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TWN Info Service on Climate Change (Feb12/05)
24 February 2012
Third World Network

Dear friends and colleagues,

Following our previous mailing on "Trade war looms over EU's tax on airlines" dated 21 February, we are pleased to share with you the outcome of the meeting of 29 countries in Moscow on 21-22 February, which is a joint declaration on inclusion of international civil aviation in the EU-ETS (the text is in Item 1 below).

We also include a report from Reuters (Item 2) titled "Foes of EU airline CO2 rules agree on tactics".

With best wishes,
Third World Network

ITEM 1

Joint declaration of the Moscow meeting on inclusion of international civil aviation in the EU-ETS

Considering that the inclusion of international civil aviation in the EU-ETS leads to serious market distortions and unfair competition, representatives of Armenia, Argentina, Republic of Belarus, Brazil, Cameroon, Chile, China, Cuba, Guatemala, India, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Russian Federation, Saudi Arabia, Seychelles, Singapore, South Africa, Thailand, Uganda and United States of America, gathered in Moscow, on the 21st and 22nd February 2012,

Recalling the Delhi Joint Declaration, adopted by the Council of ICAO on November 2nd, 2011 according to C-DEC 194/2;

Recalling the relevant provisions of the United Nations Framework Convention on Climate Change (UNFCCC);

Stressing the importance of the Kyoto Protocol to its Parties;

Reiterating the importance of the Chicago Convention and the need to ensure full compliance with its provisions;

Keeping in mind their national laws and regulations;

Affirming the importance of the role of the International Civil Aviation Organization (ICAO) in addressing international civil aviation emissions, including pursuant to the request from the Parties to the UNFCCC;

Stressing that the unilateral inclusion of international civil aviation in the EU-ETS has constituted an obstacle to the progress of ICAO's work underway to address international civil aviation emissions;

Underlining the lack of an adequate response from EU Member States to the ICAO Council's Decision C-DEC 194/2, including the lack of a constructive dialogue to address the concerns of the non-EU States expressed in that decision and elsewhere;

Considering that the inclusion of international civil aviation in the EU-ETS leads to serious market distortions and unfair competition;

Decided to:

a) Adopt this Joint Declaration as a clear manifestation of their unanimous position that the EU and its Member States must cease application of the Directive 2008/101/EC to airlines/ aircraft operators registered in third States;

b) Strongly urge the EU Member States to work constructively forthwith in ICAO on a multilateral approach to address international civil aviation emissions;

c) Consider taking actions/ measures set forth in Attachment A to this Joint Declaration including, for example, a proceeding under Article 84 of the Chicago Convention and barring participation by their respective airlines/aircraft operators in the EU ETS;

d) Exchange information on the measures adopted and to be adopted, particularly to ensure better coordination, by each non-EU Member State after this Meeting in future;

e) Continue their intensified common efforts to make progress at ICAO to address international civil aviation emissions;

f) Request the Russian Federation, on their behalf, to communicate this Joint Declaration to the EU and its Member States; and

g) Invite any other State to associate itself with this Joint Declaration and, in this connection, request the Russian Federation to extend this invitation.

Attachment A to the Moscow Joint Declaration

Basket of ACTIONS/ MEASURES

- Filing an application under Article 84 of the Chicago Convention for resolution of the dispute according to the ICAO Rules for the Settlement of Differences (Doc 7782/2);
- Using existing or new State legislation, regulations, or other legal mechanism to prohibit airlines/aircraft operators of that State from participating in the EU ETS;
- Holding meetings with the EU carriers and/or aviation-related enterprises in their respective States and apprise them about the concerns arising out of the EU-ETS and the possibility of reciprocal measures that could be adopted by the State, which may adversely affect those airlines and/or entities.
- Mandating EU carriers to submit flight details and other data;
- Assessing whether the EU ETS is consistent with the WTO Agreements and taking appropriate action;
- Reviewing Bilateral Air Services Agreements, including Open Skies with individual EU Member States, and reconsidering the implementation or negotiation of the 'Horizontal Agreement' with the EU;
- Suspending current and future discussions and/or negotiations to enhance operating rights for EU airlines/ aircraft operators;
- Imposing additional levies/charges on EU carriers/ aircraft operators as a form of countermeasure;
- Any other actions/ measures.

