The EU's ETS and Global Aviation: Why "Local Rules" Still Matter and May Matter Even More in the Future

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On January 1, 2012, the European Union ("EU") extended its Emission Trading System ("ETS") (1) to a significant part of the global aviation sector (2) notwithstanding the protests of numerous states (3) and objections from some European businesses. (4) With limited exception, aircraft departing from or landing at an aerodrome in an EU Member State, regardless of the state of registry, origin of flight, or actual time spent in EU airspace, will be subject to the ETS for the entire length of the flight. (5) This has become known as the "Aviation Directive" and represents a considerable step in the EU's efforts to promote its robust climate change agenda, efforts that are marked as much by unilateralism and extraterritoriality (6) as they are by multilateral engagement. (7) The EU's unilateral extension of its municipal law (8) to the global aviation sector is unprecedented only in scale, not in originality, as other states have acted similarly in other areas of legal life. (9) The ETS has, however, become one of the more aggressive and controversial examples of the unilateral use of municipal lawmaking power to affect a wide-range of activities, peoples, and states across the globe. The rationale for the EU's action is best summed up in the remarks of Climate Commissioner Connie Hedegaard:

   So I agree that we cannot now afford to sit in Europe and just wait
   for whatever comes next in the international negotiations. That is
   of course precisely why, over the past [eighteen] months or two
   years, the Commission has come up with a communication on how to
   move our targets, with our low-carbon roadmap and the energy
   roadmap; has proposed an energy efficiency directive; has come up
   with substantial Multiannual Financial Framework proposals with a
   substantial climate, environment, energy-efficiency and
   resource-efficiency component; has come up with a proposal on
   energy taxation; and has come up, as requested, with tasks and
   values.... This is very much proof that we in the Commission do not
   think we should sit idly waiting for the big international
   agreement. We must continue to move forward in Europe. (10)

As Commissioner Hedegaard's statement demonstrates, attitudes towards the meaning of the state, the concept of sovereignty, (11) and the traditional mechanisms of international lawmaking are undergoing dynamic changes. (12) The advent of the United Nations, (13) the wide acceptance of human rights, (14) the use of powerful trading agreements to break down national barriers, (15) the globalization of judicial power, (16) the rise of institutions such as the EU, the World Trade Organization ("WTO") (17) and non-state actors, (18) multinational humanitarian interventions, (19) the formulation of jus cogens principles, (20) and the increasing use of market-based measures ("MBMs") to regulate transnational conduct (21) represent emerging forces that challenge the very foundations of the public international law order. Andrew Halpin and Volker Roeben note that, "The broader canvas of globalisation extends greater artistic license to the legal imagination. In part, this is a matter of opportunity. In part, this is a matter of need." (22) The artistic license afforded by rapid globalization has not only affected the types of relationships and behaviors to be regulated, i.e., subjects and subject matters, but perhaps more importantly who decides such issues and in what breadth.

This article examines the EU's extension of its ETS to the global aviation sector as a compelling example of how the most influential states or blocs of states (hereinafter "states" (23)) use their municipal lawmaking powers to manage behavior well beyond their borders. (24) Part I presents some context and examines the ETS, its application to the global aviation sector, and the Court of Justice of the European Union's ("ECJ") analysis of its legality under its view of current principles of international law. …