The Coming Aviation Trade War

It pales in seriousness next to the showdown between Iran and the West, to be sure, but there is another war brewing. This is of the non-shooting variety. It is a trade war between the 27 member nations of the European Union on one side and the United States, Russia and China on the other.

The trigger is a carbon tax that the EU has slapped on all airlines flying into, out of, and around the EU.

The Europeans say the tax is needed to offset rising atmospheric emissions from civilian airliners that contribute to global warming. Everyone, they say, has to pay their fair share.

Opponents of the tax, which formally went into effect 1 January, 2012, counter that it amounts to an extraterritorial power play that extends EU authority over non-EU airlines. Additionally, they say, it will prove ineffective, as solutions to a global problem have to be global, too.

The EU counters that counter-argument by holding that the aviation industry has been foot-dragging for years, and we have to start somewhere.

The threat of a trade war comes in, in the event that the U.S., Russia and China - which has forbidden its airlines to pay the tax - decide to retaliate against the EU, whether targeting its airlines for punishment or retaliating in some other way.

Commercial aviation accounts for just 2 percent of the world's carbon-heavy emissions and is superceded by trucks, cars and other sources. Moreover, the aviation industry has made great progress in recent years, building lighter, more fuel-efficient planes that pollute less than did their predecessors. Nevertheless, aviation's share of emissions is expected to rise to 3 percent because the fast- increasing number of flights is more than off-setting the savings on individual flights.

And there the matter stands, with both sides trying to stare down the other and international diplomats trying to come up with a, well, diplomatic solution that will allow all parties to back away from the brink of a trade war and save face. Just how to do that remains a mystery.

Personally, I can see the points being made by both sides. The Europeans are right that something has to be done and it needs to begin ASAP. Critics of the tax are right, too, in that the aviation industry is getting greener - albeit under pressure from environmentalists and regulators. The industry, as represented by groups such as the U.S.-based Airlines for America (A4A) and the Geneva-based International Air Transport Association (IATA), are right in saying solutions have to be global. Emissions, like airplanes, fly across national borders, oceans and continents.

What to do? Can we split the difference? It's hard to see how. Modern-day Solomons, please step up. And do it soon. The clock is ticking.