EU climate change unilateralism

European Journal of International Law

Volumn 23, Issue 2, 2012, Pages 469-494

  Scott, Joanne ^a   Rajamani, Lavanya ^b  

^a UNIVERSITY COLLEGE LONDON   (United Kingdom)

^b CENTRE FOR POLICY RESEARCH   (India)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84864527871     PISSN: 09385428     EISSN: 14643596     Source Type: Journal    
DOI: 10.1093/ejil/chs020     Document Type: Article

References (100)

1. In EU scholarship and policy discussions, the concept of a 'third country' is frequently used. Although its meaning is not immediately apparent, it has become a useful shorthand to refer to countries which are not Member States of the EU. For the sake of convenience, we will use this terminology here.
2. See Dir. 2003/87 (as amended). A consolidated version of this directive is available at: 2012).http://ec.europa. eu/clima/policies/ets/documentation_en.htm
3. See in particular Keohane and Victor, 'The Regime Complex for Climate Change', 9 Perspectives on Politics (2011) 7. For a broader discussion of unilateralism in environmental law see Shaffer and Bodansky, 'Transnationalism and Unilateralism in Environmental Law',1 Transnat'l Environmental L (2012) 31-31
4. A penalty of €100 per tonne of carbon dioxide will be incurred by airlines that fail to surrender the necessary allowances. The operator will still be required to surrender allowances to cover those emissions the following year. Where an operator fails to comply with the requirements of the directive and where other enforcement measures have failed, an operating ban may be imposed by the Commission on the airline concerned.
5. See Statement of Nancy N. Young, Vice President of Environmental Affairs, Air Transport Association of America, Inc. (ATA) before the Subcommittee on Aviation of the House Transportation and Infrastructure Committee, 'The European Union's Emissions Trading Scheme: A Violation of International Law' (27 July 2011), at 4-5, available at: republicans.transportation.house.gov/Media/ file/TestimonyAviation/2011-07-27-%20Young.pdf (accessed 24 Feb. 2012).
6. See 'Written Statement of Reservation by Belgium on behalf of the EU, its 27 Member States, and the 17 Other States Members of the European Civil Aviation Conference on Resolution A37-17/2: Consolidated Statement of continuing ICAO policies and practices related to (accessed 24 Feb. ). At the time of writing no exemptions have been granted, though the Commission is said to be in discussions with Australia as a result of its recent adoption of a carbon tax. environmental protection - Climate Change', available at: http://legacy.icao.int/icao/en/assembl/A37/Docs/10_reservations_ en.pdf 2012
7. The Clean Development Mechanism was set up by Art. 12 of the Kyoto Protocol, to allow countries assuming emission reduction commitments to earn carbon offsets (CERs) by investing in emissions reduction projects in developing countries: see Kyoto Protocol to the UN Framework Convention on ClimateChange, 10 Dec. 1997, 37 ILM (1998) 22 (hereinafter 'Kyoto Protocol'). The CDM was integrated into the ETS by way of a 'linking directive'. See Dir. 2004/101 OJ (2004) L 338/61 amending Dir. 2003/87.1997
8. Carbon leakage occurs when there is an increase in emissions in one country as a result of steps taken to reduce emissions in another country. The EU Emissions Trading Directive includes a threshold for assessing whether a sector or subsector is exposed to a significant risk of carbon leakage. This is based on calculating ETS-driven increases in production costs and intensity of trade with third countries. See Art. 10a(14)-(17).
9. The list of relevant sectors drawn up by the Commission covers around one-quarter of the emissions included in the ETS and around 77% of total EU emissions from the manufacturing sector. See Commission Dec. 2009/2 (as amended), OJ L 1/10, determining a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage.(2009)
10. For sectoral agreements to be taken into account in this way, they must be monitorable, verifiable, and subject to mandatory enforcement arrangements.
11. For a discussion see Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, and the Committee of the Regions, Analysis of options to move beyond 20% greenhouse gas emission reductions and assessing the risk of carbon leakage, COM(2010)265 final (26 May 2010).
