http://online.wsj.com/article/SB10001424052702303763404576415811045381974.html?mod=googlenews_wsj

 

U.S. environmental groups are attacking the Obama administration's opposition to the European Union's plan to regulate greenhouse gas emissions from airplanes, arguing Washington is reneging on its commitment to fight global warming.

American diplomats last week for the first time presented EU officials with formal U.S. objections to the 27-country bloc's plan to regulate airline emissions at talks in Oslo. Under EU law, any airline operating to or from an EU airport after January 1 must participate in the bloc's cap-and-trade system.

The U.S. government and U.S. airlines contend the legislation shouldn't apply to U.S. carriers, arguing the EU lacks jurisdiction over foreign companies outside its borders. Other countries, including China and Russia, also oppose the EU program on sovereignty grounds.

A top EU court on Tuesday will hear a case brought by U.S. carriers through their trade group, arguing the EU regulation violates international law. Washington isn't a party to the suit at the European Court of Justice in Luxembourg, but opposes the EU law on grounds of jurisdiction, imprecision in the program's rules and other issues.

An administration official said U.S. in Oslo "clearly stated our strong objection to the plan," which the U.S. considers "the wrong way to pursue the right objective." The U.S. argues Europe should pursue its goals through the United Nations' aviation agency. EU officials have said work in the UN's International Civil Aviation Organization is moving too slowly and is insufficiently ambitious.

"It is not right that foreign carriers are charged by Europe for operating in their own airspace," said Joe Le Pochat, managing director for government affairs at AMR Corp.'s American Airlines, which backs the lawsuit. "Essentially, I'm charged for burning fuel on the ground in New York or Chicago."

Environmentalists say the U.S. government is helping airlines avoid responsibility. "The national sovereignty argument for a global problem really doesn't hold water," said Ilana Solomon, senior policy analyst at ActionAid USA, an antipoverty group that sees climate change as a threat to poor countries.

A spokesman for EU Climate Commissioner Connie Hedegaard said the regulation was vetted by European legal experts before passage and conforms to international norms. "The court will have the final word, but we knew what we were doing when we put this legislation in place," said the spokesman, Isaac Valero-Ladron.

Several U.S. nongovernmental organizations have joined the lawsuit on the EU's side and are attacking the U.S. stance. "We think that the EU law is fully consistent with international law," said Annie Petsonk, international counsel at the Environmental Defense Fund in Washington, one of the groups in the lawsuit.

The EU plan allows foreign countries to adopt "equivalent measures" to control airline emissions, but the U.S. government has avoided discussing these because doing so could legitimize the EU plan, say people familiar with the U.S. position.

Environmentalists say the EU's plan offers the U.S. a way to meet a commitment made by the administration of President Barack Obama in 2009 to cut U.S. greenhouse gas emissions by 17% in 2020 from 2005 levels and to help raise $100 billion annually by 2020 to fight global warming.

Under the EU plan, 15% of pollution credits for airlines will be auctioned off, potentially raising several hundred million dollars that could go toward the funding target. The other 85% of credits are being given without charge.

"The EU emissions trading scheme could help meet U.S. commitments," said Keya Chatterjee, director of international climate policy at the World Wildlife Fund in Washington, D.C. Ms. Chatterjee said that the Obama administration "has been vocal about tackling climate change, so it's unfortunate they seem to be missing this opportunity." WWF has also sided with the EU in the lawsuit.

U.S. diplomats in Oslo presented EU officials with a list of detailed questions about the airline-emissions program, including how equivalent measures would be assessed. EU officials replied foreign countries should propose their own measures, and the EU will assess them, according to people who were at the talks. Washington and U.S. airlines worry this approach lacks objectivity and one country's airlines could face tougher measures than others'.

In a sign of how acrimonious the fight is becoming, Airbus last week was forced to delay announcing a major order from China for ten of the company's A380 superjumbo jetliners, with a catalog value of almost $4 billion, because of the government's anger with the EU plan, according to people close to the deal. A Chinese order for 88 small Airbus jetliners announced Tuesday would probably have been larger if not for the dispute, said people familiar with the spat. Airbus is owned by European Aeronautic Defence & Space Co.