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Published online by Cambridge University Press: 27 October 2017
From 1 January 2012, all flights departing from or arriving at the European Union are covered by the EU Emissions Trading Scheme (EU ETS). Amendments were made to Directive 2003/87/EC by Directive 2008/101/EC with the objective of reducing climate change impacts attributable to aviation, but also in order to avoid distortions of competition. The scheme now includes all airlines, including those from third countries, and accounts for emissions that occur partly outside the airspace of EU Member States. A large number of third countries claim that the extension of the Emissions Trading Scheme to legs of flights outside EU territory violates the principle of state sovereignty and deny the jurisdiction of the EU to regulate emissions that occur beyond its borders. So far, the validity of the EU regulation has been challenged by a claim brought by US and Canadian air carriers. They contended that, in adopting the Directive, the EU infringed principles of customary international law—in particular the principle of state sovereignty and the prohibition of extraterritorial application—as well as various international agreements. On 21 December 2011, the Court of Justice of the European Union ruled that the inclusion of emissions from aviation in the EU ETS is valid. In response, Chinese and Indian carriers threatened not to pay the charge, while US airlines pledged to consider other options. This chapter analyses the judgment of the Court and the opinion of Advocate General Kokott in this case. Particular attention is given to the question of extraterritorial jurisdiction and the understanding of state sovereignty in the context of global climate change mitigation. The chapter argues that the Court missed an opportunity to contribute to the clarification of the law on jurisdiction and to the development of climate law.
1 Dir 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Dir 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community. For implementing legislation and communications see: www.ec.europa.eu/clima/policies/transport/aviation/documentation_en.htm. See also VM Tunteng et al, ‘Legal analysis on the Inclusion of Civil Aviation in the European Union Emissions Trading System’, CISDL, Legal Brief May 2012, available at www.cisdl.org/ public/docs/news/CISDL_EU_ETS_Expansion_Legal_Brief.pdf. Crook, JR, ‘Possible Looming Conflict with EU Regulation of Greenhouse Gas Emissions from Civil Aviation; United States Prefers ICAO Action’ (2008) 102(1) The American Journal of International Law 171-73Google Scholar; Carminati, M and Vittoria, Giugi G, ‘Clean Air & Stormy skies: the EU-ETS Imposing Carbon Credit Purchases on United States Airlines’ (2010) 37 Syracuse Journal of International Law and Commerce 127 Google Scholar; Barton, J, ‘Including Aviation in the EU Emissions Trading Scheme: Prepare for Take-off’ (2008) 5(2) Journal for European Environmental & Planning Law 183-98CrossRefGoogle Scholar; Petersen, M, ‘The Legality of the EU’s Stand-Alone Approach to the Climate Impact of Aviation: The Express Role Given to the ICAO by the Kyoto Protocol’ (2008) 17(2) Review of European Community & International Environmental Law 196–204 CrossRefGoogle Scholar.
2 ICAO Working paper, Inclusion of International Civil Aviation in the European Union Emissions Trading Scheme (EU ETS) and its Impact (17 October 2011).
3 See, eg, Brownlie, I, Principles of Public International Law, 7th edn (Oxford, Oxford University Press, 2008)Google Scholar; Simma, B and Mueller, AT, ‘Exercise and the Limits of Jurisdiction’ in: Crawford, J and Koskenniemi, M, International Law (Cambridge, Cambridge University Press, 2012) 134 Google Scholar.
4 For climate law literature that deals in particular with aspects of liability for contribution to climate change: Lord, R et al (eds), Climate Change Liability: Transnational Law and Practice (Cambridge, Cambridge University Press, 2012)Google Scholar; Burns, WCG and Osofsky, HM (eds), Adjudicating Climate Change (Cambridge, Cambridge University Press, 2009)CrossRefGoogle Scholar; Faure, M and Peeters, M (eds), Climate Change Liability (Cheltenham, Edward Elgar, 2011)CrossRefGoogle Scholar.