12. For the relevant documents see: (accessed 24 Feb. 2012). Emissions trading is just one of the four options outlined in the consultation questions.http://ec.europa.eu/clima/news/articles/news_2012011901_en.htm2012
13. See Roadmap: Measures to include maritime transport emissions in the EU'sgreenhouse gas reduction commitment if no international rules agreed, Version 2, 1, available at: (accessed 24 Feb. 2012). For a good discussion of the many issues arising see Faber et al., 'Technical Support for European3 Action to Reducing Greenhouse Gas Emissions from Maritime Transport', CE Delft (Dec. ).http://ec.europa.eu/governance/ impact/planned_ia/docs/2012_clima_001_greenhouse_maritime_transport_en.pdf2009
14. See Finnemore and Sikkink, 'International Norm Dynamics and Political Change', 52 Int'l Org (1998) 887
15. Elsewhere, one of us used the concept of a 'regulatory penalty default' to capture this idea. See Scott, 'The Multi-Level Governance of Climate Change', 1 Carbon and Climate L Re (2011) 25, at 27-33
16. Heal and Kunreuther, 'Tipping Climate Negotiations', National Bureau (accessed 24 Feb. of Economic Research, Working Paper 16954 (Apr. 2011), available at: www.nber.org/papers/w169542012).
17. Case C-366/10, The Air Transport Association of America, American Airlines, Inc., Continental Airlines, Inc., United Airlines, Inc. v. The Secretary of State for Energy and Climate Change, judgment of 21 Dec. , not yet reported.2011
18. The Aviation Law Prof Blog is a very good place to keep up to date with developments. See: http://law professors.typepad.com/aviation/.
19. A number of environmental groups intervened on behalf of the EU in the case pending before the ECJ. These included WWF-UK, the European Federation for Transport and Environment, and the US Environmental Defense Fund and Earthjustice. Jake Schmidt of NRDC has been active in blogging in (accessed 24 Feb. ). favour of the EU's aviation decision. See: http://switchboard.nrdc.org/blogs/jschmidt/2012
20. For the most recent expression of this opposition and for a list of possible measures see the 'Joint Declaration of the Moscow Meeting on Inclusion of International Civil Aviation in the EU-ETS' adopted on 22 Feb. 2012
21. This was endorsed by 23 countries, and among the possible retaliatory measures contemplated is the possibility of launching legal action in ICAO or the WTO and of third countries adopting legislation prohibiting airlines from participating in the EU-ETS. It has been reported that the Chinese State Council has prohibited Chinese airlines from participating in the ETS without government appr (accessed 24 Feb. oval and that the airlines may not use the ETS as a reason to raise their fares. See Buckley, 'China Joins Airlines from Joining EU Emissions Scheme' (6 Feb. 2012), available at: www.reuters.com/article/2012/02/06/ us-china-eu-emissions-idUSTRE81500V201202062012).
22. European Union Emissions Trading Scheme Prohibition Act 2011 (H.R. 2494) passed on 24 Oct. 2011. The EU has previously adopted 'blocking statutes' to guard against the extra-territorial ffects of US legislation, most notably the Helms-Burton Act. See Huber, 'The Helms-Burton locking Statute of the European Union', 6 Fordham Int'l LJ (1996) 699.
23. 'Statement by CATA on Inclusion of International Aviation in the EU ETS', available (accessed 24 Feb. at: www.wcarn. com/list/13/13140.html 2012).
24. Proposals by India for inclusion of additional agenda items in the provisional agenda of the seventeenth session of the Conference of the Parties, FCCC/CP/2011/INF.2/Add.1 (7 Oct. ), at 6.2011
25. The UK Committee on Climate Change, 'International Aviation', available at: (accessed 24 Feb. www.theccc.org.uk/topics/ international-action-on-climate-change/international-aviation 2012).
