As Congress Acts, Obama Silent on EU Carbon Tax Scheme

As Congress Acts, Obama Silent on EU Carbon Tax Scheme

The European Union is ambitious, at least when it comes to taxing. In a new tax on carbon emissions set to take effect on January 1, the EU will tax U.S. airlines for carbon emissions while flying over the United States, so long as that flight departs from or lands in Europe. That is a wide power grab from nations who unambiguously have “complete and exclusive sovereignty over airspace above its territory,” according to international law.

The EU plan is so far-reaching that it even spurred the slow-moving Senate into action – bringing Senators John Thune and John Kerry together on an issue.

That’s because, regardless of your political party, it doesn’t make sense for the EU to decide policy with such wide-ranging implications without vetting it through the proper international channels. In this case, that would be the International Civil Aviation Organization (ICAO), a branch of the UN that is responsible for outlining international standards and practices for aviation.

The House has passed it’s own bill that will prohibit the EU’s tax from taking effect.

But, despite this quick consensus in Congress, the administration is conspicuously silent. Transportation Secretary Ray LaHood has noted in the past that the EU’s proposal was “lousy,” further warning the Europeans to not “assume we’re all just going to go along with it. 

But, with the administration dithering, are we just going to go along with it? 

The unilateral tax is not drawing much support internationally either. Twenty-six governments, including the U.S., Brazil, and China, have said that the unilateral tax was “inconsistent” with international law. That’s the best they can do?

However, it seems at present that no government is willing to file a complaint in front of the ICAO, which could end the plan before it starts.

For an industry that faces constant headwinds, this is not what the aviation industry needed. The EU estimates that the tax will cost as much as 2.8 billion by 2020, while the industry only expects to make profits of 3.5 billion next year. That will result in higher ticket prices, fewer international flights and fewer jobs in U.S. airlines.

Since the Obama administration isn’t leading, it is time that they follow Congress’ example and tell Europe that U.S. airspace is not taxable.