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Hot Air and Hot Heads: An Examination of the Legal Arguments Surrounding the Extension of the European Union's Emissions Trading Scheme to Aviation
Published online by Cambridge University Press: 29 October 2012
Abstract
The issue of carbon emissions in international aviation has proven difficult to deal with from a regulatory standpoint. Issues of a transnational character are regulated through co-operation and compromise, but there has been a lack of political will to achieve the necessary co-operation and compromise to deal effectively with carbon emissions in international aviation. The European Union is now trying to push for development in the regulatory sphere through the unilateral extension of its Emissions Trading Scheme to international aviation. This unilateral extension conflicts with international air law, but has recently been declared valid by the Court of Justice of the European Union in Case C-366/10. This article focuses on the legal arguments raised in that case, concluding that the judgment delivered by the Court is legally questionable, but may nonetheless prove constructive, as a political instrument, in the delivery of an international solution to the regulation of aviation emissions.
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Footnotes
*
LL.M (New York University); LL.M (National University of Singapore). This article is a revised version of the paper that won the 2012 International Air Transport Association (IATA) Constance O'Keefe Legal Writing Award. I wish to thank Professor Alan Khee-Jin Tan from the National University of Singapore for encouraging me to submit this paper to the competition, and the partnership of Squire Sanders LLP for sponsoring the Constance O'Keefe Award.
References
1. Kyoto Protocol to the United Nations Framework Convention on Climate Change, 11 December 1997, 2303 U.N.T.S. 148 (entered into force 16 February 2005) [Kyoto Protocol].
2. MACINTOSH, Andrew, “Overcoming the Barriers to International Aviation Greenhouse Gas Emissions Abatement” (2008) 33 Air and Space Law 403 at 405Google Scholar
3. TRUXAL, Stephen, “The ICAO Assembly Resolutions on International Aviation and Climate Change: An Historic Agreement, a Breakthrough Deal, and the Cancun Effect” (2011) 36 Air and Space Law 217Google Scholar
4. See, again, Macintosh, supra note 2, who appends a chronological history of ICAO actions to his article.
5. Truxal, supra note 3 at 237.
6. HAVEL, Brian F. and MULLIGAN, John Q., “The Triumph of Politics: Reflections on the CJEU Judgment of the Court of Justice of the European Union Validating the Inclusion of Non-EU Airlines in the Emissions Trading Scheme” (2012) 37 Air and Space Law 4Google Scholar
7. The International Air Transport Association and the National Airline Association of Canada appeared as interveners in the case, but they are included here as claimants to avoid the difficulty of differentiating between the formal claimants and the interveners. In substance, the claimants and interveners advance the same arguments.
8. Air Transport Association of America and Ors v. UK Secretary of State for Energy and Climate Change, Judgment of the Court of Justice of the European Union (Grand Chamber) of 21 December 2011, [2011] EUECJ I-000 NYR, Case C-366/10, on referral from the High Court of Justice of England and Wales, Queen's Bench Division (Administrative Court) [ECJ Judgment].
9. Ibid.
10. See, for instance, Airlines for America (A4A) “A4A Comment on European Court of Justice Decision” (21 December 2011), online: A4A 〈http://airlines.org/Pages/news_12-21-2011.aspx〉 [A4A Comment]; “What Next in the EU Versus Airlines Dispute?” Reuters (23 December 2011).
11. “Threat of Global Trade War Over Airline Emission Charges” The Telegraph (18 May 2012).
12. On 22 February 2012, a joint declaration was signed by twenty-three states that contemplated, among other things, the filing of a formal application for dispute resolution at ICAO, and the taking of “appropriate action” in the light of an assessment of the EU ETS with respect to the EU's commitments in the World Trade Organization. See “Joint Declaration of the Moscow Meeting on Inclusion of International Civil Aviation in the EU-ETS” GreenAir (22 February 2012), online: GreenAir 〈http://www.greenaironline.com/photos/Moscow_Declaration.pdf〉 [Joint Declaration]. Tony Tyler, the Director General of the International Air Transport Association, has called for the United Nations to mediate in the dispute between China and the EU. See “Call for UN to Mediate in China-EU Aviation Row” Reuters (12 February 2012). In late 2011, an official from the China Air Transport Association also announced that China would initiate legal action against the ETS in Germany. See “China's CATA to Sue on Airline Carbon Rule” Airwise (26 December 2011), online: Airwise 〈http://news.airwise.com/story/view/1324903325.html〉.
