The PJ Tatler

EU's Controversial Carbon Tax Scheme Already Driving Airfares Skyward, But Obama Admin Has No Response

Here we go, probably the first of many international air fare hikes directly resulting from the EU’s carbon tax:

Johannesburg, 18 June 2012. South African Airways (SAA) is preparing to raise its fuel surcharge on flights to and from Europe by between 1.00 and 2.00 Euros per passenger on flights booked from 1 July 2012 in order to comply with the European Union’s Emissions Trading Scheme (EU ETS).

South Africa, along with the US, China, Russia, Australia and India, signaled its opposition to the EU ETS, in a treaty signed in Delhi last October and over the last few weeks urged the EU to negotiate changes which would make the scheme fair and transparent.

Among those countries opposing the tax scheme, a pair are taking action to stop it. Neither is the United States. Russia is punishing a European airline.

Russia has raised the stakes in the increasingly bitter dispute over the European Union’s imposition of its controversial emissions trading scheme (ETS) by refusing to grant new overflight rights to Finnair and abandoning a commitment to allowing new rights to be issued free of charge. The Russian government confirmed that it had deliberately singled out Finnair for punishment as an EU-based carrier and that it intends to punish other EU airlines in the same way—probably starting with Scandinavian Airline System…

And Red China  is seeing red, threatening to respond swiftly:

The head of a national airline body said Wednesday that China would respond in kind to any EU penalties, such as fines or impounding of aircraft. For their part, EU officials have been reluctant to state publicly what they would do to airlines that don’t comply with the rules. But pressure is growing for a compromise that avoids a trade war. Airbus is already complaining of retaliatory measures by China and other countries, which are suspending orders for aircraft. A tit-for-tat escalation would be a disaster for an industry that struggles to make a profit at the best of times, which certainly isn’t the situation in Europe today.

China and Russia are defending their national interests against an unfair taxation without representation. What is the world power that was founded on a tax revolt doing? A big fat lot of nothing.

Even Transportation Secretary Ray LaHood agrees, telling lawmakers at a recent Senate Commerce Committee hearing that he opposes the EU’s approach on both “legal and policy grounds.” According to Politico, Secretary LaHood also said that “[t]he Obama administration strongly opposes the European Union’s emissions trading system for airlines.” What LaHood could not say was whether or not the administration would support legislation addressing this matter.

The bill introduced in the Senate by John Thune is very similar to the bill passed in the House in that it would prevent Europe from forcing their emissions tax onto U.S. airlines. An endorsement from President Obama would surely help push the bill through the Senate and with his signature would become law.

President Obama loves to attack a “do nothing Congress,” but the House of Representatives has clearly acted on this issue. The administration needs to get off the sidelines and aid American employers in the airline industry by supporting The European Union Emissions Trading Scheme Prohibition Act.

But they’re not, even though it enjoys bi-partisan support and fighting a tax imposed on us by a foreign bunch of bureaucrats would surely be popular with the majority of Americans.

Decisive American action could prevent a trade war. How about just defending American sovereignty for once, Mr. President?