The EU Emissions Trading Scheme and the Court of Justice: The “High Politics” of Indirectly Promoting Global Standards

Abstract

The European Union (EU) Emissions Trading Scheme (ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for the cost-effective reduction of industrial greenhouse gas emissions. Moreover, according to the European Commission, it is the first and biggest international scheme for the trading of greenhouse gas emission allowances, including sophisticated and far-reaching penalties. Notably, however, the scheme arose out of a failure at the international level to agree on global standards. When an amended directive included aviation under this scheme beginning in 2012, it ignited a global controversy that came before the Grand Chamber of the Court of Justice in December 2011. In its decision, the Court and Advocate General explicitly explain that the EU ETS regime arose because of the failure of the International Civil Aviation Organisation (ICAO) to evolve a global regulatory scheme. To some, the decision of the Court of Justice on the EU ETS represents a definitive view on the legality of the EU's ambitions to uphold high environmental standards and to compel others to uphold these standards also.