EU ETS Profitable for Airlines: Rossetto

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Oct. 04 (Bloomberg) -- Daniel Rossetto, Managing Director at Climate Mundial, discusses the EU carbon market and its impact on airlines. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

The rest of the world is not happy with it because everybody is caught in the european net.

We have to find a way out of that.

How much progress do you think is going to be made over the last few days?

It is a reiteration of what has been a concern for long times from some of the countries outside the eu.

The reality about this proposal from europe is that the financial impact of the system on airlines itself is minimal.

There is an opportunity for airlines to make profits from emissions trading because they increase the price of tickets to consumers.

That has enabled the airlines to recover those costs associated with the carbon.

This is much more of a political issue which has been going on for a significant amount of time in which some countries in particular, some developing countries are unhappy about the idea that the european union imposes a cap and trade system.

If you listen to air france, the intra-chinese market is about to explode.

They don't want to be caught in the net.

You have a solution which i have heard in various forms elsewhere which is, at the moment, europe takes the revenue.

What we put that in a bigger pot?

That is an important point.

I have been talking about that for quite some time.

At the moment, you have got flights being covered from destinations outside europe coming into europe that have an obligation to furnish carbon allowances.

The revenues associated with the purchases of these carbon allowances flows into the treasuries of the european member states.

It is the european governments who have the full discretion on how those moneys are spent.

That is one of the key issues that applies and i think if there was some discussion about an alternative structure whereby those funds were quarantined for a fund which could reinvest into emissions reducing technologies for both airplanes -- a global fund with global governance as well.

Not just a european structure but global.

That is a much more viable solution.

The template can need solution.

It does.

The obvious issue that we have at the moment is that this program has been in place for a long time.

The revenues associated with selling the carbon permits have been featured and accounted for in a lot of the european government budgets.

There is going to be a budget impact associated with introducing an alternative policy.

How would the application -- aviation industry feel about that?

They are looking for some type of hypothecation of these revenues.

That is taking the revenues that are collected through the sale of the carbon permit and reinvesting them into technologies.

That is the thing that is going to drive emissions reductions in a much more serious way.

We believe there.

Thank you very much for joining us.

Thank you very much indeed.

For those listening on bloomberg radio, the first word is coming up next.

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I am @guyjonhnsontv.

This text has been automatically generated. It may not be 100% accurate.

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