THE AERIAL BATTLE OVER EUROPE

This week, the EU started the process of allocating 221 million tons of emission allowances, to be divided up by airlines depending on their traffic with Europe. The aim is to reduce emissions by about five percent over the coming eight years, a far slower decline than what's called for by the Kyoto Protocol. Eighty-five percent of the allowances are free; the remaining fifteen percent must be purchased, at a reigning carbon price of roughly $15/ton. In January, they'll have to start filing those allowances for every flight landing in or taking off from a European airport.

The carriers assert that the EU's directive violates principles of free navigation embodied in the Open Skies deal of 2007 that opened European and American air travel to competition, and the Chicago Convention, a longstanding bulwark of international travel rules.

This legal challenge pits the U.S. airlines against a vast coalition of countries, agencies, and environmental groups. That coalition includes the 27 member countries of the European Union, as well as Norway, Iceland and Switzerland (which collectively represent a far larger economy than the United States), the British Civil Aviation Authority (the case was originally filed in Britain, which has responsibility for U.S. carriers in the EU scheme), and an array of U.S. and European environmental organizations--including the Environmental Defense Fund, Earthjustice, and the World Wildlife Fund-UK.

Also going against the airlines are most European carriers, like British Airways and Air France, which have been living with the system already governing intra-European flights since January of this year, and have a clear interest in a more level playing field. Tim Johnson, director of the London-based Aviation and Environment Federation, another of the environmental groups supporting the EU, comments, "They want American carriers in the scheme so there will be no competitive disadvantage."

If we can ask the world to adopt our post-9/11 security rules, why can't Europe ask us to adopt their climate rules?

The battle lines are already being drawn. Sitting in the courtroom during oral arguments at the court last July were representatives from the United States, China and India, all of which have threatened retaliatory measures if the airlines lose. Over the same week of September 26th, when the EU announced its free emission allocations to the world's airlines-- United, American and Continental among them--representatives of the U.S. State Department and FAA were holding a meeting in Delhi with their Indian counterparts to develop a united front opposing the EU's initiative. Thus far, some twenty countries, including Brazil, Canada, Korea, Russia, South Africa, Saudi Arabia, Qatar, the Philippines and Paraguay have indicated they'd sign on to the U.S.-India coalition.

Meanwhile, in July, the U.S. House of Representatives passed a measure authored by Republican John Mica, Chair of the Transportation Committee, that would specifically prohibit U.S. carriers from complying with the EU's initiative--which, if passed by the Senate, would provide U.S. carriers with a no-win option of either complying with American or European law, but not both.

"If the airlines go to the mat on this," comments Gabriel Sanchez, a Senior Research Fellow at the International Aviation Law Institute at De Paul University in Chicago, "there's no longer going to be a 'law'-war, there's going to be a trade war."

WHO OWNS THE SKIES?

The airlines and the Obama administration assert that the proper place to apply airline greenhouse gas limits is at the UN's International Civil Aviation Organization, assigned responsibility for the issue by the Kyoto Protocol. The EU and its allies counter that its efforts to do so over the past decade have been repeatedly foiled by U.S. and industry pressure.

"Over and over, the U.S. has blocked efforts on emission limits at the International Civil Aviation Organization," says Annie Petsonk, who has participated with the legal defense of the EU as international counsel to the Environmental Defense Fund. "And the ICAO did essentially nothing. The EU got fed up with getting nowhere and said, 'Okay we're going to start to regulate'."

"If the airlines go to the mat on this, there's going to be a trade war."

The airlines now accuse Europe of trying to act as the airspace regulator of the entire world. At the Luxemburg court, the American carrier's lawyer conjured a hypothetical flight from San Francisco to London's Heathrow airport, the most popular destination for Europe-bound flights from the United States. Over the course of the flight, he told the court, 29% of the emissions take place in U.S. airspace; 37% in Canadian airspace; another 25% over the high seas; and just 9% in the airspace of Europe.

The EU responds that they're not regulating what airlines do in international airspace. Instead, they're asking airlines to deal with climate change if they want to utilize European airports. What's more, they've argued that the principle of extra-territoriality is a familiar one as applied by the United States.

After the Exxon Valdez oil spill, for example, the U.S. unilaterally declared that only double-hulled tankers would be permitted to dock at American ports (a move ultimately followed by the EU). Similarly, shortly after the terrorist attacks of September 11th, the U.S. demanded, and obtained, European compliance with a requirement that it submit the names of passengers embarking from European airports to U.S. Customs, and to impose security procedures for U.S. bound flights that mirror almost precisely the security at U.S. airports. Just as the United States determined that in the wake of 9/11, U.S. security precautions should be extended globally, the EU has determined that the urgency of climate change requires a similarly global response.

What happens in the airspace over the North Atlantic, and how the European Court of Justice handles the contribution that the greenhouse gases emitted there make to climate change, has in many ways become a stand-in for the airspace of the world--a distinction in the sky that is, of course, not a natural but diplomatic creation. When the world's diplomats convene in Durban in late November for another round of climate negotiations, they will most likely be contending with the European Union as the sole government demonstrating a sustained commitment to the global principles of the (about to expire) Kyoto Protocol. Few new global initiatives are expected, leaving individual governments to devise their own widely varying approaches to climate change. The dispute in Luxemburg could be the harbinger of tensions to come.