Rhein on Energy and Climate

As expected after the demonstration of power by major airline countries in Moscow February 28-29th China has not waited long before taking retaliatory action against the EU imposition of emission caps on Chinese carriers` flights to EU airports.

Two multi-billion Chinese orders for Airbus planes are at stake.

The Chinese government has blocked the authorisation of an order for 35 A 330 planes. Annulling an order for 10 A 380 is also at stake. The EADS is afraid of losing its fastest growing market, which would imply job losses and leave Boeing as the happy beneficiary.

Of course, so far these are rhetoric threats. It is not that simple to shift from one supplier to another, both with full order books. Still, it would be irresponsible to take them lightly. China is known for vigorously defending its interest, and obviously the unilateral action by the EU has hit a raw nerve.

The EU is therefore confronted with a simple option:

  • “hoist the white flag” and ask the ICAO for a “reconciliation meeting” in which to improve the terms of the arrangements agreed in July 2011 for the use of more efficient engines and sustainable biofuels;
  • “fight it through” to the bitter end, whatever the negative consequences for EU aircraft manufacturing and airlines.

A rational examination of the options should lead EU policy makers to take a conciliatory stand: the economic interest of avoiding “trade conflicts” that would seriously hurt the EU are far more important than reducing global C02 emissions by less than one per cent through the extension of the EU emission cap and trade regime to international air traffic.

Rather than teaching the world lessons in good “climate behaviour” the EU should focus its diplomatic skills on negotiating a better deal within ICAO, the competent UN organisation, as it is doing in its overall climate approach. The ICAO is no worse than the UNFCCC! Neither has produced visible results during the last 20 years. It is therefore not easy to see why the EU is getting more exasperate with ICAO that deals only with a 3 per cent than with UNFCC which is in charge of the bulk of emissions.


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