Flying Green: Jobs for Europe, Lawsuits for the United States

Based on research by the United Nations Intergovernmental Panel on Climate Change, the aviation industry accounts for just over 2% of all global greenhouse gas emissions and that figure will increase to at least 3% by 2050. In an increasingly carbon and fuel constrained world, some aviation firms and governments are seeing a competitive advantage in going green while unfortunately the U.S. is lagging behind.

2011 results demonstrate that Airbus is pulling ahead of Boeing in new plane orders and the underlying reason is a more thoughtful private sector and government strategy for clean energy coming out of Europe. The 2011 Paris Air Show was the best ever for Airbus, earning firm orders for 418 aircraft worth about $44 billion at list prices, compared to only 47 planes valued at $7.5 billion for Boeing according to one industry figure.

Glen Hurowitz at the Center for International Policy writes in a recent Grist column that “the results are due almost entirely to Airbus’ new hyper-efficient 320neo model, which is a whopping 15 percent more fuel efficient than Boeing’s options, meeting buyers’ demands at a time of high fuel prices and growing concern over greenhouse gas emissions.”  This translates into approximately 1 million American jobs lost to European competition because of new orders for more efficient Airbus planes.

A mixture of a price on carbon in Europe, coupled with a strong corporate culture to increase efficiency create this Airbus advantage. On the legal side of the equation, the European Union’s Emissions Trading System (EU ETS) will begin to regulate carbon emissions for airlines landing within EU borders starting in 2012 with a view to cutting airline emissions over time. Meanwhile, Congress has completely dismissed the concept of cap-and-trade regulation for the foreseeable future. Additionally, the Air Transport Association of America is fighting the applicability of these pending costs when U.S. Airlines land in the EU. In addition to the trade association efforts, the Obama Administration will likely consider options to fight the applicability of the EU ETS laws on U.S. airlines, citing potential violations of international law as noted in the New York Times.

Beyond these legalities however, there is clear global demand for more efficient modes of transportation that are otherwise equal to their competitors in terms of cost and comfort. Airbus has an ecological vision out to 2050 that their CEO regularly touts irrespective of what the law requires.  But certainly that vision recognizes the growing number of countries that are regulating carbon through a variety of policies and measures.

Ultimately it is a better use of time and energy for Congress and the Obama Administration to adopt “equivalent measures” to the EU ETS that encourage innovation and scaled-up efficiency.  A litigious approach aimed at thwarting the inevitable global trend towards increased efficiency in the airline industry will cost a lot of time, money and U.S. jobs.