The first carbon trade war? The EU vs. the world
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About This Event

Post Event Summary
The European Union (EU) has announced plans to levy a tax on airline emissions for all planes landing and taking off from EU airports. A panel of experts gathered at AEI on Thursday to discuss both the benefits and the drawbacks of this EU tax. Felix Leinemann of the EU Energy and Environment Section Delegation began by discussing the EU’s rationale for imposing such a tax. He explained that the aviation community has not reduced its emissions since 1990 — it has actually doubled them. This is troubling due to the fact that the aviation market is expected to increase its size by 100 percent by 2020 and has projections to grow by 300 percent by 2050.

Ken Green of AEI discussed airplane fuel emissions from a scientific point of view, and pointed out that an Emission Trading System (ETS) — a scheme that allows companies with extra emissions credit to trade those credits — hinges on the idea of a lower cost alternative. This “lower cost alternative” to reducing emissions, however, is in fact a higher cost solution with negative environmental tradeoffs.

Marc Busch of Georgetown University Law Center then discussed the retaliations by countries such as China and India, who have been told by their governments to refrain from participating in emissions tracking. He also claimed that the  ETS is likely not a viable system, pointing to the Bavarian ETS market, which will suspend trading on June 30 and which cannot be sustained in the future without radical political intervention to keep it afloat. 

Joshua Meltzer of the Brookings Institution took note of the issues non-EU countries have with the ETS. One of their many concerns is that EU countries do not have an obligation to direct the revenues generated by the system toward climate change purposes. Meltzer concluded that many non-EU countries are skeptical that the revenue generated will instead go towards paying off the debt of EU countries.

Event Description
The European Union (EU) has announced plans to levy a tax on airline emissions for all planes landing and taking off from EU airports. This tax would be calculated not only based on mileage flown in EU airspace but also for the entire length of the flight (thus, Chinese and Japanese airlines would be taxed for an entire journey from Beijing or Tokyo).

This EU action has produced a major backlash among countries in Asia, Europe, Africa, the Middle East and South America, with several nations threatening retaliation and boycotts. The U.S., however, is equivocating, hoping for a compromise that may not come. So far, EU officials are sticking to their guns, arguing that much of the reaction is mere bluffing. Join a panel of trade and environmental policy experts at AEI as they hash out these issues and frame potential outcomes.

Full video will be posted within 24 hours.  

Agenda

9:45 AM
Registration

10:00 AM
Panelists:
Marc L. Busch, Georgetown University
Kenneth P. Green, AEI
Felix Leinemann, Energy and Environment Section Delegation, European Union
Joshua Meltzer, Brookings Institution
 
Moderator:
Claude Barfield, AEI

12:00 PM
Adjournment

Event Contact Information

For more information, please contact Steffanie Hawkins at [email protected], 202.419.5212.

Media Contact Information

For media inquiries, please contact Véronique Rodman at [email protected], 202.862.4871.

Speaker Biographies

Claude Barfield, a former consultant to the office of the U.S. Trade Representative, researches international trade policy (including trade policy in China and East Asia), the World Trade Organization (WTO), intellectual property, and science and technology policy. His many books include “Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization” (AEI Press, 2001), in which he identifies challenges to the WTO and to the future of trade liberalization.

Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the School of Foreign Service and associate professor in the government department at Georgetown University. His research and teaching focus on international trade policy and law. He is the author of the book “Trade Warriors: States, Firms, and Strategic Trade Policy in High-Technology Competition” (Cambridge University Press, 1999), as well as articles in various academic journals. Busch was previously an associate professor at the Queen’s School of Business and an associate professor of government and social studies at Harvard University, where he was also the director of graduate student programs at the Weatherhead Center for International Affairs. He has been awarded numerous research grants and several teaching awards. Busch is also the co-editor of the journal Economics & Politics. He has worked with Booz Allen Hamilton, the International Centre for Trade and Sustainable Development, McKinsey, and the trade law division of the Department of Foreign Affairs and International Trade Canada.

Kenneth P. Green has studied energy and energy-related environmental policy for nearly 20 years. An environmental scientist and policy analyst by training, Green’s recent studies include the efficacy of green-jobs programs, drivers of oil and gas prices, the Deepwater Horizon oil spill, the embedded energy costs in consumer goods, and resilient policies to address the risks of climate change. He has just published his second supplemental textbook, “Abundant Energy,” a concise guide to energy and energy policy intended for a college audience. In addition, Green has testified before regulatory and legislative bodies at the local, state and federal levels, including many times before the U.S. House of Representatives and the U.S. Senate. He was also a designated expert reviewer for two reports by the United Nations Intergovernmental Panel on Climate Change.

Felix Leinemann joined the European Commission eight years ago, working on a variety of transport files ranging from inland waterway transport to maritime shipping, Galileo, intelligent transport systems, aviation, passenger rights and international affairs. Before joining the Delegation of the European Union to the USA as transport counselor in March 2012, he worked as a member of the cabinet of European Commission vice president Siim Kallas, and before that since 2010 as assistant to the director general for mobility and transport, a position in which he contributed strongly to the drafting of the European Commission’s 2011 white paper on transport. Before joining the European Commission, he worked as a lawyer in Germany and France as well as a legal adviser and advocacy officer in Brussels.

Joshua Meltzer is a fellow in the Global Economy and Development program at the Brookings Institution and an adjunct professor at the School for Advanced International Studies at John Hopkins University and at the Georgetown University Law School. He is an expert on international trade issues, including the WTO and free trade agreements and also focuses on the intersection between climate change and International trade law and policy. Previously, Meltzer was a diplomat at the Australian Embassy in Washington D.C., where he focused on trade, climate change and energy issues. Before his work at the embassy, he was a trade negotiator in Australia’s Department of Foreign Affairs and Trade.

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