13. See Joint Declaration, supra note 12.
14. Bartels, for instance, notes the relevance of Case C-366/10 in the determination of whether the ETS can be characterized as a fiscal measure within the meaning of Article III(2) of the General Agreement on Tariffs and Trade, 30 October 1947, 58 U.N.T.S. 187 (entered into force 1 January 1948) [GATT], and agreed with the ECJ that it should not be so characterized. See Lorand BARTELS, “The Inclusion of Aviation in the EU ETS: WTO Law Considerations” International Centre for Trade and Sustainable Development, Issue Paper, April 2012. Meltzer disagrees with Bartels on this point, but uses the ECJ's analysis in determining whether the ETS imposes a fee, duty, or other charge in his determination of whether the ETS falls within the annex on Air Transport Services to the General Agreement on Trade in Services, 15 April 1994, 1869 U.N.T.S. 183 (entered into force 1 January 1995) [GATS]. Further, Meltzer considers the key question of jurisdictional sovereignty in the light of the arguments advanced in Case C-366/10. See Joshua MELTZER, “Climate Change and Trade: The EU Aviation Directive and the WTO” (2012) 15 Journal of International Economic Law 111 at 126, 130, and 151−3.
15. Kyoto Protocol, supra note 1, art. 3(1).
16. Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008, 19 November 2008, online: EUR-Lex 〈http://eur-lex.europa.eu〉 [Directive 2008/101/EC].
17. Ibid., Preamble at para. 11.
18. Ibid., Annex at para. 1.
19. This is established by the manner of calculating emissions: fuel consumption × emissions factor, with fuel consumption including all consumption from take-off, landing, flight, and taxiing activity. See ibid., Annex at para. 2(b).
20. Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, 13 October 2003, online: EUR-Lex 〈http://eur-lex.europa.eu〉, art. 12.
21. Directive 2008/101/EC, supra note 18, art. 1 at para. 4.
22. Ibid.
23. Commission Regulation (EC) No 748/2009 of 5 August 2009, 5 August 2009, online: EUR-Lex 〈http://eur-lex.europa.eu〉.
24. The airlines were required to record their emissions in 2010 and issue an “emissions report” to their administering Member State. The calculation employed to record the emissions may be expressed, essentially, as follows: weight of passengers and cargo × distance flown (“tonne-km data”). The aggregate tonne-km data submitted by all airlines was employed by the EU to establish a “benchmark” for the allowances to be distributed free of charge (0.6797 allowances per 1,000 tonne-kilometres in 2012). This was done by dividing the average 2004−06 total emissions by the aggregate 2010 tonne-km data. Kerry REALS, “Airlines to Receive 85% of Allowances Free in 2012” Flightglobal (26 September 2011), online: Flightglobal 〈http://www.flightglobal.com/news/articles/airlines-to-receive-85-of-eu-ets-allowances-free-in-2012-362537/〉.
25. Directive 2008/101/EC, supra note 16, art. 1 at para. 4.
26. The market growth must be of such significance that an airline's tonne-km data increases by over 18% per annum. See ibid., art. 3f.
27. Ibid.
28. Ibid., art. 12(2a).
29. Ibid., art. 16(3).
30. Ibid., art. 16(2).
31. Ibid., art. 16(5).
32. Ibid., Preamble at para. 17.
33. Ibid., art. 25a. Interestingly, the exemption of foreign aircraft from certain states only, without extension of such exemptions to aircraft from all states, may violate the most-favoured nation requirement in WTO law. Meltzer notes that “the Aviation Directive might … violate that [sic] GATT Article 1 should the EU exempt from the requirement to purchase emission allowances airlines from countries regulating CO2 emissions from their aviation sector. Where this resulted in different cargo rates for goods, the EU could be providing more favorable treatment to imports of goods from these WTO members.” See Meltzer, supra note 14 at 137, and GATT, supra note 14, art. 1.
34. Aviation Greenhouse Gas Emissions Trading Scheme Regulations (UK) 2009, S.I. 2009/2321; now supplemented by the Aviation Greenhouse Gas Emissions Trading Scheme Regulations (UK) 2010, S.I. 2010/1996. The UK is the EU Member State responsible for administering the ETS., 〈http://europa.eu/about-eu/countries/member-countries/unitedkingdom/index_en.htm〉.
