Obama Signs Bill to Exempt US Airlines from EU Aviation Carbon Tax

I managed to avoid listening to pretty much all of Obama’s election victory speech but managed to click onto a news site that had a streaming video of it, and caught his tepid reference to climate change, a passing comment on “the destructive power of a warming planet.” This wasn’t a commitment of any kind; I took this as a sign simply that the president now feels he has to give global warming lip service.

This news story, of Obama undermining an EU carbon tax, is consistent with that theory.

I wonder if the EU is prepared to escalate. It could easily threaten to deny carriers who don’t pay the taxes the right to land or refuel, or alternatively, impose the tax through airports (as in have them bundled into the fees that the airports charge for gate usage). This really is US exceptionalism in action. We pay more than our fair share of NATO, per us, ergo, we think we can push the EU around. And that is probably correct, at least in the short term.

By Charles Kennedy, a writer for Oil Price. Cross posted from Oil Price

The EU has set a tax on carbon emissions for all aircraft flying into European countries, all part of the Emissions Trading Scheme (ETS). The problem is that Obama has just signed a bill that exempts US airlines from paying that carbon tax.

Specifically the bill gives the US transportation secretary the power to shield US airlines from the tax; an unusual bill, according to Reuters, as it allows US airlines to ignore EU laws.

Clark Stevens, a spokesman from the White House, explained that “the Obama administration is firmly committed to reducing harmful carbon pollution from civil aviation both domestically and internationally, but, as we have said on many occasions, the application of the EU ETS to non-EU air carriers is the wrong way to achieve that objective.”

He also stated that Obama is focused on finding a global solution to reduce emissions with the UN’s International Civil Aviation Organisation (ICAO).

Well I suppose that this is kind of acceptable; that Obama has decided to forgo a European solution to concentrate on a global one. However, the ICAO’s ‘global solution’ has already been in the pipeline for over ten years and still no progress has been made. It was for this exact reason that the EU got fed up and decided to take matters into their own hands by creating their own aviation carbon tax.

Connie Hedegaard, the EU’s climate chief, was quick to voice her disapproval at Obama’s actions. She said that immediately after his re-election Obama had admitted that the US had not done enough on climate change. This bill just reinforces that statement, and suggests that the US still has little intention on making any significant contribution.

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  1. Expat

    American “exceptionalism” is nothing more than emperialism cloaked in rationalization and propaganda. Nato is an outdated ego trip designed to enrich the defense industry.

    The EU carbon tax is too little, too late. The US will never comply. Might as well fire up the coal burning stove and cook s’mores until you die of heart failure cuz no one who matters gives a rat’s ass about global warming.

  2. Paul Tioxon

    Like everything else in life, the self contradictions of the US Navy’s “Green Fleet” operation, seems almost beyond belief. And of course, so too the republican attacks on hippie fuels from Neil Young’s tour bus powering an air craft carrier battle group.



    But “Green Capitalism” is one of the emerging fault lines at the commanding heights of capitalism. It seems, Big Oil still hates electricity and all other alternatives to what it has locked up the property rights. And, ecological science will soon be placed in the service of this new messiah for the circulation of capital into a new era of growth. But while we wait, current financial interests in oil may unlock the underlying answer as to why Obama has crossed the street. It is not to avoid global warming, climate change but to help newly emerging and converging oil interests, in my outsized ego based opinion.

    Delta Airlines is the proud new operator of their own jet fuel refinery. Also, in the recently shut down 90+ year old coal burning refinery not too far from Philly International Airport and Delta’s jet fuel facility, is what will become the Bakken Oil railroad depot with offloading capacity of over 130 tanker cars/day of Bakken Oil. No pipeline needed. Hmm, does Susan Rice know her 401k just tanked?



    And here is the Delta jet fuel Bakken connection:


  3. Middle Seaman

    One cannot erase the picture of someone from the Tea Party whispering to Obama what policies to follow.

