flights.jpgIn two days, on March 30th, the Open Skies agreement will come into effect. Airlines from the US and Europe are allowed to land in any airport on the two continents. But a trade row over carbon trading is looming on the ground.

Technically speaking, the new agreement deregulates the aviation industries of the US and Europe completely. Flight costs are meant to be lowered, airlines are meant to be open to foreign ownership and new flight routes between Europe and the US are meant to be created. But it ain’t happening. Apart from intensified activity between the UK’s Heathrow Airport and the New York airports perhaps. But the Open Skies targets are mostly obscured by cloudy skies for the time being. The Open Skies agreement is seriously undermined by disagreements over offsetting pollution.

Virgin Atlantic’s plans for the next two years highlight the problems clearly. The airline, which inaugurated the world’s first biofuel flight a few weeks back, recently announced at a news conference in New York that it hasn’t even made up its mind about any new flight routes. The wait is for the delivery of the Boeing Dreamer which it has ordered, but the company doesn’t feel any need to pressure the manufacturers to speed up. New destinations are not going to be picked for at least another two years, the New York reporters were told.

A row which is turning bitter has been brewing for the past months between US and EU officials. The Europeans say US officials including President Bush and Vice President Dick Cheney have no desire to really clear the skies. Jacques Barrot, the EU’s top airline official was quoted in the Guardian newspaper that the US is making ridiculous demands to the Europeans to hand over passenger lists, even of people that do not land on US soil. Security reasons and terrorism prevention is the reason cited, but Barrot made no secret of his suspicion that this is an attempt to sabotage the Open Skies deal and protect the US aviation industry.

Barrot threatened US airlines with an official ban on landing rights if they don’t start carbon trading plans. He hopes that a new US administration will change things. “[ ..] attitudes [in Congres] are changing. Particularly with Bush and Cheney gone, there is a real hope of things moving on. The new administration will be under pressure to take new measures,” Barrot was quoted as saying by the Guardian newspaper.

In the absence of political goodwill to get things moving, the finance industry’s efforts might be what will trigger the support for offsetting pollution by means of carbon trading. The industry’s financiers are hell bent on the European carbon emissions trading plans. Financial analysts are already beginning to incorporate these into their risk models of the airline industry. They say that public perception of pollution is a noticeable risk factor that should not be ignored. Ratings agency Moody’s has started to build a model to account for pollution offsetting.

George Godlin, a Moody’s analyst, said that the airline industry might become a bellwether model for other polluting industries, depending on the effectiveness of carbon trading.

The 27 nation European bloc recently adopted legislation mandating carbon emissions trading for the aviation industry. The deadline is set for 2011/2012 and individual countries are expected to pass the legislation by the end of this year. The Europeans have indicated they will open their trading scheme to US companies too, but US rules prohibit participation.

bio: Angelique van Engelen writes AmplifiedGreen, a blog about micro environment issues, macro perspectives.

Be Sociable, Share!