Planes, trains, and automobiles : the EU legislation on climate change and the question of consistency with WTO law

Abstract

The European Trading System (EU ETS) for carbon emissions has been extended to apply to aviation as well, including planes of foreign companies flying between, into and out of European Union (EU) airports: this extension has entailed extensive discussions, especially (but not only) across the legal community. Recently, the EU decided to postpone the application of the EU ETS for flights to and from Europe, but not within, for one year in order to facilitate attempts to look for a global solution under the aegis of the International Civil Aviation Organization (ICAO). In this paper, we discuss the consistency of the regime with the multilateral trading rules. In our view, there are good arguments to support the thesis that the regime adopted by the EU does not run afoul of the relevant rules established by the World Trade Organization (WTO). We stop short of assessing the EU’s policy-decision to postpone the ETS application, and the ensuing question of whether a global solution is feasible, since this paper is confined to a pure legal evaluation of the EU ETS using WTO law as a benchmark.