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6 Communication from the Commission to the Council, the European Parliament, the European Economic and Social committee and the Committee of the Regions, ‘Winning the Battle Against Global Climate Change’, SEC (2005) 180.
7 IPCC, Climate Change 2007: Working Group III: Mitigation of Climate Change, 2007. See also: Accompanying document to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, ‘Limiting Global Climate Change to 2 degrees Celsius: The way ahead for 2020 and beyond’ COM (2007) 2 final.
8 FCCC/KP/AWG/2010/INF.1.
9 UNFCCC Decision 1/CP.17.
10 Communication from the Commissions to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, ‘Reducing the Climate Change Impact of Aviation’ COM (2005) 459 final, 27 September 2005.
11 Jardine, CN, Calculating the Environmental Impact of Aviation Emissions, (Oxford, Environmental Change Institute, June 2006) 2 Google Scholar.
12 COM (2005) 459 final (n 10) 2.
13 Art 2 UNFCCC.
14 COM (2005) 459 final (n 10) 3.
15 Commission (EC), ‘Building a post-2012 Global Climate Regime: Reducing Emissions from Specific Sectors and Sources, COP-15 European Union information sheet, 2009.
16 Revised 1996 IPCC Guidelines.
17 IPCC, Aviation and the Global Atmosphere: Summary for Policymakers (Geneva, Switzerland, 1999)Google Scholar.
18 For a discussion of the CBDR and aviation, see Scott, J and Rajamani, L, ‘EU Climate Change Unilateralism’ (forthcoming) 23(2) European Journal of International Law Google Scholar; B Mueller, From Confrontation to Collaboration: CBDR and the EU ETS Aviation Dispute with Developing Countries, Oxford Energy and Environment Brief, February 2012.
19 ICAO Resolution A37-19: Consolidated Statement of Continuing ICAO Policies and Practices related to Environmental Protection: Climate Change, 2010.
20 Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, ‘Winning the Battle Against Global Climate Change’ COM (2005) 35, 9 February 2005.
21 Ad hoc working group on long-term cooperative action under the convention fourteenth session (third part) Panama City, 7 October 2011, p 1 of 6, work of the AWG-LCA contact group, Agenda item 3.2.4, Cooperative sectoral approaches and sector-specific actions in order to enhance the implementation of Art 4, para 1(c), of the Convention, version for 7 October 2011 @ 12:00.
22 Outcome of the work of the AWG-LCA, p 14, para 78.
23 Pending scientific progress, all impacts of aviation should be addressed to the extent possible (2008/2010/EC, para 19).
24 de Sadeleer, N, Environmental Principles: From Political Slogans to Legal Rules (Oxford, Oxford University Press, 2002) 306 and ffCrossRefGoogle Scholar.
25 Commission (EC), ‘Reducing the Climate Change Impact of Aviation’, Report on the Public Consultation March–May 2005.
26 Ibid, paras 6.2 and 6.3.
27 Commission of the European Communities, Commissions Staff Working Document, ‘Summary of the Impact Assessment: Inclusion of Aviation in the EU Greenhouse Gas Emissions Trading Scheme (EU ETS)’ COM (2006) 818 final.
28 Dir 2003/87/EC of the European Parliament and of the Councilof 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Dir 96/61/EC.
29 Freestone, D and Streck, C (eds), Legal Aspects of Carbon Trading: Kyoto, Copenhagen and beyond (Oxford, Oxford University Press, 2009)CrossRefGoogle Scholar. Faure, M and Peeters, M (eds), Climate Change and European Emissions Trading. Lessons for Theory and Practice, New Horizons in Environmental Law (Cheltenham, Edward Elgar, 2008)CrossRefGoogle Scholar.
31 Carbon leakage occurs when there is an increase in CO2 emissions in one country as a result of an emissions reduction by a second country with a strict climate policy. See, eg, Reinaud, J, Climate Policy and Carbon Leakage: Impacts of the European Emissions Trading Scheme on Aluminium, IEA Information Paper, (Paris, International Energy Agency, October 2008)Google Scholar.