  4. bmeisen

    Why punish an industry that is doomed anyway? It’s clear now that they will drill, frack and burn till the cows come home. And even if there’s a horrible global disaster, like the FOUDATION cracks, or worse, even if fracking is exposed as the latest investment bubble, then there’s still ALGAE, i.e. a carbon-based source of jet propellant. China can have theirs for chrissake.

    So while the ice caps melt, remember where many major airports are located. The NYTs interactive maps nicely supplement the World Bank report: a 25-foot rise in sea level and think Logan, Kennedy, Laguardia, Newark, National. They are all under water. In 10 years aviation will be the privilege of the 1% and their guardians. Obama is serving them well.

  5. The Dork of Cork.

    I think there is deep labour arbitrage reasons why Europe does the carbon tax thingy while the rest of the world gets on with burning the stuff.
    The banks of Europe have global investments in slave plantations and make much more money from these then sustaining domestic demand in their base of operations.

    The EUs role is to transfer these energy units elsewhere.

  6. S Haust

    What would be the effect of an American passenger buying a European ticket? For example, Delta has a nonstop flight from Pittsburgh to Paris (the only real international direct service out of PIT). But you can buy an Air France ticket for that flight. I’ve done that, a couple of years ago, and when the Delta return flight was cancelled because the only aircraft they use for that flight was broken, the service I got to reroute was a lot better.
    My question is whether that AF ticket might compel payment of at least that portion of the carbon tax.

  7. TK421

    ” the application of the EU ETS to non-EU air carriers is the wrong way to achieve that objective.”

    Don’t let the perfect be the enemy of the good.

    1. Strangely Enough

      Don’t let the perfect be the enemy of the good*

      *Offer only valid when chiding leftists for not supporting Republican lite.


  8. Jeff L

    Can anyone here list a single dire prediction made 5 years ago or more with respect to human caused global warming that has come true (arctic being ice free, himilayan glaciers disappearing, etc.)? It is not a case of oil company funding sceptical scientists (can you prove their source of funding?), nor is it the case that sceptical scientists do not believe there has been some modest warming since the end of the little ice age. There have been billions of government funding for research to prove that humans are the cause of the recent warming, and there are hundreds of scientists who would not be able to publish papers if they did not propose research that supported the official position. The human caused global warming movement is rooted in corrupt governments seeking any means possible to collect more taxes and control more of society. They have successfully brain washed an entire generation to believe that we can save the planet by controlling a trace gas in our atmosphere. Show me evidence, not output from cooked computer models that demonstrate that CO2 is wreaking havoc with our climate.

    1. Jon

      Fascinating insight Jeff. Aside from the howler inserted into the IPCC report, the majority of global climate change research has suggested a 50-year or more horizon for the more severe manifestations of climate change to hit. That would be why the rather pathetic targets we have are 80% of emissions by 2020. And yet you, in your wisdom, are using a 5-year horizon as the basis for your ‘evidence’ that climate change does not exist.

      Exactly what evidence would you like? If you don’t believe in modelling, then you presumably also doubt the existence of most subatomic particles, most engine performance improvements, and a host of other things that go in to everyday science. Even if we set aside climate modelling for a moment we have: sea level rises (http://www.bbc.co.uk/news/science-environment-20543483) and a higher number of extreme weather events globally (http://www.guardian.co.uk/environment/2012/sep/19/extreme-weather-new-normal-climate-change) and several other warning signs.

      The problem that the simple-minded have with this concept is that climate change does not mean the entire world gets warmer in a consistent, steady way. You’re dealing with a complex, adaptive system. A good analogy would the world financial markets: they don’t smoothly adjust up and down based on market fundamentals, feedback effects mean that there are wild surges up and down over very short periods of time. What most recent research has shown is that our models were *too* conservative — we’re seeing measurable climate changes that shouldn’t be happening for another decade or two already.

      Take your conspiracy theories to the next Tea Party convention.

    2. Kai

      Human-induced global warming has been proven beyond REASONABLE doubt. No developed country doubts this, except the US. Well, then there’s the question whether the US is still truly a developed country.

