VZCZCXRO7656
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHC #4858/01 0131257
ZNR UUUUU ZZH
R 131250Z JAN 07
FM SECSTATE WASHDC
TO EU MEMBER STATES COLLECTIVE
INFO RUEHBS/USEU BRUSSELS
RUEHMT/AMCONSUL MONTREAL 5634
RUEHBJ/AMEMBASSY BEIJING 8178
RUEHBR/AMEMBASSY BRASILIA 2669
RUEHBU/AMEMBASSY BUENOS AIRES 0448
RUEHBY/AMEMBASSY CANBERRA 6267
RUEHMO/AMEMBASSY MOSCOW 5528
RUEHNE/AMEMBASSY NEW DELHI 8183
RUEHUL/AMEMBASSY SEOUL 1578
RUEHKO/AMEMBASSY TOKYO 5730
RUEHWL/AMEMBASSY WELLINGTON 3013
RUEHOT/AMEMBASSY OTTAWA 2899

UNCLAS SECTION 01 OF 02 STATE 004858 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAIR ECON SENV EUN
SUBJECT: FOLLOWING UP ON THE EU'S DRAFT PROPOSAL ON 
AVIATION EMISSIONS 
 
REF: (A)06 STATE 190254, (B)06 STATE 188369 
 
  ¶1.   This is an action request.  See paragraphs 6-7. 
 
  ¶2.   In November, Reftel A asked posts to reach out to 
      appropriate EU member state representatives to seek their 
      views on a European Commission proposal to include 
      international aviation in the EU Emissions Trading Scheme 
      (ETS), which at the time had not been published.  Many 
      states noted at the time that they had not formed an 
      official position because they were awaiting a final draft 
      (Finland, Germany, Lithuania, Poland, Portugal).  Others 
      (Hungary, Latvia, Lithuania, Spain) acknowleged that many 
      serious questions remained unresolved and needed to be 
      addressed (legal implications, competitive distortions), 
      noting also that a number of other countries had already 
      registered concerns.  A few (Denmark, the Netherlands, the 
      UK, Finland) strongly supported the EU initiative. 
 
  ¶3.   On December 20, the European Commission issued its 
      draft proposal for a directive to include international 
      aviation in the EU's Emissions Trading Scheme (ETS). 
      According to the draft, effective January 1, 2011, all 
      flights operating BETWEEN EU airports will be covered by 
      the scheme.  One year later, beginning on January 1, 2012, 
      all flights arriving at and departing from any airport in 
      the Community from or to any point within and outside the 
      Community will be included.  The Commission's proposal 
      gives passing mention to ongoing work in the International 
      Civil Aviation Organization (ICAO), and notes that final 
      ICAO guidance on emissions trading "will be taken into 
      account, as appropriate" during the EU's co-decision 
      procedure. 
 
  ¶4.   The United States and a large number of other 
      countries (including Australia, Brazil, Canada, China, 
      India, Japan, Korea, New Zealand, and Russia) strongly 
      objected to the extraterritorial application of the EU ETS 
      to international aviation.  Although the one year delay in 
      implementation of the ETS for flights to and from airports 
      outside the EU in the ETS, and language taking note of work 
      in ICAO have been portrayed as concessions (to the U.S.), 
      their effect on the overall proposal is minimal.  As noted 
      in reftel A, inclusion of non-EU carriers without the 
      consent of their governments is inconsistent with EU Member 
      State international legal obligations under the Chicago 
      Convention on International Civil Aviation and may violate 
      numerous bilateral air services agreements, including those 
      with the U.S.  The EU's proposal will undermine, not 
      support efforts to develop effective measures in ICAO, and 
      ultimately delay implementation of a global solution to 
      aviation aircraft emissions. 
 
  ¶5.   The proposal has been forwarded to the European 
      Council and the European Parliament for review.  The 
      legislative process could take up to two years, but the 
      next six to twelve months will be critical as ICAO 
      contracting states prepare for the ICAO Assembly in 
      September, and the debate in Europe heats up.  ICAO's 
      Committee on Aviation Environmental Protection (CAEP) is 
      finalizing guidance to be approved at the Assembly that 
      supports the consensus position in ICAO that participation 
      in an emissions trading scheme must be accomplished on the 
      basis of mutual consent between states.  If Europe moves 
      forward on the basis of the current Commission proposal, it 
      will be completely isolated from the rest of the world. 
      The end result could be a huge setback for international 
      progress on aviation environmental protection. 
 
  ¶6.   ACTION REQUEST.  Posts are asked to follow up with 
      appropriate host government officials, including Members of 
      Parliament, to gauge their reactions to the Commission's 
      proposal, and to register once again our disappointment and 
      concern with the Commission's unilateral action on this 
      issue.  Posts should note that: 
 
 
STATE 00004858  002 OF 002 
 
 
       -- The Commission proposal circumvents the 
       appropriate multilateral process in ICAO, ignores 
       the strong objections raised by the U.S. and many 
       other countries, and risks violating EU member 
       state international legal obligations. 
       -- This action complicates our reengagement efforts 
       with the EU on climate change and clean energy. 
       -- The one year delay in implementation has minimal 
       impact and does not alleviate concerns, or weaken 
       U.S. resolve to proceed as appropriate with formal 
       dispute resolution, either in ICAO or pursuant to 
       our bilateral air services agreements with EU 
       Member States. 
       -- Moreover, any EU aviation emissions trading 
       scheme that does not seek the consent of non-EU 
       participants will become a model of conflict and 
       failure - not effective environmental mitigation. 
 
  ¶7.   Posts should also point out that consensus among EU 
      member states is uncertain - several have raised concerns 
      regarding the legal and competitive implications of the 
      Commission's proposal.  For Southern European posts, 
      Departments recommends that you target tourism and travel 
      ministries as well as transport and environment 
      representatives.  For Eastern European posts, we recommend 
      that you target trade and economic ministries in addition 
      to the above. 
 
  ¶8.   A set of Questions and Answers on the EU proposal and 
      the U.S. position is being finalized for posts' use as 
      appropriate, and will be circulated broadly.  For 
      additional information on the EU proposal, posts may access 
      the EU's website at: 
  http://ec.europa.eu/environment/climat/aviati on_en.htm 
 
      For additional information on interventions in 
      Brussels and follow-up with "friendly" countries, 
      posts may contact Kathleen Morenski at the US 
      Mission - MorenskiKA@state.gov. 
 
      For additional information on U.S. work in ICAO and 
      the U.S. position on aviation greenhouse gas 
      emissions, posts may contact Drew Nelson in the 
      Office of Global Change (nelsonds@state.gov) and/or 
      Megan Walklet-Tighe in the Office of Transportation 
      Policy (walkletm@state.gov). 
RICE