Authors: Chase Foster
March 20, 2012
John F. Kennedy School of Government, Harvard University

This paper is a Policy Analysis Exercise by a student at the John F. Kennedy School of Government, Harvard University. This research was supported, in part, by the Ash Center for Democratic Governance and Innovation at Harvard Kennedy School.

At the beginning of 2012 a new European law expanded the European Union’s emissions trading system (ETS) to include aviation GHG emissions. The law has prompted diplomatic difficulties because it counts emissions produced by flights to and from non-EEAS countries in its overall carbon cap. The United States government has responded negatively to this development and the Obama Administration has threatened to engage in retaliatory measures if the law proceeds. This report for the European Parliament Liaison Office analyzes American policy on the recently enacted EU ETS and makes recommendations for improving the European negotiation position vis-à-vis the Obama Administration.

Three main questions are answered: (1) What explains the Obama Administration’s recent response to the expansion of the European Union emissions trading system? (2) What are the underlying motivations and interests on this issue among various stakeholders in American government and industry? (3) How can the European Union improve its negotiating position with the Obama Administration?

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