    3. Larry Barber

      Something I don’t understand, why does it make a difference whether or not climate change is anthropogenic? Whether man-made or not we still need to respond to it, prepare for it, and try to stop it. It doesn’t really matter what the source is, although it seems more than coincidental that record rates of climate change just happen to be happening at the same time as mankind is pouring more and more carbon dioxide into the atmosphere.

      1. different clue

        If it is anthropogenic, it can become anthropolytic. If “we” are doing things to drive the process, we can stop doing those things to stop driving the process, and we can even do “reverse things” to reverse the process.

    4. bmeisen

      As an optimist Jeff you should get yourself to the Arctic Circle where an ice-free ocean will be a goldmine of raw material opportunities. Only 5 countries border the thing and you can bet that they are going to keep the rest of us out while they beat themselves to death trying to control virtually untapped riches. Slip in there with an autark platform, well-armed and fiercely confident of your American right to live free, and rake in the dough.

      1. Jeff L

        Didn’t say 5 yr timeline, y’all forget the dire predictions made 5 – 10 years ago of which none have come to pass. Global temps have been going up for 30 yrs, down for 30 yrs, up for 30 yrs, down for 30 years for quite a while. The earth didn’t have a cataclysmic ending during the middle warm period which was warmer than today, don’t think they had too many coal fired generating stations back then.. Not saying we shouldn’t invest in programs to help people deal with droughts, hot summers, cold winters, food shortages; just that the jury is still out whether rising CO2 is the cause or the effect of the modest warming we’ve experienced over the last 200 years. Why waste billions trying to control something that has little effect on climate when it could be better spent elsewhere. Mankind has benefited enormously from relatively inexpensive energy, eliminating CO2 producing sources would perpetuate poverty, disease and shorter lifespans, especially in the developing nations.

        1. Joel3000

          It’s all so confusing!

          I’m not even sure that the world beyond my view continues to exist when
          I don’t look at it.

          By all means lets wait till its to late.

        2. jrs

          What about ocean acidification then? It’s already starting to dissolve the shells of shellfish. It’s due to the oceans absorbing to much carbon and will mean massive ocean ecosystem collapse. Sound good to you?

        3. different clue

          I haven’t been vigilant enough to keep track of timelines.
          I do know that years ago the “manmade global warmists” were predicting things like arctic icecap retreat, glacial shrinkage, faster warming of the arctic than non-arctic, etc.; and those things are happening as predicted before they began happening. So I am satisfied with the predictive power of the manmade global warming theory.

          If you are not satisfied with it, then you have a wonderful contrarian investment opportunity laid out at your feet. Whatever the MMGW theory predicts, just invest in those things not happening. Buy all the oceanfront seaside coastal property you can afford along the Gulf Coast, esPECially in Louisiana, etc. etc. If you are right and we are wrong, then a fortune awaits you and your heirs if you invest contrarianly “against” the MMGW theory.

          1. Dave of Maryland

            I’m with Jeff L, and I’m in the process of giving up on blogs like this.

            Ice in the Arctic Ocean is NINE TENTHS submerged. By definition. Polluted air isn’t melting it. Hot air can’t melt what isn’t exposed to it. Air isn’t a powerful enough medium even then. (It won’t thaw your turkey.) Aside from the fact that, in the Arctic, sunlight is extremely oblique, which means, extremely weak. In the Arctic you gotta stand to get a tan.

            If ice in the oceans is melting, for that matter, if the ice sheets in Greenland are melting – both of which I accept – then the reason is because the water and ground under them are warmer.

            Why would the earth itself be warmer? How about this: Between 1945 and 1980 or so, the world detonated around 1000 nuclear bombs, the majority of them underground. Every one of them generating lots and lots of heat. Where did that heat go?

            The note about 30 year cycles reminds me of a remark by George McCormack, in 1947, of the cyclic nature of heating and cooling. George had the exact reason why, but I have such contempt for this fake science that I will not bother you with it. Don’t bother looking for him, he was forgotten a long time ago.