32 ‘India Leads Group of 26 Nations Against EU Aviation Emission Levy’, Bridges Weekly Trade News Digest, vol 15, No 33 (5 October 2011).
33 K Sundaram, ‘India Rallies 30 Nations Against EU Airline Emission Levy’, Bloomberg (29 September 2011).
34 D Kahya, ‘Air Wars: Fears of Trade War over EU Airline Carbon Cap’, BBC News (21 December 2011).
35 FCCC/CP/2011/INF.2/Add.1.
36 UNFCCC, ‘Kyoto Protocol’ available at www.unfccc.int/kyoto_protocol/items/2830.php. See also Faber, J and Brinke, L, The Inclusion of Aviation in the EU Emissions Trading System: An Economic and Environmental Assessment, ICTSD Programme on Trade and Environment, Trade and Sustainable Energy Series, Issue Paper No 5 (Geneva, International Centre for Trade and Sustainable Development, 2011)CrossRefGoogle Scholar, available at www.ictsd.org, pp 17–18.
37 Another question is whether air carriers fall under the purview of Article 3.1 UNFCCC, given that the Convention addresses States, not private actors.
38 Qantas, eg, state: ‘Impact of Carbon price … the Qantas Group will be unable to absorb the additional costs associated with the carbon price and there will be a full pass-through to customers’, available at www.qantas.com.au/travel/airlines/climate-change/global/en#jump3.
39 R Malina et al suggest windfall gains of US$ 2.6 billion between 2011 and 2020 of US airlines alone. See Malina, R et al, ‘The Impact of the European Union Emissions Trading Scheme on US Aviation’ (2012) 19 Journal of Air Transport Management 36 CrossRefGoogle Scholar.
40 Ibid.
41 See Voigt, C, ‘WTO Law and International Emissions Trading: Is There Potential for Conflict?’ (2008) 1 Carbon and Climate Law Review 52 Google Scholar; Voigt, C, Sustainable Development as a Principle of International Law: Resolving Conflicts between Climate Measures and WTO Law (Leiden, Martinus Nijhoff Publishers, 2009)Google Scholar.
42 Joint Declaration of the Moscow Meeting on Inclusion of International Civil Aviation in the EU ETS, 22 February 2012.
43 For a discussion, see B Meyer, A Defense of the EU Emissions Trading Scheme in Aviation Activities, pp 12–15, available at: www.ssrn.com/abstrakt=1955817.
44 Ibid, 13.
45 Art 3e(1) and Article 3f(2) in combination with Annex.
46 See, eg, ICAO Working Paper, 17 November 2011.
47 Joined Statement by China and Russia, 27 September 2011.
48 Commission decision of 16 April 2009 amending Decision 2007/589/EC as regards the inclusion of monitoring and reporting guidelines for emissions and tonne-kilometre data from aviation activities, annex XV.
49 Art 14(3) and Annex. Information to be reported includes:
[A]ggregated emissions from all flights performed during the period covered by the report which fall within the aviation activities listed in Annex I for which it is the aircraft operator and which: departed from each Member State, and arrived in each member State from a third country.
50 Art 16(3).
52 Convention on International Civil Aviation of 7 December 1944.
53 Kyoto Protocol to the United Nations Framework Convention on Climate Change of 11 December 1997 [2002] OJ L130, p 4.
54 Art 7 and the second sentence of Art 15(3) of the Open Skies Agreement.
55 Opinion of Advocate General Kokott, delivered 6 October 2011 in Case C-366/10 The Air Transport Association of America and others (ATA and others).
