Carbon tax on planes prompts international dispute

The new European Union (EU) carbon tax, which applies to all planes landing within the EU block, has prompted international dispute from India, which feels the tax is violating the principle of 'common but differentiated responsibilities'.

The European Union carbon tax, which starts from 1st January, is a big step to combating climate change, with aircraft generating three per cent of total greenhouse gases. The Green Climate Fund will invest the money raised, calculated at around $100 billion a year starting from 2020, into countering climate change.

The EU has encouraged other countries to accept the new scheme, but India, among others, have criticised it as being a disguise for trade barriers. Three Indian airlines, Jet, Kingfisher and Air India have register losses in the three months ending in September, and the new tax could cost the airlines millions of dollars a year.

Both China and America have also took steps to oppose the legislation. The US House of Representatives passed a bill prohibiting its country’s airlines from paying the carbon tax to the EU, and China is looking to sue the EU before the year ends.

Posted by Joseph Hutton