A plane flies over the Munich airport
A plane flies over the Munich airport - 
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SCOTT JAGOW: We've told you about the Open Skies agreement between the U.S. and Europe. It's supposed to lower fares and bring more competition to transatlantic flying. Europe has a new project called Clean Sky. Our man in London, Stephen Beard is with us. Tell us what this is, Stephen.

STEPHEN BEARD: This is a $2 billion project to develop a new generation of greener and quieter aircraft. And it aims to cut jet carbon emissions by 20 to 40 percent and reduce noise pollution by half. And the whole thinking here is this is designed to offset the environment impact of the huge projected growth of air travel over the next decade or so.

JAGOW: Well Stephen that sounds wonderful, but somehow I have a feeling that it's not as simple as that.

BEARD: No, I mean the European Commission is bracing itself for a blast of criticism from Washington. This is a 50-50 public-private project with the E.U. taxpayer putting in a billion and European companies like Airbus, Rolls Royce, Saab putting in another billion. And the worry is, Washington is going to say 'this is a subsidy.'

JAGOW: Well do other countries have anything like this?

BEARD: Well the European Union argues that the U.S. does: the Aeronautic Research and Development Policy. So the European argument is we need to catch up with the U.S., which is actually ahead of Europe in this area. And the European Union argues that ultimately the beneficiary will be the planet.

JAGOW: Alright, Stephen Beard in London, thank you.

BEARD: OK Scott.