Airlines urge U.N. deal to avert carbon trade war

Sun Feb 12, 2012 8:36am EST
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By Tim Hepher and Harry Suhartono

SINGAPORE (Reuters) - Global airlines called on Sunday for a U.N.-brokered deal to prevent a row over aviation emissions between China and the European Union spilling into a damaging trade war.

The call by the head of the International Air Transport Association (IATA) comes amid signs that the EU may be willing to soften a unilateral stance that also risks souring efforts to resolve Europe's sovereign debt crisis with Chinese support.

In an interview, IATA Director General Tony Tyler said airlines had become wedged between conflicting domestic laws after China ordered its airlines not to join the EU's compulsory market-based system for regulating airline emissions.

"The Chinese move to prevent its airlines from taking part in the Emissions Trading Scheme is a very bold move and it pushes the Chinese carriers very much into the front line of this particular dispute," Tyler told Reuters.

"This is an intolerable situation which clearly has to be resolved; it cannot go on like this. I very much hope of course that we are not seeing the beginning of a trade war on this issue and eventually wiser counsels will prevail," he said.

China was an early opponent of the EU's cap-and-trade scheme, which has also drawn protests from the United States and India, and the escalating row threatens to hamper efforts to work out an international solution to Europe's sovereign debt crisis.

By banning its airlines last week from co-operating, China hardened its stance just ahead of a February 14 Beijing summit at which the EU will seek Chinese help to ease its debt crisis.

The EU says its scheme to charge airlines for emissions on flights into or out of Europe, which took effect on January 1, is needed as part of the fight against global climate change.   Continued...

<p>A passenger plane flies over a barbed wire fence as it approaches an airport in this February 23, 2010 file photo. REUTERS/Tim Wimborne</p>