Collision course

The European Union’s environmental policy is on the ropes. A traditional champion of the fight against climate change, the bloc has run up against internal resistance, as yet insurmountable, and a trade war that is threatening its most successful industrial project, Airbus. The CO₂ tax that must be paid as a form of emissions rights by airplanes landing on and taking off from European soil has been in effect since the start of this year. The levy has raised the hackles not only of the airlines, both European and non-European, but also of governments. Beijing has barred its airline companies from paying it and has frozen an order for 25 Airbus planes worth 12 billion dollars.

This serious trade war comes at a delicate moment for the EU’s finances, a situation that could serve as the ideal lever to win the support of political leaders, already under heavy pressure from the aviation sector, to abandon the new tax. The sector claims the tax undermines its competitiveness by pushing up the cost of tickets and exacerbates its already difficult financial situation. The impact, however, differs from one company to another. Lufthansa announced losses for last year of 13 million euros, compared with a profit of 1.130 billion euros in 2010. In contrast, IAG (the company that emerged from the tie-up of Iberia and British Airways) made a profit of 555 million euros in 2011. Iberia calculates the tax will have a limited impact on its finances of around 20 million euros a year.

It is within this scenario that Poland has objected to the EU’s plans to subscribe to a new environmental accord that will reduce greenhouse gas emissions — of which CO₂ is the most important — by 80 percent from the levels of 1990. Warsaw points to the fact that 90 percent of its electricity is produced by coal, a prime example of the short-term sacrifices entailed in shifting to a green economy where the long-term benefits are evident. Such problems are doubly worrying in the wake of the failures of the latest global summits on climate change in that they have shown themselves within the heart of the EU, the only international bloc prepared to fight for a new accord to do battle against global warming, and replace the now-defunct Kyoto agreement.