TPT May 2012

G lobal M arketplace

As it happens, 85% of the permits are being awarded at no cost, and the remaining 15% are initially expected to add only about $2 to the cost of a transatlantic passenger ticket. But, wrote Aaron Wiener in Spiegel International Onlin e , “For representatives of 23 countries who convened in Moscow on 22 February, the price is too high.” (“Global Opposition Grows against EU Emissions Law,” 24 February) The US, China, Japan, Russia and India are among the signatories of the so-called Moscow Joint Declaration, which expresses their disapproval and their intention to coordinate punitive measures against European airlines. This retaliation might include taxes on airlines that fly into or over their countries. Beijing has already banned its airlines from joining the emissions trading system without its permission, and has threatened to take unspecified reactive measures. Airlines, which have opposed Europe’s unilateral action, cheered the Moscow declaration. Tom Enders, CEO of Airbus, the manufacturing unit of the European aerospace company EADS, had spoken for many of them when he expressed increasing concern at the potential fallout from the Emissions Trading System. “I am very worried about the consequences of that,” Mr Enders told Reuters on 13 February, at an aviation conference ahead of the Singapore Airshow. “What started out as a solution for the environment has become a source of potential trade conflict, and that should be a worry for all of us.” Chinese sensibilities are a particular anxiety. China’s domestic air traffic quadrupled in the past decade and is expected to keep growing at more than 7% a year for the foreseeable future, according to Airbus. And Boeing, its American rival, expects China to be the second-biggest market for new aircraft, after the US, at least until 2030. As a sign of its displeasure over the developing EU plan, China last year delayed the final signing of a deal for ten Airbus A380 double-deck, wide-body, four-engine jet airliners worth $4bn for Hong Kong Airlines. In the mid-1990s, it refused to buy French products like Airbus planes in retaliation for France’s sales of fighter planes and frigates to Taiwan. › If the EU law remains in place, Spiegel ’s Mr Wiener wrote, “The European Commission estimates that it will reduce airline emissions of carbon dioxide by 183 million metric tons by 2020 – a drop of 46% compared to what emissions would be without the law. According to the [Geneva-based] Intergovernmental Panel on Climate Change, the aviation industry is currently responsible for about 3.5% of human-caused global warming.” Energy The other side of renewable: a Danish imperative to establish reliable outlets for excess wind power “The incidents have highlighted the risks of expanding the reliance on renewable sources like wind before necessary grids, storage,

Spotlight on: Europe As the euro crisis eases, multinationals step up their investments in the zone and elsewhere on the Continent With a shift in emphasis toward the revival of growth, European officials and politicians are meeting with success in attracting private investment from big global firms. Important commitments of new money in Europe include the following: › Infosys, the big Indian technology consulting and outsourcing company, plans considerable investments to expand its ranks of software professionals and to set up additional sales and consulting offices in its core northern European markets: Britain, Germany, France, Switzerland and the Benelux countries. › In 2011, Europe for the first time edged out the US as China’s main focus of overseas investment. So far this year, China’s European deals have included the purchase, by the State Grid Corporation of China, of a 25% stake in Energias de Portugal, the country’s principal utility. › Michelin, one of the world’s largest tyre makers, intends to invest more in plants, equipment, research and development on the Continent this year and beyond. The French company also plans to spend close to $80mn to update machinery at its factories in Britain over the next five years, and is also looking at possible expansions in Eastern Europe. American firms also figure prominently in the European investment trend: › Dow Chemical expanded its presence in the region by allocating some $13.2mn for a new water-desalination research centre on Spain’s eastern seaboard, about 50 miles southwest of Barcelona; › In Ireland, the computer products giant Microsoft recently invested $130mn to expand a data centre outside Dublin; › In Germany, General Electric made a $40mn investment in expanding research and development in energy, aviation, and medical technology, and is putting an additional $74mn into broadening its commercial presence there. A European Union plan to impose emissions fees on airlines meets with fierce opposition from 23 countries The European Union’s Emissions Trading System, introduced 1 January, requires airline companies serving the EU to pay for their greenhouse gas emissions by means of a system of special permits. Airlines that do not obtain the necessary permits will incur fines from the EU beginning in April 2013. If they fail to pay, they could be denied the freedom of Europe’s airspace.

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M ay 2012