Countries like the U.S., Canada, and China had serious objections when it was first announced, with U.S. airlines challenging it in court (and failing), and even the Whitehouse getting involved.
But why were they objecting? What it actually amounts to is a very small charge per passenger (e.g. $3 on a $300+ Atlantic crossing). It just gets swamped by all the other charges (like taxes and levies for extra baggage).
Now China has upped the stakes by banning it's own airlines from joining the scheme or raising prices on it's flights, effectively telling them to ignore the change.
This means that the EU will be forced to fine the airlines and, if they refuse to pay the fines, stop them flying into Europe. China might do the same to EU airlines in response.
Looks like this one could get nasty. And all over a tiny charge! What on earth is really going on here?
Well, the USA and Canada don't like carbon taxes on principle, and they probably fear that the ETS will grow into a worldwide scheme by the back-door.
But the Chinese? Who knows? Maybe it's a commercial judgement: An extra charge too far that might be imitated by other regions. Maybe they've got a deal going with the Americans ("Break this scheme for us and we'll give you [insert favour here] in return".
Whatever, I can't remember the last time I heard about the Chinese backing down over anything. And the EU won't want to dump this cornerstone policy.
This will be an interesting one to watch.
Background here. China's objections here.
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