35. John BALFOUR, Mark BISSET, and Georgina CROWHURST, “The ATA Case Against the EU ETS” Clyde & Co (4 October 2010), online: Clyde & Co 〈http://www.clydeco.com/knowledge/articles/the-ata-case-against-the-eu-ets〉.
36. Official Referral, 22 July 2010, reproduced in the Official Journal of the European Union: OJ 2010 C 209.
37. Aviation Environment Federation, WWF-UK, the European Federation for Transport and Environment, the Environmental Defense Fund, and Earthjustice.
38. With written submissions additionally tendered by the governments of Belgium, Germany, Italy, the Netherlands, Austria, and Iceland.
39. Formally, there is only one defendant to the proceedings, but to avoid the potential complication of differentiating between the defendant and the various interveners, this chapter adopts the plural form of defendant to cover all defending parties.
40. Air Transport Association of America and Ors v. UK Secretary of State for Energy and Climate Change, Opinion of Advocate-General Kokott delivered on 6 October 2011, [2011] EUECJ I-000 NYR, Case C-366/10 [Kokott Opinion].
41. Burrows and Greaves acknowledge that the relationship between the Advocate-General and the Court is complex, affected by a “mélange” of factors, but note that “it is certainly the case that the Advocate General can assist the Court in developing reasoning which it can follow in coming to its decision”. See Noreen BURROWS and Dora GREAVES, The Advocate General and EC Law (Oxford: Oxford University Press, 2007) at 209−13.
42. Havel and Mulligan adopt the same stance in their paper. See Havel and Mulligan, supra note 6.
43. Convention on International Civil Aviation, 7 December 1944, online: ICAO 〈http://www.icao.int/icaonet/dcs/7300.html〉 [Chicago Convention].
44. Kokott Opinion, supra note 40 at para. 57.
45. Ibid., at para. 64. See ECJ Judgment, supra note 8 at para. 71.
46. By and large, the ECJ's reasoning on the question of treaty application has a sound basis in ECJ precedent. However, see Havel and Mulligan, supra note 6 at 13−16 for a discussion of the practical difficulties the Court's approach might occasion.
47. US-EU Air Transport Agreement, 30 April 2007, online: US Department of State 〈http://www.state.gov/e/eeb/rls/othr/ata/e/eu/114768.htm〉 [Open Skies Agreement].
48. Havel and Mulligan, supra note 6 at 16.
49. The Court, in its formal judgment, does not do this.
50. Chicago Convention, supra note 43, art. 1.
51. Ibid., art. 11. In art. 7 of the Open Skies Agreement, the wording is “while within the territory of the first Party”. See Open Skies Agreement, supra note 47, art. 7.
52. Chicago Convention, supra note 43, art. 12.
53. Robert JENNINGS and Arthur WATTS, Oppenheim's International Law, 9th ed. (Oxford: Oxford University Press, 2008) at 456.
54. Air Transport Association of America and Ors v. UK Secretary of State for Energy and Climate Change, Oral Submissions on Behalf of the Air Transport Association of America (ATA), United Continued Airlines, and American Airlines, Case C-366/10 at para. 9 [Claimants’ Oral Submissions].
55. Ibid., at paras. 9 and 16.
56. Chicago Convention, supra note 43, art. 1.
57. Martin BARTLIK, “The Extension of the European Union's Emissions Trading Scheme to Aviation Activities” (2009) 34 Annals of Air and Space Law 151 at 165.
58. Brian HAVEL and Gabriel SANCHEZ, “Toward a Global Aviation Emissions Agreement” SSRN, online: SSRN 〈http://ssrn.com/abstract=1911508〉 at 20. This paper appears in a forthcoming issue of the Harvard Environmental Law Review.
