EU ETS

The EU Emissions Trading System (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost effectively.  It is the first and biggest international scheme for greenhouse gas emission allowances.  The EU ETS covers roughly eleven thousand power stations and industrial stations in thirty countries.  The European Union Emissions Trading System was launched in 2005 and works on the "cap and trade" principle.  It limits the total amount in total emitting carbon dioxide (CO2).  By 2020 the emissions for international aviation are projected to be around seventy percent  higher than when the trading system started in 2005.

The United States and other countries are heavily opposed to this.  The reason being is the amount of taxes that's going to be paid while flying over their own airspace and not just into Europe.  Because of the EU ETS policy the Chinese government has threatened to have Chinese airlines from buying up to 45 Airbus aircraft.

President Obama closed the legislative loop on U.S. by signing the Senate Bill 1956 in refusal to comply with the European Union's Emissions Trading Scheme to prohibit U.S. aircraft operators from participating in the carbon tax plan.  Ed Bolen  CEO and president of National Business Aircraft Association (NBAA) stated that "this is an issue that should be rightfully handled with the framework of the International Civil Aviation Organization (ICAO).

By 2050 ICAO forecasts that emissions could grow further by three to seven hundred percent to what they normally are right now.  ICAO has made forward progress on regulating aircraft CO2 emissions.  ICAO has proposed four market based measures to reduce emissions.  The first proposed indication is global mandatory offsetting,  second is global offsetting that would include revenue generation through the sales of offsets,  third is emissions trading in a cap and trade system, and lastly emissions trading through a baseline and credit model.

From my perspective I think that a global solution is essential for reducing aircraft emissions.  Nevertheless, taxing other airlines and having them pay the consequence isn't the right resolution.  ICAO seems to have the resolution for the situation by innovating new sources to reduce CO2 emissions rather than global effecting the world.