When the European Union decided last month to press ahead with a plan to force foreign airlines to pay for the carbon pollution generated by each flight landing at its airports, Brussels policymakers justified their action as the only way to forge a global solution to one of the fastest-growing sources of greenhouse gas emissions.
The policy has indeed succeeded in uniting much of the world – against the EU. In an unlikely diplomatic chorus, the US, China, India and Russia have all lambasted Europe’s plan to extend the reach of its emissions trading scheme (ETS) – a complex regulatory system in which companies such as cement and steel manufacturers are supposed to buy tradeable permits in order to pollute. Beijing last week barred its airlines from the system. Next week, the US and China will gather with more than 20 other nations in Moscow to plot a counter-strategy, including possible retaliation some fear could lead to a trade war.
Beneath the international uproar lurks an inconvenient truth: the carbon market, the world’s largest, and the linchpin of Europe’s effort to lead the world in the fight against global warming, is in turmoil at home.