59. Ibid., at 21. See Chicago Convention, supra note 43, art. 12.
60. Kokott Opinion, supra note 40 at para. 147. The term “calculation parameter” is employed by the environmental groups intervening in Case C-366/10. See Air Transport Association of America and Ors v. UK Secretary of State for Energy and Climate Change, Written Observations of the Aviation Environment Federation, WWF-UK, the European Federation for Transport and Environment, the Environmental Defense Fund, and Earthjustice, Case C-366/10 at paras. 11, 33, and 34 [Environmental Interveners’ Written Observations]. Kokott states that “the fact that the calculation of emission allowances to be surrendered is based on the whole flight in each case does not bestow upon Directive 2008/101 any extraterritorial effect”. See Kokott Opinion, supra note 40 at para. 147.
61. Environmental Interveners’ Written Observations, supra note 60, at para. 10.
62. Kokott Opinion, supra note 40 at para. 147.
63. ECJ Judgment, supra note 8 at paras. 126, 127, and 133. See also Havel and Mulligan, supra note 6 at 19 where the authors discuss this point.
64. Chicago Convention, supra note 43, art. 12. The application of art. 12 of the Chicago Convention was not directly addressed by the Court as the Court did not consider the application of individual Convention provisions following its earlier finding that the Convention does not bind the EU as a non-signatory. Nonetheless, the Court adopted an essentially similar line of argument as the Advocate-General's when it stated that the ETS does not “affect the principle of freedom to fly over the high seas since an aircraft flying over the high seas is not subject, in so far as it does so, to the allowance trading scheme”. See ECJ Judgment, supra note 8 at para. 126.
65. Kokott Opinion, supra note 40 at para. 170.
66. Ibid., at para. 169.
67. Bartels, supra note 14 at 10.
68. Kokott Opinion, supra note 40 at para. 152.
69. Ibid., at para. 153.
70. Directive 2008/101/EC, supra note 16, art. 1 at paras. 10 and 14.
71. ECJ Judgment, supra note 8 at paras. 127 and 133 (emphasis added).
72. Havel and Mulligan, supra note 6 at 19.
73. Bartlik, supra note 57 at 163.
74. Ibid., at 164. Bartlik concludes that the ETS “infringes upon the territorial principle”. See ibid., at 165.
75. Directive 2008/101/EC, supra note 16, art. 1 at para. 18. The Court does not employ the equivalence provision as a safeguard against extra-territoriality, but it nonetheless views the provision in the same light as the Advocate-General. See ECJ Judgment, supra note 8 at paras. 150 and 151.
76. Kokott Opinion, supra note 40 at paras. 156−9.
77. Ibid., at para. 156.
78. There are no public guidelines to govern the Commission's determination. See Cathy BUYCK, “Trading Places” Air Transport World (1 May 2011), online: Air Transport World 〈http://atwonline.com/eco-aviation/article/trading-places-0429〉, at 26.
79. See, for instance, Organisation for Economic Co-operation and Development, “What is Mutual Agreement Procedure (MAP)?”, online: OECD 〈http://www.oecd.org/document/51/0%2C3343%2Cen_2649_33753_36158963_1_1_1_1%2C00.html〉.
80. Directive 2008/101/EC, supra note 16, art. 1 at para. 18.
81. Failure to act transparently in this process may give rise to a claim under WTO law. Meltzer, supra note 14 at 147 notes that art. X of GATT (see GATT, supra note 14, art. X):
requires that trade measures are applied consistent with due process and procedural fairness … Currently, the EU has yet to clarify how it will assess whether regulation by another country of its aviation emissions has an equivalent environmental impact to the EU system. To be consistent with these due process norms, the regulations should be developed in a transparent manner and any mechanisms for assessing the environmental effectiveness of another country's program should provide opportunities for comment, a hearing, and reasoned decisions.
82. Chicago Convention, supra note 43, art. 1.
83. Ibid., art. 11.
84. Open Skies Agreement, supra note 47, art. 7.
85. Kokott Opinion, supra note 40 at para. 166. The Court considered only art. 7 of the Open Skies Agreement, finding it inapplicable for the reason that airlines can choose whether or not to subject themselves to the ETS. See ECJ Judgment, supra note 8 at paras. 132−5.
86. The Court employs the same reasoning in relation to art. 15(3) of the Open Skies Agreement, which also requires non-discriminatory treatment where either the EU or the US adopts environmental standards different from those recommended by ICAO in the annexes to the Chicago Convention. See ECJ Judgment, supra note 8 at paras. 98, 99, and 154, and Open Skies Agreement, supra note 47, art. 15(3). Art. 15(3) is considered below, in connection with the claimants’ submission of impermissible unilateralism.
