House Hearing on EU Emissions Trading

 

GA MEMO:    2011-101

 

This morning the House Transportation and Infrastructure Committee’s Subcommittee on Aviation held a hearing entitled, The European Union's Emissions Trading Scheme: A Violation of International Law.  One week ago, House Transportation and Infrastructure Committee Chairman John Mica (R-FL), Committee Ranking Member Nick Rahall (D-WV), Aviation Subcommittee Chairman Tom Petri (R-WI) and Aviation Subcommittee Ranking Member Jerry Costello (D-IL) introduced “European Union Emissions Trading Scheme Prohibition Act of 2011.” According to the bill sponsors, the bill is in direct response to E.U. plans to impose a costly fee on any civil aviation operators landing in or departing from E.U. airports in order to offset carbon emissions.  Beginning on January 1, 2012, all airlines would be forced to participate in the E.U.’s emissions scheme despite the objections of the United States Government and now Congress.

The legislation directs the Secretary of Transportation to prohibit U.S. aircraft operators from participating in the E.U.’s Emissions Trading Scheme (ETS).  The bill also instructs U.S. officials to negotiate or take any action necessary to ensure U.S. aviation operators are not penalized by any unilaterally imposed EU emissions trading scheme.

 

Opening Statements:

Subcommittee Chairman Tom Petri (R-WI) explained the impact of the EU emissions trading scheme on U.S. air carriers.  He said that the E.U. levying the scheme on U.S. based airlines is a violation of international law.  Chairman Petri added that the scheme would actually harm efforts to reduce carbon emissions because the funding collected would not be reinvested back into carbon reduction technology.  Chairman Petri noted that since the E.U. did not consult the U.S. in the development of their scheme, it is his opinion that Congress needs to take action which is why he joined his bipartisan colleagues in introducing legislation to address the issue.

Subcommittee Ranking Member Jerry Costello (D-IL) also said that the E.U. plan violates international law and U.S. sovereignty.   He said he was pleased to work in a bipartisan manner with his colleagues to introduce legislation to stop U.S. participation in the scheme and hoped to move the legislation very quickly.

Full Committee Chairman John Mica (R-FL) said that the top Committee leadership was united in moving the anti-E.U. scheme legislation very quickly.  He said the E.U.’s plan was appropriately named a “scheme.”  Chairman Mica promised that the legislation will be marked up by the full committee very soon and would go to the floor as soon as possible.  He said that he wants to send the message loud and clear that the U.S. is not going to support the E.U. scheme.

Witnesses:

Panel I:

Honorable Susan Kurland, Assistant Secretary for Aviation and International Affairs, U.S. Department of Transportation

Accompanied by the Honorable Julie Oettinger, Assistant Administrator for Policy, International Affairs and Environment, U.S. Federal Aviation Administration

Honorable Krishna R. Urs, Deputy Assistant Secretary for Transportation Affairs, U.S. Department of State

 

Panel II:

Ms. Nancy Young, Vice President, Environmental Affairs , Air Transport Association

Captain Lee Moak, President, Air Line Pilots Association International

Questions:

Panel I:

Subcommittee Chairman Petri asked about negotiations with the E.U.  Mr. Urs explained that the U.S. aviation industry has a very good track record with respect to decreasing emissions.  He said they explained that during the discussions with the E.U. in Norway.  Mr. Urs said that the E.U. has not had the same success.  He also said that they laid out their objections on legal and policy grounds to the representatives from the E.U.  He said market based measures should be the result of constructive negotiations with other countries.  And that has not happened in this instance.  Ms. Oettinger explained the FAA’s emission reduction program domestically.

Congressman Peter DeFazio (D-OR) asked if the U.S. has thought about going to the World Trade Organization (WTO) and filing a complaint.  Ms. Kurland said that DOT is considering a wide range of options and are taking the matter very seriously.  Ms. Kurland explained she could not comment in public on the strategy.  Congressman DeFazio strongly recommended filing a complaint with the WTO as soon as possible.  He also recommended assessing a charge on E.U. based airlines.

Congressman Frank LoBiondo (R-NJ) asked if the U.S. can oppose tariffs or other measures.  Ms. Kurland explained that DOT is in constant contact with their interagency contacts about different options.  She said that the agency does have authority to institute counter measures at the appropriate time. 

Panel II:

Subcommittee Chairman Petri asked the panelists to comment on how the airlines would change flights to Europe if the E.U. successfully implements its’ emissions plan.  Ms. Young said that it would take airline funding away from emissions technology. She said that the potential to change routing is a concern and said that that’s why there needs to be an international approach.  Captain Moak said that the emissions scheme is a tax that will cost jobs in the near term and the long term.

Ranking Member Costello said that climate change is a global problem that the E.U. should work with other countries to address.  He said that he hopes the Administration will continue to work to make sure that the E.U. plan is not implemented.