26. See ICAO, Res A37/19, Consolidated statement of continuing ICAO policies and practices related to environmental protection - Climate change, for a taste of the limited progress so far. This provides that states and international organizations will work through ICAO to achieve a global average fuel efficiency improvement of 2% per annum but it is based entirely on voluntary contributions by states. The EU has entered a reservation in relation to this, stating that ICAO's 'aspirational goal' is insufficiently stringent and reiterating the EU's goal of achieving a global reduction in aviation emissions of 10% by 2020 comparedwith 2005.
27. Faber and Brinke, 'The Inclusion of Aviation in the EU Emissions Trading Scheme: An Economic and Environmental Assessment', ICTSD, Issue Paper No. 5 (Sept. ), at 9. Note that this is the emission reduction in the ETS as a whole, and it is largely caused by aviation buying allowances from other sectors.2011
28. These figures were produced by Thomson Reuters Point Carbon and assume a carbon allowance price of €12 per tonne. 85% of allowances will be issued free of charge but the allocation to individual airlines will depend upon the level of their historic emissions in 2004-2006. It is anticipated that larger European flag carriers with substantial long-haul networks will receive around 81% of the allowances they need free of charge in 2012. This compares with 63% in the case of Chinese airlines and 64% for US airlines. Nonetheless, it is suggested that the 27 flag carriers in the EU will receive, on average, 61% of the allowances they need free of charge in 2012. Dedicated freight carriers may receive 52% of their needs free in 2012. See 'Cost for airlines of joining EU ETS €1.1bn in 2012, says Thomson Reuters Point Carbon', Point Carbon, available at: (accessed 24 Feb. 2012).www.pointcarbon.com/aboutus/pressroom/pressreleases/1.1583811
29. In order to exempt flights departing from a particular third country, the Commission will be required to act on the basis of a regulatory committee with scrutiny procedure. Thus the Commission will be overseen by a committee comprising Member States' representatives and a decision proposed by the Commission may be blocked by either the European Parliament or the Council of Ministers:
30. Art. 25a(2) of the same directive goes on to provide that if an agreement on global measures to reduce international aviation emissions is achieved, the Commission shall consider whether amendments to the directive are required. Any amendments would have to be adopted in accordance with the procedure laid down in Art. 192(2) TFEU.
31. The idea of a system-boundary in this setting is drawn from Peters, 'From Production-Based to Consumption-Based National Emission Inventories', 65 Ecological Economics (2008) 13.
32. This is by no means uncontested. There is increasing pressure to integrate an element of consumptionbased accounting into climate change. See, e.g., Davis and Caldeira, 'Consumption-based Accounting of CO2 Emissions', 107 Proc Nat'l Acad Sciences (2010) 5687.
33. It is readily apparent that a production-based system boundary is not adequate in relation to aviation as many emissions are generated in areas which are not subject to the jurisdiction of any state, e.g., over the High Seas.
34. The ECJ observed at para. 125 that the Aviation Directive does not infringe the principle of territoriality because the aircraft covered are physically present in the territory of one of the EU Member States. It also stressed (para. 129) that the EU can take steps to regulate within its territory even where the activity causing effects within its territory originates in an event that occurs partly outside. This is a crucial point. It reminds us that from the perspective of the EU, the fact that a flight lands in or takes off from an EU airport is relevant not only from the point of view of its enforcement jurisdiction, but from the point of view of its legislative or prescriptive jurisdiction as well.
35. These terms are taken from Wai, 'Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization', 40 Columbia J Int'l L (2002) 209.
