China Wants to Boycott Carbon Credit Scheme

China’s aviation industry group is urging Chinese airlines to boycott Europe’s carbon credit scheme where airlines are expected to buy credits for all flights that enter into Europe which comes into force on 1st January 2012.

The airlines are being asked not to submit monitoring plans on CO2 to aviation officials in Europe or to discuss any preferential treatment plans.

From 1st January any airlines landing at any European airport will have a carbon cap imposed and will have to pay for any surplus emissions by buying carbon credits under the Emission Trading Scheme (EFS). This scheme will cost airlines in China approximately $120 million in the first year alone and over three times that amount by 2020.

China isn’t the only country to be up in arms about the scheme. Many other countries around the world believe that it is contravention of the Kyoto Protocol, the 1944 Chicago Convention on International Aviation and the rules set out by the World Trade Organisation.

In the face of so much opposition, China may consider retaliatory action if Europe continued with the scheme. They are considering legal action however according to the European Court of Justice the scheme was well within the law.

EU officials are entitled to impose such as scheme as attempts to impose worldwide reductions on emissions collapsed. They also went on to say that the scheme will not impose a massive financial burden on airlines as 85% of the carbon credits were given away for free within the first year.

So what to make of this? Is the EU right to impose such a “tax” on emissions? What would happen if leading countries around the world decided to boycott the scheme? Please give your views.

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