87. Andreas HARDEMAN, “A Common Approach to Aviation Emissions Trading” (2007) 32 Air and Space Law 3 at 16.
88. Kokott Opinion, supra note 40 at para. 166.
89. Ulrich STEPPLER and Angela KLINGMÜLLER, “EU Emissions Trading Scheme and Aviation: Quo Vadis?” (2009) 34 Air and Space Law 253 at 258; Air Transport Association of America and Ors v. UK Secretary of State for Energy and Climate Change, Written Observations of the International Air Transport Association and the National Airlines Council of Canada, Case C-366/10 at paras. 188−9 [IATA Written Observations].
90. Example formulated using ICAO Carbon Emissions Calculator. See International Civil Aviation Organization, “Carbon Emissions Calculator”, online: ICAO 〈http://www2.icao.int/en/carbonoffset/Pages/default.aspx〉.
91. This issue is debated. See Sascha ALBERS, Jan-André BÜHNE, and Heiko PETERS, “Will the EU-ETS Instigate Airline Network Configurations?” (2008) Journal of Air Transport Management 1. Some airlines have recently imposed an additional cost on passengers to offset the cost of the ETS. See “Weak Carbon Price Sees Market Analysts Sharply Downgrading Forecasts of EU ETS Cost to Airlines in 2012” GreenAir (20 February 2012), online: GreenAir 〈http://www.greenaironline.com/news.php?viewStory=1425〉.
92. The central assumption is that the price of carbon remains stable at €20 per ton of CO2. See Albers, Bühne, and Peters, supra note 91, at 2.
93. Ibid., at 3−4.
94. Ibid., at 4.
95. Annela ANGER, “Including Aviation in the European Emissions Trading Scheme: Impacts on the Industry, CO2 Emissions and Macroeconomic Activity in the EU” (2010) 16 Journal of Air Transport Management 100.
96. “Clean Air Turbulence” The Economist (7 July 2011), online: The Economist 〈http://www.economist.com/node/18928660〉, citing the study.
97. Buyck, supra note 78 at 26−7.
98. Kyoto Protocol, supra note 1, art. 2(2).
99. The International Air Transport Association and National Airlines Association of Canada suggest that the word “shall” was part of a deliberate compromise to allow aviation emissions to be regulated by ICAO in return for the removal of language that would have allowed for optional taxation of fuels used in aviation. See IATA Written Observations, supra note 89 at para. 217, citing Joanna DEPLEDGE, “Tracing the Origins of the Kyoto Protocol: An Article-By-Article Textual History”, United Nations Framework Convention on Climate Change, Technical Paper, 25 November 2000 at 27.
100. Claimants’ Oral Submissions, supra note 54 at paras. 167−9; IATA Written Observations, supra note 89 at para. 219, citing Macintosh, supra note 2 at 405. Emissions occurring within the sovereign airspace of state parties to the Kyoto Protocol remain within the jurisdictional province of each state.
101. Open Skies Agreement, supra note 47, art. 15(3).
102. Havel and Sanchez, supra note 58 at 9.
103. Macintosh, supra note 2 at 405.
104. International Civil Aviation Organization, “Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection-Climate Change” (October 2010), online: ICAO 〈http://legacy.icao.int/env/A37_Res19_en.pdf〉, at para. 14 [Resolution A37-19].
105. In oral arguments before the ECJ, the environmental interveners advanced that (“Sovereignty the Key Issue as Europe, US Airlines and Environmental Groups Argue Their EU ETS Cases Before the ECJ”, GreenAir (6 July 2011), online: GreenAir 〈http://www.greenaironline.com/news.php?viewStory=1284〉 (emphasis added)):
[t]he implication of [the claimants’] argument must be that not just unilateral action but even a mutual agreement between states would be prohibited. The airlines’ interpretation is contrary to the views of the ICAO parties, which unambiguously state that emission trading systems could be implemented on the basis of mutuality.
106. Chicago Convention, supra note 43, Annex 16.
107. Chicago Convention, supra note 43, art. 15(3).
108. United Nations Framework Convention on Climate Change, 9 September 1992, 1771 U.N.T.S. 107 (entered into force 21 March 1994).