            This is Chicken Little hysteria. It is a disgrace. The earth is warmer, but not because we’re polluting it. Which is scary. Clean up the air because it’s nasty to breathe. Clean up the air because it kills trees.

        4. Yves Smith Post author

          Wow, you have reading comprehension problems and expect us to defend your straw man?

          The dire predictions were for 2100, not 2010.

          The onus is on you to tell us what “dire predictions” from real climate scientists, not Rush Limbaugh making claims about what climate scientist have said, for 2011 or 2012 aren’t happening. Everything I had read says the reverse: that the changes are happening generally more rapidly that the middle of the road model forecast.

  9. briansays

    meanwhile you better separate that trash or else, and don’t use that fire place today or else, and no more plastic bags and we will charge you for paper, and keep having as many children as you want even if you can’t afford them

    feel better now?

    life is too short to drive/be seen in a fuel efficient/low horse power/ugly car

  10. kayjay

    And, now the idiot wants to appoint Susan Rice, a mediocre and petulant child of privilege who holds huge amounts of oil and Canadian Tar Sands oil pipeline and Tar Sands oil company stock as Secretary of State per data compiled by NRDC and reorted in the Washington Post.

    There are many good people around and one of the better ones is Representative Markey of Massachusetts, who sits on the Natural Resources Committee of the House of Represeatives.

  11. Steve in Flyover

    Putting aside the whole moronic question of whether of issuing/billing “carbon credits” are a good idea, the tax was vetoed, because it is stupid.

    By applying the flight from it’s point of origination in the USA, they are trying to collect Euro taxes for fuel sold and flight operations in the USA.

    Last I heard, European law doesn’t apply over here.

    The more I hear about all of these crazy azz plans the Euros have for a Carbon Trading market, the more I believe it’s about generating revenue than reducing carbon emissions.

    1. different clue

      A straight-up fossil-carbon-tax would be better at suppressing use of fossil fuels than any elaborate cap-and-trade marketroid soe-loo-shun. Big Gav made that point once years ago at his PeakEnergy blog . . . noting a “carbon emmissions market” would be like a “right to own slaves” market for ending slavery.

    2. Gil Gamesh

      No. European law applies in Europe. So, Lufthansa is not obliged to pay governmental fees imposed at JFK….wunderbar.

    3. Yves Smith Post author

      This is pretty amazing.

      An airplane goes to Europe. You think it’s gonna stay there, that Delta will just make it a gift to Frankfurt when it flies there? No the airplanes eventually fly back to the US, which means refueling. And last I checked, airplanes also have to make use of EU airspace to land, EU based ground facilities, etc,. Or have you some magic solution to that issue?

      I would be careful about throwing the word “stupid” about. It looks like projection.

  12. Gil Gamesh

    Climate change activists will learn, if they haven’t already, that petitioning the government, emailing Obama, calling Congressthings, and so forth, is misdirection. Corporations set policy here. And one has to hurt their bottom lines in a material way to effect change and end their obstruction and recalcitrance.

    The people vs. unaccountable corporate power: the epic battle in this country, and it’s just starting. But, we created corporations, and we can destroy them.

  13. TimR

    Dave of Maryland wrote:
    I’m with Jeff L, and I’m in the process of giving up on blogs like this.
    Read more at http://www.nakedcapitalism.com/2012/11/obama-signs-bill-to-exempt-us-airlines-from-eu-aviation-carbon-tax.html#sVX1sX5dV43E032X.99

    Hope not, I find your comments interesting!

    What distresses me is that even when skeptics like Jeff present their case in a calm way, the response is so often contemptuous, condescending, a bit hysterical, etc. Even at a blog like this. It makes me wonder just how rational and analytical the people here are.

