China has passed a law banning Chinese airlines from complying with an EU directive to buy carbon permits to offset CO2 generated on passenger and cargo flights to and from EU destinations. It’s the strongest step yet in global resistance to the EU requirement, which India, the US and most other countries around the world say is illegal. (Illegal because the EU wants to calculate this fee on total mileage to and from an EU destination rather than on travel within the EU.)Chinese airlines who pay the EU fees will be punished in China. If they refuse, the EU may ultimately ban the airlines from EU airspace. China has promised to retaliate. India has also promised retaliation against European companies if the proposal is enforced.There is plenty of time to argue about this; the first payments won’t be due until 2013, and the EU has some discretion about levying fines.But the odds seem stacked against the EU as the financial crisis has sent its diplomats to China (most recently in the form of Chancellor Merkel) to beg for bailout help. Chinese leaders are likely to push for concessions on the airline deal; if they are to be the EU’s paymasters they expect some respect.Today’s EU seems too weak, too distracted and too much in decline to fight the whole world over carbon; we shall see.