36. UN Framework Convention on Climate Change, 29 May 1992, 31 ILM (hereinafter ) 849'FCCC').1992
37. See, e.g., Dec. 1/CP.8, 'Delhi Ministerial Declaration on Climate Change and Sustainable Development', in FCCC/CP/2002/7/Add.1 (28 Mar. ), and Dec. 1/CP.13, 'Bali Action Plan', in FCCC/CP/2007/6/ Add.1 (14 Mar. 2008) (hereinafter 'Bali Action Plan').2003
38. Dec. 1/CP.1, 'Berlin Mandate: Review of Adequacy of Articles 4, paragraph 2, sub-paragraph (a) and (b) of the Convention, including proposals related to a Protocol and decisions on follow-up', in FCCC/ CP/1995/7/Add.1 (6 June ) (hereinafter 'The Berlin Mandate').1995
39. Principle 7, Rio Declaration on Environment and Development, in Report of the UN Conference on Environment and Development, Rio de Janeiro, 3-14 June 1992, A/CONF.151/26 (1992), i, 31 ILM (1992) 874.
40. P. Birnie, A. Boyle, and C. Redgwell, International Law &the Environment (3rd edn, 2009), at 135.
41. For a recent analysis of differing applications of CBDRRC suggested by Parties see Rajamani, 'The Reach and Limits of the Principle of Common but Differentiated Responsibilities and Respective Capabilities in the Climate Change Regime', in N.K. Dubash (ed.), Handbook of Climate Change and India: Development, Politics and Governance (2011), at 118.
42. UN Framework Convention on Biological Diversity, 2 June 1992, 31 ILM (1992) 818.
43. Procedures and Mechanisms Relating to Compliance under the Kyoto Protocol, in FCCC/ CP/2001/13/Add.3 (21 Jan. 2002).
44. Russia and Japan have formally indicated their intention not to assume targets under the Kyoto Protocol's second commitment period: see Letter to Ms C Figueres, Executive Secretary of the UNFCCC, from the Head of Roshydromet, National Climate Change Coordinator, The Russian Federation, 8 Dec. 2010, available at: http://unfccc.int/files/meetings/cop_15/copenhagen_accord/application/pdf/russianfederation_cph10.pdf2012)
45. C Figueres, Executive Secretary of the UNFCCC, from the Japanese Ambassador for (accessed 24 Feb. COP16 of the UNFCCC, 10 Dec. 2010, available at: http:// unfccc.int/files/meetings/ad_hoc_working_groups/kp/application/pdf/japan_awgkp15.pdf 2012)
46. Canada has formally withdrawn from the Kyoto Protocol: see Canada: Withdrawal, Kyoto Protocol to the UN Framework Convention on Climate Change, CN796.2011.TREATIES-1 (Depositary Notification), 16 Dec. 2011, available at: http://unfccc.int/files/kyoto_protocol/background/application/pdf/canada.pdf.pdf2012).
47. Dec. 2/CP.15, 'Copenhagen Accord', in FCCC/CP/2009/11/Add.1 (30 Mar. ) (hereinafter 'Copenhagen Accord').2010
48. The Cancun Agreements, 2010, comprise Dec. 1/CP.16, 'The Cancun Agreements: Outcome of the work of the Ad Hoc Working Group on long-term Cooperative Action under the Convention', in FCCC/ CP/2010/7/Add.1 (15 Mar. 2011)
49. And, Dec. 1/CMP.6, 'The Cancun Agreements: Outcome of the work of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol at its fifteenth session', in FCCC/KP/CMP/2010/12/Add.1 (15 Mar. 2011).
50. Dec. 1/CP.17, 'Establishment of an Ad Hoc Working Group on a Durban Platform for Enhanced Action', in FCCC/CP/2011/9/Add.1 (15 Mar. ) (hereinafter 'The Durban Platform').2012
51. Rajamani, 'The Durban Platform &the Future of the Climate Regime', 61 Int'l &Comp LQ (2012) 1.
52. Report of the Secretary-General's High Level Advisory Group on Climate Change Financing, 5 Nov. 2010, available at: /www.un.org/wcm/content/site/climatechange/pages/financeadvisorygroup (accessed 24 Feb. 2012). The notion of 'no net incidence' on developing countries has been considered by parties. It was articulated in an early draft of the Durban - LCA decision, 2011, but did not survive in the final decision: see Update of the amalgamation of draft texts in preparation of a comprehensive and balanced3 outcome to be presented to the Conference of the Parties for adoption at its seventeenth session, FCCC/ AWGLCA/2011/CRP.38 (7 Dec. 2011), at 40, available at: Unfccc.int/resource/docs/2011/awglca14/eng/crp38.pdf 2012).