  14. skippy

    CSIRO was contracted by the Garnaut Climate Change Review team to review recent studies examining Australians’ views of climate change, their beliefs about the role of human activities in producing climate change, and their support for various policy responses to climate change. The review also considered whether, and to what extent, public views had changed since the previous Garnaut review in 2008.
    A total of 22 studies were identified and analysed. Working to the priorities outlined by the Garnaut review team, relevant information from each study was extracted, reviewed, and considered in relation to information from other studies.
    From the existing research, we conclude that:
    Most Australians believe the climate is changing, but fewer believe that the change is attributable to human activity.
    Belief in climate change and its anthropogenic drivers has waned in recent years, reflecting trends in other Western countries.
    Responses to questions about climate change vary systematically with question wording and response formatting, but these differences do not negate the overall conclusions above.
    Beliefs about climate change are strongly related to political preferences, voting behaviours and gender, but no clear relationships between these beliefs and location, age or income have emerged.

    Most Australians believe that Australia should take action on climate change without waiting for global consensus.
    There is no clear consensus on what policy actions Australians prefer, such as setting a carbon price or establishing an emissions trading scheme.

    There is a clear need for further directed research into Australians’ understanding of climate change policy options, their support for those options, and their willingness to pay within each policy option.

    The best ways to communicate information about climate change, its anthropogenic drivers, and potential policy responses to climate change all require close consideration and further inquiry.



    This 2012 Report Card demonstrates that climate change is having significant impacts on Australia’s oceans and marine ecosystems.



    Skip here, this is the kicker…

    Does scientific knowledge matter in the climate debate? Recent research suggests that it is not “what you know” but “who you are” that counts in making up your mind about climate change.

    World views and scientific literacy

    Dan Kahan and colleagues reported a small negative correlation between scientific literacy and concern about climate change – but not for everyone in their sample. Specifically, those participants identified as “hierarchical individualists” (HI) showed the negative trend, but those who were “egalitarian communitarian” (EC) showed the opposite pattern – more literate, more concern.

    Put crudely, HIs are opposed to government intervention and restrictions on industry, whereas ECs favour intervention and are suspicious of industry and commerce. The argument then is that each group adopts a position on the scientific information that fits with their personal view and interests. It is not the knowledge per se that is important but how it is incorporated into the way you see the world.

    HIs see the societal upheavals necessitated by climate change as threatening their values and thus while “understanding” the science downplay the concern. ECs see action on climate change as important. The more they understand the science the more concerned they become.

    So does this mean we should be abandoning attempts to communicate the science? If scientific understanding only “works” for the ECs, then are we just preaching to the choir?

    This question is particularly pertinent for bodies like the Australian Climate Commission. Additional research shows Australia also has its share of HIs and ECs and that their respective beliefs about climate change follow the predicted pattern. Communitarians are four times more likely than their individualists cousins to believe that climate change is already happening.


    Skippy… Bias conformation seeking by libertopians and free market – ologists[?], say it ain’t so!

    Evidenced by Dave and Co’s I’m out of here, its the economy or bust, I’m leaving blogs like this… shtick… shezzz… barf…

  15. Lyle

    Given that China and India as well as the US oppose the tax as well as the IATA for its extraterritorial effects, and that on NOv 13, the EU backed down this is more of a tempest in a Teapot and will postpone the tax for a year at a minimum.

  16. Ep3

    Ya know yves, America has been doing similar things for its companies for a long time. What I mean is the steel industry, car industry, etc. When other countries were changing how they were doing business and moving into the future, the US govt would subsidize these costs to take away the burden from US businesses. So what this would lead to is an inability of US companies to have a competitive advantage. Yes, in the short term American companies would continue to prosper. But as the market (consumers) began to change their habits towards companies that had changed (changed – adapted to more environmentally friendly products that actually save a company money from the carbon & are products that consumers say ‘hey this works better & is better for the environment). So we end up with old bloated subsidized US companies that nobody wants to buy their products, so the govt ‘bails them out’ again.
    So my solution to this problem is to ban unions, remove the minimum wage, cut corporate taxes, slash entitlements, and other things to help job creators. (heavy sarcasm)

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