This European Emissions Ruling Pretty Much Dares China To Start A Trade War

aeroplane airline plane airport jet fly flying

A court ruling today by the EU found that all flights to and from Europe can legally be charged additional taxes for their carbon emissions.

The Guardian reports that this ruling by a European Court of Justice advisor is a big hit to countries who adamantly protested the tariff, including China, the U.S., India, and over 20 other nations outside of the EU.

With this ruling, China has further reason to back up its threats of a trade war with the EU.

Not only might this ruling create a trade war, it could put EU airlines at a competitive disadvantage ifthey cannot pass on costs to passengers.

Initial estimates say that the added taxes would cost passengers around $21-45 more per flight to and from Europe.  Some countries are also worried that the higher prices will hurt the tourism industry.

The ruling today is only an indicative ruling, or a preliminary opinion, but it is common for the final decision by the court to follow the indicative ruling.  According to The Globe and Mail, the Air Transport Association was “disappointed” with the advisor’s opinion today, citing the tariff’s violation of international law.

Flights account for 2-3% of global emissions, so the final ruling of this emissions tax could be a big step in the fight against climate change, but it could make the EU a martyr for the cause.  Inclusion of non-EU countries could spark an immense international trade war, and exclusion of non-EU countries would put European businesses at a competitive disadvantage.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.