109. Kokott Opinion, supra note 40 at para. 178.
110. ECJ Judgment, supra note 8 at para. 75.
111. Kokott Opinion, supra note 40 at para. 185.
112. Macintosh notes that “emissions are only attributable to a country if they result directly from activities that occur within its territory”, and, thus, emissions from international airspace were left to governance by ICAO. See Macintosh, supra note 2 at 405.
113. International Civil Aviation Organization, “Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection” (December 2007), online: ICAO 〈http://www.icao.int/environmental-protection/Documents/A36_Res22_Prov.pdf〉, at Appendix L (emphasis added) [Resolution A36-22].
114. Kokott notes this in her introductory comments. See Kokott Opinion, supra note 40 at para. 31.
115. Havel and Sanchez, supra note 58 at 11−12. Hardeman reaches the same conclusion. See Hardeman, supra note 87 at 15. See Resolution A37-19, supra note 104.
116. For instance, Japan, Canada, and Australia. See Macintosh, supra note 2 at 412.
117. See, for instance, Macintosh, supra note 2 at 412; Havel and Sanchez, supra note 58 at 11. See Kyoto Protocol, supra note 1, art. 10.
118. Slobodan PERDAN and Adisa AZAPAGIC, “Carbon Trading: Current Schemes and Future Developments” (2011) 39 Energy Policy 6040 at 6051−2. Most recently, the Conference of Parties 17 failed to achieve any binding resolution for parties to adopt a post-Kyoto framework. See “Climate Talks Close with Pledges, but Little Action” International Herald Tribune (12 December 2011).
119. See Resolution A37-19, supra note 104.
120. It was the EU that described ICAO Resolution A37-19 as a “breakthrough” on the strength of the parties’ agreement that market-based measures should play an important role in combatting aviation emissions. This moved ICAO's stance beyond the stalemate evinced in Resolution A36-22, where the parties affirmed that any regulatory measures should only be taken on the basis of “mutual agreement”. See Truxal, supra note 3 at 231, and Resolution A36-22, supra note 113.
121. Resolution A37-19, supra note 104, para. 6 (emphasis added).
122. Truxal, supra note 3 at 237. See Kyoto Protocol, supra note 1.
123. Resolution A37-19, supra note 104, para. 4.
124. Directive 2008/101/EC, supra note 18, Preamble at para. 17.
125. Kokott Opinion, supra note 40 at para. 187.
126. See ECJ Judgment, supra note 8 at paras. 150−1, where the Court considers the possibility of harmonization between different state-based regulatory measures.
127. IATA Written Observations, supra note 89 at para. 198. Technological upgrades constitute a central pillar of IATA's approach to achieving carbon-neutral growth by 2020. The other pillars are to remedy inefficiencies in aircraft operations (e.g. weight-reduction measures to save fuel), to improve air traffic management and airport infrastructure, and limited market-based measures implemented at the global level. See International Air Transport Association, “A Global Approach to Reducing Aviation Emissions” (November 2009), online: IATA 〈http://www.iata.org/SiteCollectionDocuments/Documents/Global_Approach_Reducing_Emissions_251109web.pdf〉 [IATA Timeline].
128. “Airlines Told Not to Pay EU Green Tax” Xinhua (7 February 2012).
129. “US Warns Over EU Stance on Airline Emissions” Financial Times (17 April 2012).
130. “Exclusive-India to Ask Airlines to Shun EU Carbon Scheme” Reuters (19 March 2012).
131. U.S., Bill H.R. 2594, European Union Emissions Trading Scheme Prohibition Act of 2011, 112th Cong., 2011 [US EU Emissions Bill].
132. Christine BOYNTON, “LaHood: EU ETS ‘Very, Very Bad’; Europe Holds Firm” Air Transport Weekly (9 March 2012), online: Air Transport Weekly 〈http://atwonline.com/international-aviation-regulation/news/lahood-eu-ets-law-very-very-bad-0308〉.
133. “Russia Fires First Shot in EU Aviation Emissions Trade War” The Guardian (22 February 2012).
134. Joint Declaration, supra note 12.
135. See the full list of contemplated measures in Joint Declaration, ibid., Attachment A.
136. “US Airlines Give Up on Legal Case Against Inclusion into the EU ETS but Call on Their Government to Step Up Retaliatory Action” GreenAir (29 March 2012), online: GreenAir 〈http://www.greenaironline.com/news.php?viewStory=1444〉 [GreenAir (29 March 2012)].
