Thursday

25th May 2017

Nobel laureates back EU tax on airline emissions

Five American Nobel-winning economists and 21 other US academics and businessmen have urged President Barack Obama to support the EU's hated CO2 tax on airlines.

The group-of-26 in an open letter to Obama dated 14 March accused the White House of "selfish inaction" which "pushes increased costs onto future generations, and dangerously increases the probability of extreme events with major impacts on their welfare."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Obama boarding Air Force One - Nobelists accuse the US of 'selfishness' (Photo: White House)

"We implore you to support the European Union's innovative efforts to place a price on carbon from aviation through the emissions trading system, or, at the very least, to stop actively opposing these efforts," they said.

"Because emissions are not priced, the world is wastefully using up a scarce resource, the earth's ability to safely absorb greenhouse gas emissions."

The letter was signed by Nobel laureates Kenneth Arrow, William F. Sharpe, Eric Maskin, Thomas Sargent and Christopher Sims, two hedge fund managers from the New-York-based Kepos capital and professors from top US universities, such as Columbia, MIT, Princeton and Stanford.

The US at a meeting in Russia in February joined 19 countries, also including China and India, in a coalition to scupper the EU tax.

It discussed a number of countermeasures, such as banning national carriers from paying the carbon levy; imposing retaliatory fees on EU-domiciled airlines; blocking them from operating new routes; and triggering a complaint procedure at the International Civil Aviation Organization, a UN body in Montreal, Canada.

Last week, Chinese airlines said they may freeze $12 billion' worth of orders for Airbus jets in a move which could cost its EU-based manufacturer, Eads, 2,000 jobs. China's EU ambassador, Wu Hailong, told EUobserver the government did not order the freeze, but said it "makes sense" for the companies to freeze orders themselves.

This week, Eads CEO Tom Enders and the heads of eight other EU aviation giants, including Air France, British Airways, KLM and Lufthansa, wrote to the leaders of Germany, France, Spain and the UK also urging them to bin the CO2 levy.

"The aim must be to find a compromise solution and to have these punitive trade measures stopped before it is too late," they said.

The CO2 tax came into force on 1 January, but airlines will not get their first EU carbon bill until next year. According to Reuters, extra costs would be some €2 per passenger on, for instance, a typical EU-China flight.

Some analysts, such as Emmanuel Fages, from French bank Societe Generale, have in recent days predicted the EU will go for some kind of face-saving back-down to avoid a trade war.

But EU environment commissioner Connie Hedegaard in her latest statement on the subject after meeting with EU environment ministers in Brussels last Friday Tweeted that: "All member states repeated full support to the EU's line on aviation."

The Union's top court in Luxembourg in December also ruled that the CO2 levy is perfectly legal.

Focus

China threatens EU with legal action in CO2 dispute

Chinese airlines are resisting being included in the EU's carbon emissions trading scheme from 1 January and are considering legal action, a move also being considered by their counterparts in the US. The warning comes despite the European Commission suggesting that some exemptions would be possible.

Focus

EU 'won't back down' in China aviation row

The European Union has said it will continue with plans to charge airlines for pollution credits from the beginning of next year, amid reports that China has frozen a multi-billion euro Airbus order in retaliation.

Trump delays climate decision

The White House said it would take more time to decide if the US should remain part of the Paris climate agreement, while talks are underway in Bonn.

Column / Crude World

Nord Stream 2: The elephant in the room

The European Commission should provide a thorough impact assessment of Nord Stream 2, a project that appears to go against all of its Energy Union objectives.

News in Brief

  1. British PM to speak out on US terrorism leaks
  2. Tusk calls for 'values, not just interests' after Trump meeting
  3. Pressure grows on climate impact of EU timber harvesting
  4. US goes after Fiat Chrysler over emissions cheat
  5. Munich police break up Europe-wide burglar clan
  6. Report: VW threatened with €19.7 billion French fine
  7. Turkey begins mass trial of suspected coup leaders
  8. Merkel's CDU consolidates lead in polls

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms