Despite strong appeals from the likes of the US, China, and Russia, a directive to include aviation activities in the EU greenhouse gas emission allowance trading scheme was upheld by the European Court of Justice in Luxembourg yesterday, setting the stage for a potential trade war over charges for carbon emissions beginning in 2012.

Ahead of the court proceedings, US Secretary of State Hillary Clinton sent a letter to Catherin Ashton at the European Commission urging the EU to stop the emissions plan, noting that the US would “take appropriate action” if the directive was upheld. The letter listed 42 other countries also opposed to the scheme, including Brazil, Japan and Russia.

During a press briefing Thursday, Victoria Nuland, spokesperson for the US Department of State, provided more insight into what “appropriate action” may infer.

“Our message to the European Union has been very, very consistent – that there are mechanisms in international aviation in ICAO for addressing the question of greenhouse gas emissions, and that’s where these things should be talked about,” said Nuland. “And what the EU has done is to do an end run around ICAO rather than dealing with these issues there.”

“What we’re looking for is to take these issues back to ICAO where they belong,” added Nuland.

The ICAO, or International Civil Aviation Organization, is an agency of the United Nations created in 1944 to set standards and regulations necessary for aviation safety, security, efficiency and regularity, as well as for aviation environmental protection.

China echoed the American tone today, with Chinese foreign ministry spokesman Liu Weimin stating, “We oppose the unilateral legislation imposed by the EU. We hope the European side will be prudent and practical, and deal with this issue appropriately through consultation with relevant parties including China.”

A commentary by the official Xinhua news agency warned the EU scheme "infringes on national sovereignty, violates international aviation treaties and will lead to a trade war."

"The EU's plan is unfair as it lacks international recognition and support of the law, and also ignores efforts by other countries, especially developing countries, to tackle aviation emissions," Xinhua said.

Last month the ICAO endorsed and agreed to participate on the advisory board of Airport Carbon Accreditation, an independent and voluntary initiative launched by ACI Europe, the European region of Airports Council International, under which member airports commit to reduce carbon emissions from their operations, adhering to carbon management certification standards, with the ultimate goal of becoming carbon neutral.

"Airport Carbon Accreditation is a highly significant initiative by airports for meaningful and measurable action in addressing their greenhouse gas emissions,” said Raymond Benjamin, ICAO Secretary General. “I commend ACI for its success with the program in Europe and for extending it to the Asia-Pacific region, in line with ICAO’s global strategy for dealing with climate change."

Under the new EU scheme, beginning in 2012 all airlines will have to acquire and surrender emission allowances for their flights which depart from and arrive at European airports. The directive was challenged by the industry trade organization Airlines for America (A4A) on behalf of US and Canadian airlines, which argued it imposes a form of tax on fuel consumption and applies the carbon trade scheme beyond the European Union’s territorial jurisdiction.

The IPCC (Intergovernmental Panel on Climate Change) has estimated that aviation’s total CO2 emissions account for 2 percent of global emissions’ impact on climate change.