This past weekend, the Guardian reported on a “green ultimatum” from the EU that could force US airlines to either capture the environmental costs of carbon emissions from aircraft or to face restrictions on flying permissions to EU airports.

According to the Guardian, EU Transportation Commissioner Jacques Barrot intends for the issue of carbon credits to play a significant role in the negotiation of a second phase of the EU-US Open Skies Agreement, a treaty that permits any EU airline and any US airline to fly between any point in the EU and any point in the US. The first phase of the agreement goes into effect on March 30, 2008, and discussions on the second phase are scheduled to begin in May 2008.

The Guardian notes that, under the Open Skies policy, “EU states can suspend flights from the US to Europe if insufficient progress is made on a second phase by 2010.” European air carriers have expressed competitiveness concerns over an EU Directive designed to progressively incorporate aviation emissions into the European emissions trading scheme — beginning with flights between EU airports in 2011 and expanding to any flight arriving at or departing from EU airports in 2012. The announcement by Mr. Barrot suggests that the EU may try to level the playing field for European carriers through multilateral treaties, in the absence of an international agreement on carbon emissions from civil aviation.

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