53. Commission of the European Communities, 'Impact Assessment of the inclusion of aviation activities in the scheme for greenhouse gas emission allowance trading within the Community', SEC(2006)1684 (20 Dec. ) (hereinafter 'Final Impact Assessment'), at 52.2006
54. Presentation by A. Runge-Metzger, Aviation and Emissions Trading, ICAO Council Briefing (accessed 24 Feb. (29 Sept. 2011), at 40, available at: http://ec.europa.eu/clima/policies/transport/aviation/docs/presentation_ icao_en.pdf 2012).
55. The EU seems to accept that the principle of CBDRRC would remain applicable even where developing countries regulate business activity directly by setting or agreeing to a sectoral emissions baseline in the context of a Sectoral Crediting Mechanism. The EU stresses that higher capability developing countries would be expected to set more ambitious sectoral baselines, and that this would be in accordance with the principle of CBDRRC: see Ad Hoc Working Group on Long-term Cooperative Action (AWG-LCA),'Views on the Elaboration of Market-Based Mechanisms', Submissions by Hungary and the European Commission on behalf of the EU and its Member States, in FCCC/AWGLCA/2011/MISC.2 (21 Mar. 2011), at 48-55.
56. This is a point emphasized by the European Commission in its presentation on the Aviation Directive
57. There is no possibility for flights departing from the EU to be exempted from the scheme. As previously discussed, the EU's system boundary places primary responsibility for international aviation emissions on the departure state.
58. See Commission of the European Communities, Proposal for a Directive of the European Parliament and of the Council amending Dir. 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, COM(2006)818 (20 Dec. 2006), at 21.
59. See Commission of the European Communities, Communication from the Commission to the European Parliament pursuant to the second subpara. of Art. 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council amending Dir. /87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, COM(2008)221final (22 Apr. 2008) where it is observed that '[t]he Commission's proposal provides for flights arriving from third countries to be exempt if they are covered by equivalent measures in those countries. The Council's common position provides for a more flexible approach to finding the best option to ensure interaction between the Community scheme and measures taken in a third country. The Commission supports this approach' (emphasis added), at 4.2003
60. Case C-162/97, Criminal proceedings against Gunnar Nilsson, Per Olov Hagelgren and Solweig Arrborn ECR I-07477, at para. 54.[1998]
61. Case 215/88, Casa Fleischhandel v. Bundesanstalt für Landwirtschaftliche Marktordung [1989] ECR 2789, at para. 31. The ECJ emphasized that nonetheless the preamble could not itself constitute a rule not contained in the main body of the legislation. Note that the reference to equivalence appears in other language versions of the dir. as well, including at least the French, Italian, Spanish, and German versions.
62. See Ms. Hedegaard's answer to a written question (P-005387/2011 posed by Holger Krahmer) on aviation in the European emissions trading scheme at: (accessed 24 Feb. 2012). Recall again though the ambiguity inherent in the current directive on this point. We will argue below that the EU should exploit the extra flexibility that the exclusion of equivalence from the main body of the directive provides.www.asd-europe.org/site/fileadmin/user_upload/ news/EU_news_150711a.pdf
63. Note that the analysis is based upon a scenario of including only EU-departing flights in the ETS, whereas both departing and arriving flights have been included.
64. This would depend upon the volume of allowances to be auctioned and the price of allowances. The comparable figure for the Far East, which includes both China and Japan, was between €8 million and €151 million.
65. Standard &Poor's, 'Airline carbon costs take off as EU emissions regulations reach for the skies' (18 Feb. 2011), at 2, available at: (accessed 24 Feb. 2012).www.environmental-finance.com/download.php?files/pdf/4d663c478efb8/Airline%20Carbon%20Costs%20take%20Off.pdf
66. This exempts flights performed by a commercial air transport operator who operates either fewer than 343 flights per period for three consecutive four-month periods or with total annual emissions lower than 10,000 tonnes per year.
