For an association that is unable to discipline its own members and get them to act on domestic policy issues, the European Union appears quixotic seeking to unilaterally impose a carbon tax on all airlines flying in and out of Europe. The proposal will require all airlines touching EU airports to buy emission reduction permits to offset the carbon dioxide discharged by them in excess of the caps fixed under the EU’s internal emission trading scheme. As could be expected, all the non-EU airlines are up in arms against the move. Non-EU governments are livid since they regard the move to tax the entire flight journey of an aircraft, rather than only its use of EU airspace, totally unacceptable in principle. This view is now supported by global aviation bodies, such as the International Air Transport Association (IATA), the International Air Cargo Association and domestic apex airline organisations of China, the US and some other countries. Significantly though, Indian air carriers, as also the government, have been slow to react to the EU’s move, and are now making up for it by pro-actively opposing the arbitrary move. Union finance minister Pranab Mukherjee told the recent G-20 meeting in Paris that such a measure cannot be justified as a source of new and additional finance for climate change. Going a step further, New Delhi is also eliciting the support of some 30 other countries to counter the move. Significantly, even the IATA is contesting it on grounds of sovereignty and violation of global pacts on aviation and climate change.
That said, it can also be justifiably argued that if industries, power plants and various other polluting installations, not excluding road transport, are being asked to slash their harmful gas emissions, why not the airlines? The United Nations Framework Convention on Climate Change (UNFCC) recognised through the Kyoto Protocol the harmful environmental impact of airlines and their contribution to global warming. However, the UNFCC decided that corrective action on this count would be decided by the 190-member strong UN International Civil Aviation Organisation (ICAO). ICAO’s inability to make any headway so far and the EU countries’ stressed fiscal situation have encouraged this unilateral, albeit controversial, action. The EU’s scheme, if implemented despite resistance from the rest of the world, is bound to evoke retaliatory action. To avoid this face-off between EU and the rest it would be advisable for ICAO to hasten the process of evolving a global consensus on imposing emission discipline on airlines. The EU also needs to realise that retaliatory action taken by countries individually or collectively may erode the financial gains it expects from its own carbon tax. More so when many European airlines are losing market share to much better operated Asian airlines. Therefore, a much better option for the EU and all other countries would be to encourage environment-friendly technologies for airplanes as has been attempted with considerable success for motor vehicles. The EU could take the first step as a major manufacturer of aircraft. This, in the longer run, will fetch a higher fiscal and ecological dividend than making airlines pay for the pollution they continue to cause without let.