The EU's ETS and global aviation: why 'local rules' still matter and may matter even more in the future.

Author:Buenger, Michael L.
Position:Emission trading system

    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. Part II discusses the Aviation Directive as an example of the quiet rise of municipal law as a transnational regulatory mechanism that exists independently and apart from traditional multilateral international lawmaking. The Aviation Directive demonstrates that while the last sixty years has witnessed the rise of varied multilateral institutions and efforts, transnational problems can incentivize powerful states to use their municipal lawmaking machinery aggressively to confront cross-border problems. This takes place even when the international community's conventional lawmaking tools fail to achieve desired results or prove too inexpedient. (25)


    Both the authority and the source of public international law are challenged by global forces that raise new questions regarding what exactly constitutes the parameters of the "public," the "international" and the "law" aspects of the system. (26) The public international law system is, in theory, premised on the notion of multilateral legal coordination of transnational state action; that is, consent to coordinating frameworks, such as formal treaties or generally accepted state practices, as the mechanism for regulating state and global conduct. (27) The normative hierarchy articulated in the Statute of the International Court of Justice largely reflects a predisposition towards both the sanctity of the state as the prime actor in international law and the necessity of its consent to regulation. (28) Yet this normative hierarchy of how the system is supposed to work has always been somewhat dubious because the creation and implementation of the international legal order is an inherently chaotic business--a contact sport if you will--comprised of many players operating from different motivations, frequently seeking different outcomes, promoting different concepts, complying for different reasons, and using different language with only marginal refereeing. (29) This is most certainly true today despite the emergence of institutions designed to more effectively broker international behavior over a vast array of subjects. The effects of globalization and economic integration have not only led to a broadening of political power across states, but have accelerated the growth of substantial connections between individual behavior in one state and its impact in another. Thus, notwithstanding debates on the exact economic effects of globalization, (30) it is evident that the political and legal order of the last sixty years is being dislodged and replaced by various modalities of transnational regulation and that there are various actors engaged in the regulatory enterprise.

    In understanding the impact of these developments and what they may mean for the future of public international law as a system, it is necessary to step back from formalistic definitions and categories, (e.g. municipal law versus international law, positivism versus natural law theory) and consider the question of what constitutes international law from a more pragmatic relational, behavioral and functional perspective--that is, what peoples, relationships, institutions and activities are being regulated, by whom, and how legitimate and successful is the regulatory effort. The legitimacy of any regulatory enterprise is hugely dependent upon its successful implementation. As will be discussed, the globe's most influential states have significant reserves of economic and political power available that can be deployed to promote success and therefore add legitimacy to their regulatory efforts, formal categories of law to the contrary notwithstanding. When examined from this more pragmatic viewpoint, therefore, it is clear that formal treaties and recognized customs are not the only legal mechanisms by which states shape global behavior. Law does not act upon institutions and individuals in a vacuum. Accordingly, while the study of public international law has tended to reflect an almost hypertensive concern for categorical subject matter "fragmentation," (31) the real story in international law today is the extent to which conventional normative mechanisms of international lawmaking, e.g., treaties and state custom, are being augmented if not displaced by a rapidly growing list of unconventional normative mechanisms, e.g., non-state regulators, MBMs, and the extraterritorial application of municipal law.

    The Aviation Directive is a case study in this latter development. It illustrates that states, particularly the most powerful and influential states, (32) have a variety of legal tools available outside of conventional international lawmaking by which to regulate and shape global behavior, not the least of which is giving transnational effect to their municipal laws premised upon the notion of substantial connectedness. (33) Extending the ETS to the global aviation sector cannot be seen simply as an act of regulating the activities of a particular industry with commercial ties to the EU. It is, rather, an attempt to reshape global behavior (34) while protecting domestic interests by giving extraterritorial effect to what Dan Danielsen calls "local rules," (35) in spite of protests to the contrary. (36) Does this mean that the sanctity of state is becoming irrelevant? (37) Hardly. (38) It does suggest, however, that as interdependencies and connections between states and individuals grow, solely formalistic notions of international law and conventional modes of international lawmaking will not define the regulation of transnational conduct. (39) Rather, pluralism, non-state action, extraterritoriality, and unilateralism are becoming as much a part of the globe's legal frameworks as is traditional multilateralism. (40) This may be an unnerving development for an international law purist seeking clean divides between "public," "private," "international," and "municipal," but it is a real and largely uncoordinated development nonetheless--one that is difficult to categorize and...

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