The concept of this paper was originated in ICTSD’s research and policy dialogues under the Global Platform. The study shows that the impact on net emissions covered by the EU ETS could be large, as with growing aviation emissions, operators will have to buy allowances from other sectors in the EU ETS. This, in turn, will drive down emissions in these other sectors. There may also be changes in competitiveness and tourism. The impact on trade between Europe and developing countries is likely to be small, though this may vary between products and regions.