67. Müller, 'From Confrontation to Collaboration?, CBDR and the EU-ETS Aviation Dispute with Developing Countries', Oxford Energy and Environment Brief (Feb. ), at 14, available at: www.oxfordenergy. org/2012/03/from-confrontation-to-collaboration-cbdr-and-the-eu-ets-aviation-dispute-with-developing- countries/ (accessed 24 Feb. 2012). Here, Müller is using the concept of relative capabilityand defining it in terms of relative wealth as measured by GDP. Müller also introduces the concept of absolute capability which is determined by the overall size of the economy and the number of people with less than $ 2 per day. He argues that both types of capability should be viewed as relevant in operationalizing the principle of CBDRRC.2012
68. While his analysis is very valuable, it does not alter the basic fact that because the EU does not accept that CBDRRC is relevant in this setting, no mechanism is in place to evaluate the compatibility of the Aviation Dir. with this principle or to design/adjust the functioning of the system to ensure respect.
69. Greenpeace India, 'Hiding Behind the Poor: A Report by Greenpeace on Climate Injustice (accessed 24 Feb., available at: www.greenpeace.org/india/Global/india/report/2007/11/hiding-behind-the-poor.pdf 2012
70. The carbon emissions of even the wealthiest top 1% in India were at this time just below the global per capita average of 5 tonnes. In , per capita EU emissions were 8.8 tonnes while India's per capita emissions were 1.3 tonnes2007
71. Commission Staff Working Document, Annex to the Communication from the Commission 'Reducing the Climate Change Impact of Aviation', Impact Assessment, SEC1184 (27 Sept. 2009), at 37.(2005)
72. For a study showing the development benefits of air freight in relation to African horticultural trade see Garside, MacGregor, and Vorley, 'Review of Food Miles, Carbon and (accessed 24 Feb. African Horticulture: Environmental and Developmental Issues', COLEACP (Comité de Liaison Europe-Afrique-Caraïbes-Pacifique) (undated), available at: http:// pip.coleacp.org/files/documents/PIP%20food%20miles%20report%20for%20web.pdf 2012).
73. ICAO estimates that $ 100 spent on air transport produces benefits worth $ 325 for the economy and 100 additional jobs in air transport result in 610 new economy wide jobs, as cited in 'Strategic Plan: 2010-2015', Ministry of Civil Aviation, Government of India, New Delhi, available at: , at 2 (accessed 24 Feb. 2012).http://civilaviation. gov.in/cs/groups/public/documents/newsandupdates/moca_000783.pdf
74. As will become clear, we are not proposing the a priori exclusion of developing country flights from the ETS. Nor are we proposing that developing country airlines be accorded more generous access to Clean Development Mechanism Certified Emissions Reductions (CERs). The current limits on access for the aviation sector are set out in Art. 11a and especially Art. 11a(8). This provides that the overall use of credits shall not exceed 50% of the Community-wide reductions below the levels of new sectors and aviation over the period from the date of their inclusion in the Community scheme to 2020.2005
75. Such as Kuwait, United Arab Emirates, Brunei, Singapore, and Qatar which are among the top 20 richest countries in the world, and Mexico, South Korea, and Chile which are members of the OECD.
76. Needless to say, the EU should take account of any amendments to the relevant Annexes. E.g., Malta has recently been added to the list of Annex I countries as a result of its accession to the EU
77. Emphasis upon the capability limb of CBDRRC is also a reflection of the fact that Art. 4(7) of the FCCC recognizes that poverty eradication and socio-economic development are overriding priorities for developing countries. The World Bank classifies countries according to income group. The groups are: low income, $ 1,005 or less; lower middle income, $ 1,006-$ 3,975; upper middle income, $ 3,976-$ 12,275; and high income, $ 12,276 or more. The classifications are updated on 1 July each year. These classifications could be useful in reducing the complexity of differentiation of this kind.
