Stop the European Union from Unilaterally Applying a Cap-and-Trade Tax to U.S. Airlines and Passengers

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	Stop the European Union from Unilaterally Applying a Cap-and-Trade Tax to U.S. Airlines and Passengers
	PubZone1 The U.S. Airlines: Green and Getting Greener – a Catalyst for U.S. Economic Growth For the past several decades, U.S. airlines have dramatically improved fuel and greenhouse gas (GHG) emissions efficiency by investing billions in fuel-saving technologies for our aircraft, engines and routing optimization software. In fact, in 2010, U.S. airlines moved passengers and cargo more than twice as far on a single gallon of fuel than they did in 1978, reducing carbon dioxide (CO₂) emissions by more than 3 billion metric tons. That is roughly equivalent to taking 20 million cars off the road in each of the intervening years. That is why our industry represents less than 2 percent of all GHG emissions in the United States while driving over 5 percent of the nation’s GDP and 10 million jobs. U.S. Airlines Have Advanced an Affirmative, Global Plan for Even More Greenhouse Gas Emissions Savings Our “global sectoral approach” proposal for aviation GHG emissions includes an aggressive set of measures and emissions targets. Under this approach, the framework for both international and domestic aviation emissions would be established internationally. All airline emissions would be subject to emissions targets requiring industry and governments to do their part, including: an annual average fuel-efficiency improvement of 1.5 percent through 2020 and carbon-neutral growth from 2020, subject to critical government infrastructure and technology investments such as air traffic control modernization, with a goal of a 50 percent reduction in CO₂ by 2050 relative to 2005 levels . Significantly, the International Civil Aviation Organization (ICAO), the United Nations body charged with setting standards for international aviation, has adopted much of the U.S. airline industry’s framework. Unfortunately, progress in advancing and implementing this initiative has been diminished as a result of the European Union Emissions Trading Scheme (EU ETS). The EU ETS Violates International Agreements and U.S. Sovereignty Despite global consensus on the unique nature of aviation and the need for a global approach to aviation emissions, the EU has included international aviation in its unilateral ETS. Beginning on January 1, 2012, U.S. airlines with flights to Europe have been required to acquire emissions “allowances” to cover the emissions over the entirety of each flight departing from or arriving in an EU member state, including CO₂ emitted over non-EU countries and international waters. Capping and taxing emissions from flights in U.S. and international territory is the most egregious regulatory overreach of the EU ETS. Consider the example of a flight from San Francisco to London. From before the aircraft begins to taxi from the gate in San Francisco, the EU emissions rules apply. As a percentage of total emissions, 29 percent take place in U.S. airspace, 37 percent in Canadian airspace and 25 percent over the high seas. Less than 9 percent of emissions from this flight take place in EU airspace. Yet the EU ETS emissions-allowances requirement applies for the entire flight from start to finish. And should the U.S. airline not purchase and surrender to the EU the amount of allowances required by the scheme, that airline will be subject to an “excess emissions penalty.” By asserting EU jurisdiction over U.S. airlines in this way, the EU and its States are in violation of the Convention on International Civil Aviation, referred to as the “Chicago Convention” and the U.S.-EU Open Skies Agreement, both of which are fundamental to enabling airlines to transport people and critical goods around the globe without undue trade blocks and interference. Most significantly, the EU and its States are violating the sovereignty of the United States. They also are imposing improper taxes and charges and are acting contrary to their commitments to work the issue of international aviation emissions through the proper international body – ICAO. In an attempt to address this illegal scheme, A4A and several U.S. carriers filed suit in the UK High Court. The case was referred to the European Court of Justice (ECJ). On December 21, 2011, the ECJ issued an opinion that the EU ETS does not violate international law or third-country sovereignty because – even though its Member States are parties to the Chicago Convention – the EU itself is not. While disappointing, this was not a surprising development, given the political nature of the ECJ. The EU ETS as Applied to U.S. Airlines Is Bad for U.S. Airlines and the U.S. Economy and Is Counterproductive to the Environment The EU ETS imposes a steep and volatile tax on U.S. airlines. Even projecting from the unusually low European carbon prices today, the U.S. airlines will be required to pay into EU coffers over $3.1 billion between 2012 and year-end 2020. That outlay could support over 39,200 U.S. airline jobs. Now consider that the costs could be twice as high if the cost of carbon in Europe returns to where it was just three years ago. That cost outlay would represent over 78,500 U.S. airline jobs. But the volatility of carbon prices and the prospect that the EU will make its emissions caps even tighter mean that the diversion of U.S. dollars and jobs could be even higher. Notably, none of the monies collected by the Europeans are required to be used for any environmental purposes at all. Thus, taking U.S. airline, passenger and shipper dollars, the EU ETS will siphon away to European coffers the very funds our airlines need to continue investing in the technological, operational and infrastructure improvements required to meet our emissions targets. This is truly anti-environment. U.S. Government Opposition to this Extraterritorial Scheme Is Critical U.S. government opposition to this scheme is critical. Our government has the tools, both in the legislative and executive branches, not only to call the EU on its actions, but to work to get the EU and its Member States back to the table at ICAO to flesh out and implement the global sectoral approach framework provisionally agreed at ICAO in 2010. A4A commends the House of Representatives for passing its bipartisan legislation (HR 2594) opposing the EU ETS scheme and urges the Senate to pass similar bipartisan legislation (S 1956). A4A commends the administration for letters to the EU written by Secretary Clinton and LaHood outlining the U.S. government opposition to EU ETS. However, more is needed to get the EU back to the negotiating table. If left unanswered, the EU breach of international law poses a direct threat to the ability of the U.S. airlines to transport passengers and goods, a critical enabler of the U.S. and global economies. The U.S. airlines are working toward a solution and appreciate the opportunity to work shoulder-to-shoulder with the U.S. government in standing up against this illegal action. PubZone2	A4A advocates measures to support aviation safety, security and well-being.