International aviation generates more than 3 percent of total global greenhouse gas emissions per year. This amount is relatively small but growing quickly, with worldwide aviation emissions projected to increase 300 percent to 700 percent by 2050. Until recently the sector faced no limits on these emissions. But starting this year, 2012, the European Union began regulating emissions from all flights to and from EU airports. Crucially, the European Union law covers both foreign and EU airlines and their emissions produced over their entire flight path, not just over EU airspace.
The new law, which is opposed by much of the aviation industry, has led to an ongoing legal and diplomatic conflict with the United States and other countries and threatens to trigger a trade war. Opponents contend that the law violates Europe’s international obligations and will substantially increase aviation costs. Supporters argue that the law is legal and will do little to harm airlines and could even benefit them in the short run. (We discuss the economic impacts in greater detail in our first Blue Skies Project report, “Is the Sky Falling for Airline Projects in the European Union?”)
Many U.S. airlines and the U.S. government have been leading opponents of the EU law. Three U.S. airlines and their trade association pursued legal claims against the EU that the European Court of Justice ultimately rejected in late 2011. The U.S. aviation industry is also calling on the federal government to challenge the EU law in international court. The U.S. government helped to convene two meetings (in Delhi, India and in Moscow) of opponents of the EU law and spearheaded a resolution in the International Civil Aviation Organization, or ICAO, declaring the EU law illegal.