The looming trade war between Europe and what looks like the rest of the world over the carbon tax imposed by the European Union from January 1, 2012 is running into turbulent air pockets. The EU has said airlines flying to EU countries that refuse to pay this tax would be stopped from flying. This tax involves the purchase of permits by those who don’t fulfil carbon emission norms on takeoff and landing from those who have such permits and don’t need them. The EU’s aim is to cut pollution levels caused by aircraft on arrival and departure.
China on Monday unequivocally reiterated that it would not pay this tax; while India and several other countries like Brazil, Australia and even the United States have also decided not to pay it. The tax is said to be exorbitant and will add a further burden on airlines that are already fighting for survival. The Montreal-based International Air Transport Association is against the tax, which it has dubbed as “unilateral, extra-territorial and market-distorting”, and declared it “is not the way forward.” The IATA has asked the EU to arrive at a consensus on this matter by discussing it through the International Civil Aviation Organisation.
It will be interesting to see if the EU’s desire to be seen as the leader of the “green” movement rides roughshod over global opinion. If it’s the latter, there could soon be a full-fledged trade war between the EU vs the Rest. And it’s not even cricket!