A battle for the skies: applying the European emissions trading system to international aviation

The European Union (EU) has long been in a diplomatic row with its main trading partners. The row concerns the EU’s decision to include foreign aircraft emissions within its Emissions Trading System (ETS). Several States have objected to the inclusion as a violation of their sovereignty. The importance of the quarrel can hardly be overestimated: it is the first real clash concerning unilateral measures to combat climate change. By including foreign aircraft emissions within the ETS, the EU has taken unilateral action to prevent international environmental harm. The EU’s action has given rise to some fundamental questions concerning legislative jurisdiction. Moreover, as the impact of climate change becomes more severe, climate change may serve as a pretext for all kinds of protectionist policies. The current quarrel is therefore also one of principle. This article analyses the jurisdictional basis for extending the ETS to extraterritorial flights and the reactions of third States. In doing so, the article reveals fundamental limits in international rules concerning the allocation of competencies between States, especially in relation to the protection of the environment. The article considers these shortcomings in the context of the present case and suggests a new approach to the traditional principles of sovereignty and legislative jurisdiction.