TalkClimateChange

EU ministers are set to agree a deal which will see aircraft emissions continue to rise, and potentially offer a large cash bonus to airlines.

Environmental campaigners will be unsatisfied with a scheme which is likely to do little to reduce emissions, while the rest of us can grumble at funding another EU bureaucratic nightmare which will provide plenty of additional meetings to which EU officials can be chauffer driven in their fleet of (not very green) Audi A8 limousines.

Why is this a lose-lose situation? There are several fundamental flaws in current proposals:

Firstly, environmentalists will note that although emissions are capped, airlines are free to buy additional carbon credits from other industries if required, hence maintaining aviation growth and cheep stag-nights in Prague.

Secondly, in an attempt not to rock the boat too much by actually limiting growth in aviation, allowances granted to airlines will be over generous. This was also the case when the same system was applied to the power sector some years ago - some firms made large profits from selling excess credits which they were not required to pay for in the first place.

Finally, for those of us who believe that aviation is an important enabler of future prosperity we can note that the only achievement will be that of keeping bureaucrats feeling busy and important whilst waiting for their index-linked pensions to mature. This does at least stop them from meddling with real problems.

At the same time as boosting the aviation industry the EU is planning to get heavy on its auto industry.

In a move described by Peugeot as “anti-ecological, anti-social, anti-economical and anti-competitive in relation to non-European Union carmakers”, the EU plan to start imposing penalties as of 2012 on manufacturers who exceed a fleet average of 130 grams of Co2 per kilometre.

We believe that this may or may not be a competitive disadvantage, depending on future emissions regulations in the rest of the world. Encouraging firms to develop efficient auto technologies could be a future advantage if other car producing nations introduce similar legislation in the future, providing euro manufacturers with a technological lead.

But with the US unlikely to introduce a 35mpg average requirement, manufacturers such as BMW, Audi and Mercedes may find themselves forced to develop smaller cars which will be of little relevance in the important US market.

EU officials may also be forced to find alternative carriages in which to attend future meetings.