EU court upholds carbon trade plan for aviation

Amsterdam: U.S. airlines failed Wednesday to block an EU law charging airlines flying to Europe for their carbon pollution. The decision by an EU court was widely hailed by environmentalists but the Fitch ratings agency said it raised the spector of a global trade dispute.
The European Court of Justice in Luxembourg dismissed arguments that imposing the European Union's cap-and-trade carbon credits program on flights to and from European airports infringes on national sovereignty or violates international aviation treaties. U.S. and other non-European airlines had sued the EU, arguing that they were exempt from the law.
Environmentalists called the law a first step in controlling carbon emissions in a key economic sector, and EU officials said they expected airlines to comply.
But Fitch Ratings said the decision could deepen rather than quell the dispute, raised in a lawsuit brought by the trade organization Airlines for America and several U.S. airlines and supported by China, India and other countries with international carriers.
"We believe threats of trade retaliation over the EU's cap-and-trade system will pose growing threats to aviation market access in both developed and emerging markets next year," Fitch said.
21/12/11 CBS News.com

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Categories: Foreign Dec 2011