UK favours carbon trading over jet fuel tax

LONDON, Oct 5 (Reuters) Britain wants to curb rising aviation greenhouse gas emissions through a European trading scheme and possibly a tax on passengers, rather than a British tax on jet fuel, climate change minister Ian Pearson said.

Emissions of heat-trapping carbon dioxide from aviation rose 85 per cent between 1990 and 2004 says the European Union, and its part in mankind's total contribution to climate change is set to rise.

Britain favours a tough approach to including the sector in a European carbon trading scheme -- which caps industry emissions but allows firms to buy pollution cuts from each other -- rather than a unilateral tax on jet fuel, Pearson said today.

''I don't think a unilateral (fuel tax) approach would be effective,'' he told a conference on aviation and the environment, referring to possible resulting distortions to flight paths.

But Britain was also considering a tax on air passengers, possibly through requiring them to offset emissions by funding green initiatives like tree-planting.

''We are exploring using this (air passenger duties) to capture emissions costs. We should maybe move to a mandatory (offsetting) system perhaps linked to APD.'' Britain wants to include all flights in and outside Europe in the EU carbon trading scheme, rather than just flights within Europe, Pearson said, ahead of proposals the European Commission will detail next year.

''I think that would be the wrong way to go,'' he said of just including flights within the EU.

Including flights outside the EU could set up a battle with the United States which have so far taken a softer approach on capping greenhouse gas emissions.

''Some countries outside the EU might have a problem with that,'' Pearson said of his viewpoint, but added he saw no legal barrier to the move.

REUTERS PB BST1708