78. Müller, Höhne, and Ellermann, 'Differentiating (Historic) Responsibilities for Climate Change', Summary Report (Oct. (accessed 24 Feb. 2007)www.oxfordclimatepolicy.org/publications/documents/ DifferentiatingResponsibility.pdf 2012)
79. In their submissions to the FCCC various countries have suggested indicative 'objective' criteria including:GDP per capita, see Submission of Australia, in FCCC/AWGLCA/2008/MISC.1/Add.2 (2 Mar. 2008), at 8; Submission of Japan, in FCCC/AWGLCA/2008/MISC.2 (14 Aug. 2008), at 16; Submission of Turkey, in FCCC/AWGLCA/2008/MISC.5/Add.2 (Pt II) (10 Dec. 200868
80. Relative rates of economic and population growth, stage of economic development, structuring of economies' emissions, recognition of gional realities and interdependencies, relative mitigation potential, and costs over time: see Submissions of Canada, in FCCC/AWGLCA/2008/MISC.1/Add.2 (20 Mar. 2008), at 10
81. OECD membership, stages of economic development, capacity to respond, and emission share in the world: see Submission of Japan, in FCCC/AWGLCA/2008/MISC.1/Add.1 (12 Mar. 2008), at 11, and in FCCC/AWGLCA/2008/MISC.2 (14 Aug. 2008), at 16
82. As noted, the EU would have to make some sensitive choices about the criteria to be applied. Singapore's emissions were higher than the EU's in 1980 but significantly lower than the EU's in 1960.
83. National treatment requires the equal treatment of domestic goods or operators as compared to foreign goods or operators. For a clear expression of this principle see General Agreement on Tariffs and Trade (GATT) , Art. III. For a general discussion of discrimination and other aspects of WTO law in relation to the Aviation Directive see Bartels'contribution to this volume.1947
84. MFN-type discrimination is concerned with differences in the treatment of foreign goods and services originating in different countries. For one example see Art. I.I, GATT.
85. European Communities - Conditions for the Granting of Tariff Preferences to Developing Countries, Report of the Appellate Body, AB-2004-1, WT/DS246/AB/R (7 Apr. 2004).
86. It is worth noting here that the Aviation Dir. is characterized by a lack of transparency in that there is ambiguity surrounding the applicable benchmark for exemption. Also, if exemption is to depend upon the third country in question taking measures with an environmental effect at least equivalent to the EU, then it is necessary for the EU to set out precisely what the extent of the environmental effect of the Aviation Directive is anticipated to be.
87. Lyle, 'Kyoto v. Chicago: ICAO Debates on How to Apply the Principle of Common but (accessed 24 Feb. Differentiated Responsibilities to Aviation', available at: www.greenaironline.com/news.php?viewStory=450 2012).
88. Appendix 3. For a discussion see: P. Forsyth, Competition and Predation in Aviation Markets (2005), at 64.
89. For a discussion of this and of the parallels between the regulation of noise and emissions see ICAO, 'Review of Aviation Emissions Related Activities within ICAO and Internationally: Parallels between Noise and CO2 Environmental Goals', (GIACC/3-IP/1- 7/01/09), (accessed 24 Feb, available at: http://legacy.icao.int/icao/ en/atb/meetings/GIACC/2009/Giacc_3/Docs/Giacc3_ip01_en.pdf 2012).
90. 'A study of an essential service and tourism development route scheme', available at http://legacy.icao. int/icao/en/atb/epm/ecp/EssentialServicesStudy_en.pdf2012).
91. He also notes that a route-based approach forms the basis of proposals on CBDR(RC) put forward by the Association of European Airlines and the Aviation Global Deal Group.
92. This is by no means inevitable, given that while the concept was included in the main body of the Commission's original proposal for a directive, it was removed from it by the EU legislature in the final version. As noted previously, the only reference that remains is included in the directive's preamble.