137. US EU Emissions Bill, supra note 131.
138. “Coalition of States Comes Up with Basket of Countermeasures over EU ETS but Falls Short of a Coordinated Attack” GreenAir (23 February 2012), online: GreenAir 〈http://www.greenaironline.com/news.php?viewStory=1429〉 [GreenAir (23 February 2012)]. See Joint Declaration, supra note 12.
139. Chicago Convention, supra note 43, art. 84.
140. In response to the Joint Declaration, Annie Petsonk of the Environmental Defense Fund noted that “cooler heads may have prevailed”. See GreenAir (23 February 2012), supra note 138. See also Brian F. HAVEL, Gabriel SANCHEZ, and Michael S. JACOBS, “EU Leaders Reject Internal Criticism on ETS” Aviation Law Prof Blog (13 March 2012), online: Aviation Law Prof Blog 〈http://lawprofessors.typepad.com/aviation/2012/03/eu-leaders-face-internal-criticism-on-ets-.html〉, where the authors write that the denial of reports that China had blocked Chinese airlines’ orders with Airbus “may indicate that the opposition states are not as eager to play hardball as previously thought”.
141. “The Prospect of EU ETS Non-Compliance by Foreign Airlines Fills European Carriers with Grim Foreboding” GreenAir (17 February 2012), online: GreenAir 〈http://www.greenaironline.com/news.php?viewStory=1424〉.
142. The EU evinced a firm intention to bring international aviation into its existing ETS in December 2005, when the European Council published a response to a September 2005 report issued by the European Economic and Social Committee and the Committee of the Regions entitled “Reducing the Climate Change Impact of Aviation”. See Commission of the European Communities, “Reducing the Climate Change Impact of Aviation” (September 2005), online: EUR-Lex 〈http://eur-lex.europa.eu/LexUriServ/site/en/com/2005/com2005_0459en01.pdf〉. The European Council's response to the report is available at Council of the European Union, “Brussels European Council 15/16 December 2005: Presidency Conclusions” EC Doc 15914/1/05_rev1 (30 January 2006), online: 〈http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/87642.pdf〉. Both ICAO Resolutions considering the possibility of market-based measures have been adopted since this time, in December 2007 (Resolution A36-22, supra note 113) and October 2010 (Resolution A37-19, supra note 104). For a comprehensive timeline until 2008 of ICAO's efforts to address emissions from international aviation, see Macintosh, supra note 2 at Appendix A. IATA published a roadmap to emissions reduction in November 2009. See IATA Timeline, supra note 127.
143. “UN Aviation Body Says Emissions Proposal by Year-End” Reuters (2 March 2012).
144. Ibid. See the speech delivered by Raymond Benjamin, Secretary General of ICAO, at the Washington International Aviation Club, Washington DC, in International Civil Aviation Organization, “Address by the Secretary General of ICAO Mr. Raymond Benjamin to the Washington International Aviation Club” (January 2012), online: ICAO 〈http://legacy.icao.int/icao/en/osg/2012/20120117_Washington_IAC.pdf〉 [Benjamin January 2012].
145. Mark Watson, Head of Environmental Affairs at Cathay Pacific, noted in February 2012 that (see GreenAir, “The Way Forward: Prospects for Securing a Global Agreement to Addressing Aviation's Climate Change Impact” (February 2012), online: GreenAir 〈http://legacy.icao.int/icao/en/osg/2012/20120117_Washington_IAC.pdf〉 [Watson February 2012]):
[T]he EU ETS has already given us a taste of what we may get if we fail. Climate change requires urgent action at a global scale. Given this, the only remaining question we need to ask ourselves is, can we afford to fail? And I think we all know the answer.
146. IATA Written Observations, supra note 89 at para. 208.
147. Chicago Convention, supra note 43, art. 15.
148. Ibid., art. 24.
149. Open Skies Agreement, supra note 47, art. 11(2).
150. Bartlik, supra note 57 at 166. Interestingly, the claimants themselves did not appear to argue that these subsidiary costs fall within the scope of art. 15 of the Chicago Convention.
