ussia has almost finished ratifying Kyoto, which aims to stabilize emissions of greenhouse gases and awaits President Vladimir Putin signature to come into force worldwide, and must now develop the mechanisms necessary to implement the pact.
A key part of Kyoto is the creation of emission trading schemes, allowing companies to buy and sell their rights to pollute internationally. The EU system is already seeing thousands of trades a day.
The European Union market, covering 12,000 businesses, will be made compulsory for companies in January and a similar North American market covering Canada and some parts of the United States — which has not joined Kyoto — is being discussed. “Russia cannot integrate as a full member of the EU system because it is not a member of the EU but our system could be developed so it is complementary,” said Vsevolod Gavrilov, the Economy Ministry official charged with drawing up Russia’s mechanisms for implementing Kyoto.
“We have already gained a positive response at a working level from EU officials about creating a complementary system … A confirmation of this signal at a high level would be a very strong impulse toward creating a trading system.
“We should be not only complementary to the EU system but also to the North American system.”
NOT SUFFICIENTLY DEVELOPED
But he warned that Russian laws were not sufficiently developed to move immediately to a compulsory trading system on the EU model, and such a system may not be developed before 2008, when the Kyoto system starts operating.
“We are not ready to implement this approach of mandatory standards right now for all Russian economic agents because the EU decision was based on a history of environmental regulation since the ’80s,” he told Reuters in an interview.
“To change these laws immediately is dangerous, you need to change them over a period — maybe three to five years.”
But Russia should be able to earn billions of dollars from trading its spare quotas, he said.
Most analysts say the post-Soviet economic collapse has left Russia with as much as a third of its pollution capacity to trade abroad, and its inefficient factories could be modernized to reduce emissions further.
“If realization of the Kyoto Protocol stays on a (trading emissions basis) then it is unlikely that investment will exceed one, two or three billion dollars by 2012,” he said.
“But if the markets facilitate regular investment, trading will make up only a proportion of the total investment. Then we could see three, four or five times that much.”
Under Kyoto’s terms, developed countries accounting for 55 percent of global emissions must ratify for it to come into force. Top polluter Washington pulled out in 2000, saying it was too expensive, leaving Russia with the casting vote.