Prevention of Airline Carbon Taxes Should Be a Model for Carbon Regulations

Posted on Fri 11/30/2012 by


By Nicolas Loris ~

President Obama recently signed legislation that prevents the European Union (EU) from taxing U.S. airline emissions for planes that travel to and from EU countries.

Although the EU announced it would delay the tax from its broader cap-and-trade-like system for a year, the new law protects U.S. airlines from the tax unless the International Civil Aviation Organization reaches a global agreement.

Congress and President Obama deserve kudos for protecting American air carriers and consumers from the EU’s attempt to unilaterally impose a tax on Americans. Now they should step up to prevent the Environmental Protection Agency (EPA) from doing the same thing.

When President Obama signed the bill, Senator Claire McCaskill (D–MO) remarked, “I’m happy for American consumers, who are the real winners here. It never made a bit of sense for European governments to tax our citizens for flying over our own airspace—and with the passage of this law we’ve got the tools we need to prevent it from happening and protect American jobs.”

The executive branch should carry the same logic to our own borders. Despite Congress’s rejection of domestic cap-and-trade schemes, the EPA is unilaterally imposing regulations on carbon dioxide (CO2)—a colorless, odorless, and non-toxic gas.

As McCaskill pointed out regarding the EU CO2 tax, the real losers in the EPA’s greenhouse gas regulations are the American consumers. These regulations will act as a massive energy tax, since a large majority of our energy comes from carbon-emitting fossil fuels.

Regulations and more stringent fuel efficiency standards first target electric utilities, heavy industry, and the automotive industry—all in the name of reducing greenhouse gas emissions. But this will cause producers to pass those additional costs on to consumers and to constrict investments and business ventures.

Follow the logic: If preventing EU-levied taxes protects American jobs, allowing the EPA to levy an energy tax through its regulatory assault will destroy American jobs.

Even worse, the EPA’s greenhouse gas regulations will have no discernable environmental impact. Indeed, by restricting economic growth, Americans will actually have fewer resources to dedicate to environmental improvement.

The regulations will not help to reduce global emissions, either. Both developed and developing countries have grand plans to build more affordable and reliable coal-fired power plants. In fact, the World Resources Institute projects that “1,199 new coal-fired plants, with a total installed capacity of 1,401,278 megawatts (MW), are being proposed globally. These projects are spread across 59 countries. China and India together account for 76 percent of the proposed new coal power capacities.”

Congress and the Obama Administration served American airline companies and consumers well by preventing the EU from levying an unnecessary, unilateral tax. Congress should continue that momentum and prohibit the EPA and other agencies from regulating greenhouse gas emissions and unilaterally imposing a massive energy tax on the American people.

Nicolas Loris is a Policy Analyst at The Heritage Foundation .  Roe Institute for Economic Policy Studies. Loris researches and writes about energy, environment and regulation issues such as the economic impacts of climate change legislation, a free market approach to nuclear energy and the effects of environmental policy on energy prices and the economy.

Read more informative articles at Heritage – The Foundry .