U.S. Transportation Secretary Ray LaHood is willing to denounce the EU’s emissions trading system (ETS) as a “lousy, bad policy,” but will not support a Congressional mandate to block U.S. air carriers from participating in the system or, for now, back the aviation industry’s call to file a formal complaint at the International Civil Aviation Organization (ICAO).

“At this point, we’re not prepared to support this legislation, this bill,” LaHood told Sen. Kay Bailey Hutchison (Texas), the top Republican on the Senate Commerce, Transportation and Science Committee, which held a June 6 hearing on the issue.

Hutchison was seeking administration support for a bill that passed in the House of Representatives last fall with a companion measure introduced by Sen. John Thune (R-S.D.) and Sen. Claire McCaskill (D-Mo.). The bills would prohibit U.S. air carriers from participating in the ETS.

Explaining his position, LaHood said a letter sent about six months ago with Secretary of State Hillary Rodham Clinton asking the EU to reconsider its system and meetings with European transportation ministers about these objections have had their effect. “Some have complained that I’ve been too frank with them . . . They know we think this is a very lousy, bad policy. They know that. I told them,” he said.

At the same hearing, trade associations Airlines for America (A4A) and the National Business Aviation Association both spoke out against the system, contending that the ETS unfairly taxes U.S. airlines.

“Make no mistake, the EU ETS is not about the environment,” said Nancy Young, VP-environmental affairs at A4A. “It is about a new source of revenue for a cash-strapped Europe. Indeed, none of the monies collected are required to be used for environmental purposes.”

A4A also argues that the U.S. should challenge the EU’s system under Article 84 of the Chicago Convention.

LaHood said that the administration is currently debating whether the U.S. should take that step, but, he concludes, “There’s been no decision.”

The EU’s representative on the panel, Jos Delbeke of the European Commission, told the hearing that there may be a solution, and while “there is no prospect of simply suspending the EU’s legislation . . . the EU is open to modifying it,” should ICAO issue an initiative to reduce aviation emissions.

Annie Pestonek of the Environmental Defense Fund said a better solution to the emissions problem would be to work through ICAO. “But ICAO has wrangled with this issue for 15 years. It’s only because of EU ETS that ICAO has made more progress on this issue than ever before.”

For now, Pestonek said that the penalty is not as onerous as portrayed. On a recent flight to Europe, United raised her roundtrip fare $6 for an emissions surcharge, she said, adding that the this more than covered the cost of complying with the ETS.

Senators at the well-attended hearing were nearly unanimous in arguing that the EU could have created a better system. Many senators listed numerous flaws in the ETS–from claiming that it impinges on U.S. sovereignty to it being unfairly applied to U.S. airlines.

But committee Chairman Sen. Jay Rockefeller (D-W.Va.) and Sen. John Kerry (D-Mass.) both noted that the U.S., its airline industry and international institutions, such as ICAO, have moved slowly to force a reduction in greenhouse gas emissions. “If this wasn’t so sad, you might laugh about what’s going on here . . . because it really represents a failure of people to be serious about an issue, and that’s why we’re here,” said Kerry, who leads the Senate Foreign Relations Committee. He added that the issue is dealing with controlling emissions.

Rockefeller also took aim at the business aviation community, quoting an Environmental Protection Agency study that says emissions from general aviation aircraft increased 67% between 1990 and 2010. Ed Bolen, president of the National Business Aviation Association, retorted that the general aviation community has been a pioneer in developing new, more fuel-efficient technologies, including winglets, composites that lighten aircraft weight and GPS navigation, allowing for more direct, more fuel efficient flight paths.