The European Union’s plan to charge airlines for their carbon emissions has stirred up quite a bit of controversy.
While some readers support the scheme, in
which airlines landing in the European Union must buy or sell carbon allowances
depending on their yearly CO2 emissions, others are clearly annoyed that the
scheme may increase airline costs, which may result in higher fares.
should do their bit and more to counteract the negative effects they place on
the environment,” reader Geraldine McDonald wrote. “I wouldn't mind paying
higher charges if it was going to help the environment.”
Since I reported
on this issue last week, reader
responses have flooded into my inbox and onto our Facebook page. It’s also become clear that there
is plenty we can’t predict yet.
let’s look at the spectre of higher fares as a result of the Emissions Trading
System (ETS). While most US airlines raised transatlantic fares by $6 when
media chatter about ETS flared last week, the reality is that airlines will not
face higher costs until the end of 2012 – if at all. That’s when airlines will tally
their carbon emissions for the year and know if they are over or under their
over whether airlines will actually have to pay more into the ETS will rage all
year,” said Rick Seaney, CEO of Farecompare.com. “Transatlantic travellers are
already paying an average of $435 in fuel surcharges and $150 in taxes on each
roundtrip ticket. Add on another $50 to $60 to cover ETS and demand could drop.
Passing another price increase onto passengers with thinner wallets is no easy
task,” he said.
While some readers
railed against ETS as a new tax, airlines will not actually be forced pay
European governments any money. ETS is a “cap and trade” scheme where there is
a limit on the total amount of greenhouse gases that can be emitted, and heavy
carbon emitters must buy and sell allowances among themselves. Buying allowances
will cost the company money, and they may pass those costs onto travellers. But
there’s even the possibility that airlines could
reap windfall profits from fare hikes if they remain under their assigned emission
to the EU’s
website, “at the end of each year, each company must surrender enough
allowances to cover all its emissions, otherwise heavy fines are imposed. If a
company reduces its emissions, it can keep the spare allowances to cover its
future needs or else sell them to another company that is short of allowances. The
number of allowances will be reduced over time so that total emissions fall. In
2020 emissions will be 21% lower than in 2005.”
incurring extra costs, there are several measures an
airline could take to reduce their carbon emissions. They could invest in more
efficient aircraft, such as the new Boeing 787 Dreamliner, which Boeing says
burns 20% less fuel and therefore spews 20% less CO2 into the atmosphere. They could also reduce
their flight frequencies or avoid European hubs altogether.
and Qatar Airways bosses might be drooling as they fly nonstop to US
destinations, bypassing Europe and offering better fares to passengers from
Asia, India or the Middle East travelling to US and vice versa,” said reader Haider
Hazrat from Chicago.
readers stood firmly on one side of the debate or the other, Bruce Henderson
pointed out how intertwined the two sides are. “The tourism industry will be
the first to fail as the climate changes,” he wrote.
Chris McGinnis is the business travel columnist for BBC Travel