93. US - Import Prohibition on Certain Shrimp and Shrimp Products, Report of the Appellate Body, AB-1998-4, WT/DS58/AB/R. See especially para. 165, where the Appellate Body observed that '[w]e believe that discrimination results not only when countries in which the same conditions prevail are differently treated, but also when the application of the measure at issue does not allow for any inquiry into the appropriateness of the regulatory program for the conditions prevailing in those exporting countries.'
94. We will frame our proposal narrowly in a bid to overcome political objections to the general idea of requiring ETS revenues to be used to tackle climate change. However, we would favour broader hypothecation of ETS-generated revenues to tackle climate change mitigation and adaptation in developing countries. The UK government is opposed to hypothecation of ETS revenues. Note, however, that the Confederation of British Industry and other business leaders have called on the UK to use proceeds to tackle climatechange: see Murray, 'CBI calls for carbon credit cash to be ring fenced', available at: / (accessed 24 Feb. 2012). The EU Council recently reiterated at its 3148th meeting (Press Release of 21 Feb. 2012) that carbon pricing of international aviation and maritime transport has the potential to generate large revenue flows, and invited the Commission to prepare a reflection paper by June on carbon pricing of this kind, taking international developments into account. It is not clear whether the reference to revenue flows is to global market-based measures or to the EU emissions trading scheme as well.www.businessgreen. com/bg/news/1802048/cbi-calls-carbon-credit-cash-ring-fenced2012
95. See the Dec. 3/CP.17, 'Launching the Green Climate Fund', in FCCC/CP/2011/9/Add.1 (15 Mar. 2012).
96. Recall that, at present, Member States have no obligation to hypothecate revenues in this way. The directive merely provides that they should use the revenues to tackle climate change in the EU and in third countries.
97. A total exemption for developing country flights would undermine the capacity of EU unilateral action to perform a catalyst function in promoting climate action internationally or on the part of third countries. Also, contrast our proposal with the maritime rebate proposal put forward by the International Maritime Emission Reduction Scheme (IMERS). See Stochniol, 'Optimal Rebate Key for an Equitabl Maritime Emission Reduction Scheme' (May 2011), available at: www.imers.org/docs/rebateKey.pdf (accessed 24 Feb. 2012). For a more recent argument in favour of special treatment for developing countries in the context of international market-based mechanisms for aviation and shipping see Keen, Perry, and Strand, 'Market-Based Instruments for International Aviation and Shipping as a Source of Climate Finance', World Bank Policy Research Working Paper Series No. 5950 (Jan. ), available at: (accessed 24 Feb. 2012). Here it is suggested that '[d]eveloping countries ought to be able to keep their own tax revenue, and additional compensation to them for the economic burdens of these carbon charges may be warranted'. Our proposal is driven by a desire to find a way of preserving the catalyst function of EU contingent unilateralism, while respecting the principle of CBDRRC.wwwworldbank.org/external/default/WDSContentServer/WDSP/IB/2012/01/17/000158349_20120 117140509/Rendered/PDF/WPS5950.pdf2012
98. For the Commission's original proposal see COM818 final. Art. 3c(4) states that the revenues shall be used to mitigate greenhouse gas emissions, to adapt to the impacts of climate change, to fund research and development for mitigation and adaptation, and to cover the costs incurred by Member States in administering the scheme. The European Parliament also favoured hypothecation of revenues,and it placed special emphasis upon the financing of activities in developing countries. It was the Council, reportedly at the behest of the UK government, that insisted upon weakening the commitment to hypothecation,a matter in relation to which the Commission expressed its regret.(2006)
99. Ares, 'EU ETS and Aviation' (13 Feb. 2012), available at: (accessed 24 Feb. 2012).www.parliament.uk/briefing-papers/SN05533.pdf
100. Eckersley, 'The Politics of Carbon Leakage and the Fairness of Border Measures', 24 Ethics and International Affairs (2010) 367.