Airline emissions scheme could lead to higher fares

Europe’s Emissions Trading System (ETS) extended to the aviation industry last week, requiring all airline carriers landing in the 27-nation European Union to monitor their carbon emissions.

Under the scheme, each airline is allowed a specified amount of CO2 emissions. If the airline emits more than that amount, it must purchase carbon allowances. If it emits less than its limit, it can sell its extra allowances to other heavy carbon emitters, such as other airlines, steel makers, refineries or power plants.

Airlines in Europe and around the world are squawking about the measure, saying that the scheme will increase costs -- which they intend to pass along to their customers by raising fares. The airlines say the scheme could add about one billion euros to their costs this year, tripling to nearly three billion euros by 2020.

Led by Delta Air Lines, US carriers increased fares for European flights by $6 roundtrip last week to cover the initial costs of compliance. Although British Airways has not raised fares yet, a spokesperson said, “We will keep a careful watch on the extra costs which the start of ETS will bring and what effect it will have on our business.” Lufthansa has warned that it might increase its fares, too. Chinese airlines are refusing to comply, saying that the scheme could launch a trade war.

The International Air Travel Association calls ETS a “tax grab” and is pushing for a global solution, not a unilaterally imposed EU scheme. However, the EU said that it’s tired of waiting for the world to formulate a global plan to curb airline emissions, so it went ahead and launched its own.

While politicians and bureaucrats around the world figure this out, it’s time for travellers to ask themselves: what’s more important … travelling the world, or saving it? Is it necessary to restrict your air travel in order reduce your personal carbon footprint? With Europe under severe economic strain, and the threat of a recession hovering over the continent like a dark cloud, is now the time for yet another airfare increase? Please leave your comments on our Facebook page.

Chris McGinnis is the business travel columnist for BBC Travel