed fit to reduce emissions.

“Well, that’s what the E.U. did – and now we have great concerns about some of it and how it could impact us,” Kerry said. “It didn’t have to be this way.”

Kerry was dubious about a bipartisan bill before the committee requiring the Transportation Secretary to prohibit U.S. carriers from participating in any ETS unilaterally set up by the E.U.

The measure was introduced by Sens. John Thune (R-S.D.) and Claire McCaskill (D-Mo.) last December, two months after the U.S. House passed a similar bill by voice vote.

Citing calls to work on the dispute through the International Civil Aviation Organization (ICAO) or other negotiated alternatives, Kerry told the committee “there are many options to explore besides passing a new law that simply threatens unilateral prohibitions on flights to Europe, or establishes new authorities for the secretary.”

Transportation Secretary Ray LaHood told the panel the Obama administration opposes the ETS – which he called “a lousy policy” – on “both legal and policy grounds,” but he was also questioned on the administration’s stance on the Thune-McCaskill bill.

“You’ve said clearly you think our legislation is important. I think you’ve said clearly you oppose this policy,” McCaskill told La Hood. “It would be very helpful if the administration could let us know why they cannot come out in favor of our legislation.”

‘Not a tax’

The E.U.’s Executive Commission says aviation accounts for three percent of total emissions of greenhouse gases blamed for “global warming.”

Under its directive, all airlines using European airports are allocated tradable allowances, covering a certain amount of carbon dioxide emitted each year, based on historical data. Any emissions beyond the cap must be paid for, and airlines may also trade permits among themselves.

E.U. climate action official Jos Delbeke told the Senate panel that while the legislation could be modified in the event of a global agreement, there was “no prospect” of it being suspended.

He dispute that the scheme amounted to a tax or a charge.

“It is fundamentally different from a tax or a charge, because airlines can meet their obligations by remaining within their caps or by purchasing additional allowances, either from government or on the open carbon market,” he stated.

The International Air Transport Association (IATA), which represents some 230 airlines accounting for 93 percent of scheduled international air traffic, opposes the ETS and was a party to a legal challenge, led by airlines in the U.S., that ended up before the European Court of Justice (ECJ) last year.

IATA estimates that the ETS will cost the airline industry overall $1.16 billion in 2012, climbing to $3.63 billion in 2020.

While airlines have warned of inevitable price rises, a study commissioned by the aviation industry in 2007 found that airlines would themselves have to absorb a large proportion of the additional costs. It estimated that complying with the ETS would cost carriers more than $60 billion between 2011 and 2022.

The ECJ shortly before Christmas ruled against the legal challenge, paving the way for the ETS to begin applying to aviation from January 1.