56 ATA and others, Opinion of Advocate General Kokott (n 55) paras 136 and 137.
57 ATA and others, Opinion of Advocate General Kokott (n 55) para 144.
58 Court of Justice of the European Union, Press Release No 104/11, Luxembourg, 6 October 2011.
59 ATA and others, Opinion of Advocate General Kokott (n 55) para 147.
60 ATA and others, Opinion of Advocate General Kokott (n 55) para 147.
61 ATA and others, Opinion of Advocate General Kokott (n 55) para 153.
62 ATA and others, Opinion of Advocate General Kokott (n 55) para 149.
63 ATA and others, Opinion of Advocate General Kokott (n 55) para 154.
64 Podgor, Ellen S, ‘Extraterritorial Criminal Jurisdiction: Replacing “Objective Territoriality” with “Defensive Territoriality”’ in Sarat, A and Ewick, P (eds), Studies in Law, Politics and Society, vol 28 (Amsterdam, JAI, 2003) 122 Google Scholar.
65 ATA and others, Opinion of Advocate General Kokott (n 55) para 147.
66 C 366/10 Air Transport Association of America, American Airlines Inc, Continental Airlines Inc, United Airlines Inc (ATA and others) v Secretary of State for Energy and Climate Change, Judgment of the Court (Grand Chamber), 21 December 2011.
67 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 124.
68 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 125.
69 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 128.
70 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 125.
71 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 129.
72 ATA and others, Judgment of the Court (Grand Chamber) (n 66) para 130.
73 See, eg, J Zerk, Extraterritorial Jurisdiction: Lessons for the Business and Human Rights Sphere from Six Regulatory Areas, Working Paper of the Corporate Social Responsibility Initiative (2010).
74 J Hartmann, The European Emissions Trading System and Extraterritorial Jurisdiction, EJIL:Talk!, 23 April 2012, available at www.ejiltalk.org/the-european-emissions-trading-system-and-extraterritorial-jurisdiction/#more-4847.
75 Jenning, R and Watts, A (eds), Oppenheim’s International Law, 9th edn (Harlow, Longman, 1992) 456 Google Scholar.
76 See generally, Mann, FA, The Doctrine of Jurisdiction in International Law, Hague Recueil des Cours 111 (1) (Leyden, Sijthoff, 1964) 73–81 Google Scholar and Mann, FA, ‘The Doctrine of Jurisdiction in International Law Revisited After Twenty Years’ (1984) 186(3) Hague Recueil des Cours 19 Google Scholar, 20–33 and 67–77.
77 SS ‘Lotus’ [1927] PCIJ Ser A No 10, at pp 18–19:
Far from laying down a general prohibition to the effect that States may not extend the application of their laws and the jurisdiction of their courts to persons, property and acts outside their territory, it leaves them in this respect a wide measure of discretion which is only limited in certain cases by prohibitive rules.
78 Lowe, V, ‘Jurisdiction’ in Evans, MD (ed), International Law, 2nd edn (Oxford, Oxford University Press, 2006) 335 and 342Google Scholar.
79 Hartmann, The European Emissions Trading System (n 74).
80 Higgins, R, Problems and Process (Oxford, Oxford University Press, 1994) 56 Google Scholar.
81 Simma, and Mueller, , ‘Exercise and the Limits of Jurisdiction’ (n 3) 136 Google Scholar.
82 Jurisprudence elaborating on the limits of jurisdiction includes: SS Lotus, Advisory Opinion, PCIJ (1927) Ser A No. 10, pp 4 and 23 (on flag state jurisdiction as ‘quasi-territorial jurisdiction’). More recently, courts have rules on the extra-territorial application of human rights treaties. See the European Court of Human Rights: Loizidou v Turkey (Judgment of 23 March 1995), Cyprus v Turkey (Judgment of 10 May 2001), Assanidze v Georgia (2004), Ilascu and others v Moldova and Russia (8 July 2004), Oecalan v Turkey (11 May 2005) and Issa v Turkey (2004), Al-Skeini and Others v the UK (7 July 2011) Al-Jedda v the UK (7 July 2011).