ITEM 2

Foes of EU airline CO2 rules agree on tactics

http://www.reuters.com/article/2012/02/22/eu-airlines-idUSL5E8DM3YD20120222

Wed Feb 22, 2012 2:56pm EST

  • Countries' options include barring airline participation
  • Russian hosts among those considering ETS ban
  • EU, IATA look to U.N. organization for global solution

By Jennifer Rankin

MOSCOW, Feb 22 (Reuters) - Countries opposed to an EU law forcing the world's airlines to pay for greenhouse gas emissions agreed on a basket of retaliatory measures, adding to a series of threats that have raised the prospect of the globe's first carbon trade war.

But the EU dismissed the threats as "hypothetical" and Russia's deputy transport minister also said the countries -- which include China, India and the United States -- were free to choose which of them they would actually use.

In Washington, the State Department said it would be "premature" to discuss specific retaliatory measures and voiced hope that the European Union would reconsider its carbon emissions scheme.

The array of potential steps include barring national airlines from participating in the EU program, lodging a formal complaint with the United Nations' International Civil Aviation Organization (ICAO), ceasing talks with European carriers on new routes and imposing retaliatory levies on EU airlines.

"Every state will choose the most effective and reliable measures that will help to cancel or postpone the implementation of the EU ETS (Emissions Trading System)," Valery Okulov, whose ministry hosted the meeting attended by more than 20 nations, told a news conference.

Russia has a particular measure it can use against Europe. Okulov, the former chief executive of Aeroflot, said Russia could take out an old weapon against European carriers: overflight fees on routes over Siberia.

Russia rescinded the onerous fees during the last decade, a move it linked to long-running talks for World Trade Organization membership, which it received late last year.

Since the start of this year, all airlines using EU airports are required to buy permits under the ETS, although they will not actually face a bill until next year. In addition, they will at first be handed 85 percent of allowances for free.

The European Commission reiterated it was standing by its law and said the Moscow meeting had delivered only negatives.

"Unfortunately, our question for Moscow meeting participants remains unanswered: What's your concrete, constructive alternative?" Climate Commissioner Connie Hedegaard said in a tweet.

Those opposing the program have debated the issue within the official ICAO framework and also in informal talks -- dubbed "the coalition of the unwilling" -- such as the two-day Moscow meeting, which ended on Wednesday.

Okulov said Saudi Arabia would organize the next unofficial meeting later this year.

Many nations and the EU have said the best arena to resolve the dispute would be the ICAO, which has been working on developing its own plan to curb rising aviation emissions.

Mark Toner, a spokesman for the U.S. State Department, said Washington still hopes the EU will reconsider.

"The U.S. position on the inclusion of its airlines in this emissions trading scheme has been very clear and consistent. We believe that the EU needs to cease application of this scheme to foreign airlines and engage meaningfully with the International Civil Aviation Organization to find and develop a global approach to this problem," he said.

The EU has always said it would have no need to make all airlines using its airports pay for carbon under its ETS if a comprehensive global program were in place.

At a regular briefing in Brussels, Isaac Valero-Ladron, EU spokesman for climate action, reiterated that the EU "will review its legislation if there is an ambitious global agreement in force because we would be covered by this agreement."

HARD LINE

Russia is among those to agree that the best forum would be the ICAO, but it still took a tough line at the Moscow talks.

"We have demonstrated our determination to ask for a cancellation or postponement of the EU ETS" in regard to airlines, Okulov said.

For all the talk, there were hints of a softening.

A list of signatories seen by Reuters showed only 23 nations, compared with 26 at earlier "coalition of the unwilling" talks.

The final "Moscow joint declaration" also dropped proposals from an earlier draft, including sending a letter to the EU stating individual nations' inability to join the EU ETS, as well as a clause on reopening trade agreements in other sectors to pressure EU industries.

As had been expected by many observers, the meeting also stopped short of invoking the ICAO'S formal dispute resolution procedure, a lengthy process which could delay the quest for an ICAO-based global program.

But feelings are still running high over what some nations view as an infringement on sovereignty.

China's central government State Council, or cabinet, earlier this month said all airlines were barred from taking part -- unless they had received government approval to do so.

The Commission has noted Chinese airlines have already signed up to a registry for eligibility for free allowances, while airlines have already begun passing on the extra costs to passengers through fare increases.

Representing the airlines, the International Air Transport Association called on the EU to be "sincere facilitators at ICAO" in the quest for a global framework.

"We don't want a trade war. But Europe's unilateral and extra-territorial EU ETS plans are clearly not acceptable to non-EU governments," Tony Tyler, IATA's director general and CEO said in remarks emailed to Reuters.

(Additional reporting by Barbara Lewis in Brussels and Andrew Quinn in Washington; Writing by Melissa Akin; Editing by Elizabeth Piper, William Hardy and Gerald E. McCormick)

 


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