It’s not fare

Chinese airlines protest new EU green regulation

It’s not fare

You’ll pay for that carbon

Beware the eco-babble of the eco-loonies is one warning from Michael O’Leary, the caustic chief executive of Ryanair, on the European Union’s Emissions Trading Scheme (ETS).

WiC isn’t quite sure how O’Leary’s admonition would translate into Mandarin. But it might be worth finding out, on signs that China’s own airline bosses are growing similarly frustrated with the provisions of the ETS, which come into effect in a little over eight months time.

From January 1 next year, all airlines flying into, out of and within Europe will become accountable for their carbon dioxide emissions. And that means from the minute they take off for a flight to or from Europe – even for miles flown well outside European airspace.

For example, a flight taking off from Guangzhou for Germany will have to “pay” for its emissions along the entirety of its route, and not just within EU borders.

The US airlines are already challenging the application of the rules to third countries’ airspace, and over the high seas, on sovereignty grounds. Given Chinese sensitivity on such matters, Beijing will be watching with considerable interest.

The top three carriers – Air China, China Southern and China Eastern – also plan to lodge a legal objection via the China Air Transport Association (CATA). In fact, this looks like one instance in which Chinese interests seem pretty much aligned with those of their American peers. So often it seems that the two sides have opposing objectives. This time the guns are pointed at a common enemy.

Some of the other tactics on display are similar too. “The aviation industry is only slightly profitable”, the CATA insider warned the Beijing News (as if he was confiding some great secret). That means that it is passengers who will end up having to bear the additional costs (the price of a ticket from China to Europe will probably rise by about Rmb200, the insider told the newspaper).

But solidarity extends only so far. CATA is also arguing that the inclusion of carriers from developing countries in the ETS is illegal because it violates the “common but differentiated responsibility” principle introduced under the Kyoto Protocol.

The premise is that worse-off nations should shoulder less of the burden in cutting carbon emissions than countries that have been industrialised over the longer term.

The Chinese are also angry that emission allowances will be calculated against a base case in which North American and European airlines have already built a mature European network. By contrast, Chinese carriers expect to expand their own services in the region in future, and say that the scheme will cost them more as a result.

It’s true that countries like Brazil, China and India will see the most accelerated growth in air traffic over the next 20 years. But EU bureaucrats have long argued for airline inclusion in the ETS because their carbon emissions have been growing at some of the most rapid rates (even though they make up a relatively small percentage of total emissions). To then allow some form of exemption for the carriers responsible for much of the greenhouse gas growth would seem to break with their own logic.

Still, there is usually a little wriggle room on principle, even in some of the most resolute arguments. And another irony is that Chinese aviation officials have joined their international counterparts in calling for ETS to be dropped in favour of a global cap-and-trade scheme.

Sceptics might exhale loudly at this point, looking back at the wider environmental debate in which Chinese negotiators haven’t been at all keen on international commitments on carbon emissions. During bad-tempered climate talks in Copenhagen in December 2009, they refused to submit to an international system for monitoring and verifying emissions cuts.

In Copenhagen, Xie Zhenhua, the top Chinese climate official is said to have lost his temper, even yelling at President Obama.

If that’s true, perhaps he and O’Leary should meet up to talk tactics for the next round of airline negotiations.

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