83 Simma, and Mueller, , ‘Exercise and the Limits of Jurisdiction’ (n 3) 147 Google Scholar.
84 Simma, and Mueller, , ‘Exercise and the Limits of Jurisdiction’ (n 3) 141 Google Scholar.
85 Simma, and Mueller, , ‘Exercise and the Limits of Jurisdiction’ (n 3) 137 Google Scholar.
86 IBA, Report of the Task Force on Extraterritorial Jurisdiction, available at www.ibanet.org, pp 11–13.
87 Ahlstroem v Commission (Wood Pulp) [1993] ECR I-1307, paras 15–18 and Case C-188/07 Commune de Mesquer [2008] ECR I-4501, paras 60–62.
88 United States: Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (1998), para 133.
89 Zerk, , Extraterritorial Jurisdiction (n 73) 176 Google Scholar.
90 United States: Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R (2012); United States: Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, also: US: Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (1996).
91 Zerk, , Extraterritorial Jurisdiction (n 73) 7 Google Scholar.
92 For an overview of the discussion: Gros, D et al, Climate Change and Trade: Taxing Carbon at the Border? (Brussels, CEPS, 2012)Google Scholar. Brandi, C, International Trade and Climate Change: Border Adjustment Measures and Developing Countries, Briefing Paper 11/2010 (Bonn, Deutsches Institut für Entwicklungspolitik/German Development Institute, 2010)Google Scholar. France has been an active proponent of a climate border measure. France’s most recent proposal of a ‘carbon inclusion mechanism’ can be found here: www.euractiv.com/sites/all/euractiv/files/climat%20-%20MIC%20-%20version%20anglaise%20%282%29.pdf.
93 See, eg, proposal for American Clean Energy and Security Act (ACES) HR 2454.
94 Dir 2008/101/EC, Preamble, para 16.
95 See, eg, the Inuit petition before the Inter-American Commission on Human Rights: Organization of American States, Inter-American Commission on Human Rights, Petition Seeking relief from Violations Resulting from Global Warming Caused by Acts and Omissions of the United States (2005); R Verheyen, Climate Damage and International Law: Prevention Duties and State Responsibilities (2005); Voigt, C, ‘State Responsibility for Climate Change Damages’ (2008) 77(2) Nordic Journal of International Law 1 CrossRefGoogle Scholar.
96 German Advisory Council on Global Change (WGBU), Climate Change as a Security Risk (Berlin, German Advisory Council on Global Change, 2007) 27.
97 S113/08, 14 March 2008, Climate Change and International Security, Paper from the High Representative and the European Commission to the European Council, 1.
98 Zerk, , Extraterritorial Jurisdiction (n 73) 186 Google Scholar.
99 P Higgins, Eradicating Ecocide: Laws and Governance to Stop the Destruction of the Planet (2010).
100 Voigt, , ‘State Responsibility for Climate Change Damages’ (n 95) 1 Google Scholar.
101 See for an overview, International Bar Association, Report of the Task Force on Extraterritorial Jurisdiction (London, IBA, 2009) 16.
102 The Council of Europe adopted a Convention for the Protection of the Environment through Criminal Law in 1998, which is not in force. See www.ec.europa.eu/environment/legal/crime/docs_en.htm.
103 Hartmann, The European Emissions Trading System (n 74).
104 Birnie, P, Boyle, A and Redgewell, C, International Law and the Environment, 3rd edn (Oxford, Oxford University Press, 2009) 333 Google Scholar.
105 ATA and others, Opinion of Advocate General Kokott (n 55) para 154.
106 ‘China Bars Airlines from EU Emissions Scheme’ Reuters (6 February 2012).
107 Joint Declaration, ICAO Working paper, Inclusion of International Civil Aviation in the European Union Emissions Trading Scheme (EU ETS) and its Impact (17 October 2011), App.
108 Joint Declaration of the Moscow Meeting on Inclusion of International Civil Aviation in the EU ETS, 22 February 2012.
109 HR 2594: European Union Emissions Trading Scheme Prohibition Act of 2011 (CS 1956). The Act gives the US Secretary of Transportation authority to prevent US airlines from complying with the EUETS.
110 Reuters (27 March 2012).
111 Reuters (28 March 2012).