151. Claimants’ Oral Submissions, supra note 54 at para. 181; IATA Written Observations, supra note 89 at para. 231.
152. Macintosh, supra note 2 at 413; Havel and Sanchez, supra note 58 at 12.
153. Kokott Opinion, supra note 40 at para. 215.
154. Environmental Interveners’ Written Observations, supra note 60 at para. 73.
155. Ibid., at para. 73.
156. Havel and Sanchez, supra note 58 at 13 (emphasis added).
157. Ibid., at 13.
158. Resolution A37-19, supra note 104, Annex at para. (n).
159. Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009, 23 April 2009, online: EUR-Lex 〈http://eur-lex.europa.eu〉, at para. 18.
160. UK Department of Transport, “Implementing Aviation EU-ETS in the UK: A Government Consultation”, online: YouTube 〈http://www.youtube.com/watch?v=sr4oO0tXfeQ〉, at 3:55. The Consolidated Fund is the UK Government's general bank account at the Bank of England.
161. The same reasoning may be applied to the Court's analysis of the claimants’ argument that the ETS constitutes an impermissible tax under art. 11(2) of the Open Skies Agreement, where the Court contends that the ETS is not a “duty, tax, fee or charge on fuel consumption” because, among other things, “it is not intended to generate revenue for the public authorities”. See ECJ Judgment, supra note 8 at para. 142; Open Skies Agreement, supra note 47, art. 11(2). The author submits, however, that irrespective of its intention, revenue generation is the effect of the ETS.
162. Environmental Interveners’ Written Observations, supra note 60 at paras. 76−7.
163. Kokott Opinion, supra note 40 at para. 216.
164. ECJ Judgment, supra note 8 at para. 143.
165. Chicago Convention, supra note 43, art. 24.
166. Open Skies Agreement, supra note 47, art. 11(2).
167. IATA Written Observations, supra note 89 at para. 237.
168. Braathens Sverige AB v. Riksskatteverket, Judgment of the Court of Justice of the European Union (Fifth Chamber) of 10 June 1999, [1999] ECR I-3419, Case C-346/97.
169. Ibid., at para. 23.
170. Kokott Opinion, supra note 40 at paras. 228−9.
171. ECJ Judgment, supra note 8 at paras. 137−8.
172. Lord Denning in HP Bulmer and Anor v. J Bollinger and Anor [1974] EWCA Civ 14, [1974] 3 W.L.R. 202Google Scholar
173. Open Skies Agreement, supra note 47, art. 11(2) (emphasis added).
174. Macintosh, supra note 2 at 414.
175. Kokott Opinion, supra note 40 at para. 233.
176. ECJ Judgment, supra note 8 at para. 142.
177. Bartlik states that “there can be no different treatment if a state directly imposes a fee, duty or other charge or if it introduces a system that results in financial burdens equal to a direct imposition of a fee, duty or other charge”. See Bartlik, supra note 57 at 166.
178. The author acknowledges, of course, that the EU does have regulatory capacity over the allocation of allowances, which is an external criterion relied on by the Court in its rejection of the claimants’ submission. For this criterion to invalidate the author's argument, however, would require EU Member States to allocate emissions in such a way as to impose no financial burden on airlines. However, this would wholly undermine the market-based operation of the ETS.
179. A4A Comment, supra note 10.
180. GreenAir (29 March 2012), supra note 136.
181. These developments are related to one another, as any action based on WTO law must be initiated by a WTO Member State, rather than a private entity.
182. See GATT, supra note 14, arts. XX(b) and XX(g); GATS, supra note 14, art. XIV.
183. HOWSE, Robert, “Commentary: The Political and Legal Underpinnings of Including Aviation in the EU ETS” in Bartels, supra note 14Google Scholar
184. Havel and Sanchez identify the possibility for a US-EU bilateral agreement on international aviation emissions as a stepping-stone to a multilateral agreement. See Havel and Sanchez, supra note 58.
185. LEON, Pablo Mendes DE, “Aviation Emissions-Where to Now?”, IATA 2012 Legal Symposium, 7 February 2012Google Scholar
Havel and Mulligan, supra note 6 at 32−3Google Scholar
186. Mark Watson, Head of Environmental Affairs at Cathay Pacific, to the Aviation Carbon 2012 conference in Watson February 2012, supra note 145Google Scholar
187. Benjamin January 2012, supra note 144.