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European Commission Gives Russia an Additional ˆ2 Million for Kyoto Protocol
// Project
It has been almost ay ear since Russia signed the Kyoto Protocol. Since then, not a single document on its enforcement has been adopted. Officials are mired in conciliations. Tired of waiting, the European Commission office in the Russian Federation announced yesterday that it was issuing an addition ˆ2-millioin grant for the creation of laws and institutions in Russia for the implementation of the protocol. Analysts say, however, that there is little chance that that money will have any significant impact.
Moscow's accession to the Kyoto Protocol has been worth billions of dollars to Russia. That is acknowledged both by European officials and those of the Russian Ministries of Natural Resources and Economic Development and Trade, which were in favor of its ratification. When it came to preparing the documents on the controls and obligations of Russian companies under it, the officials floundered. The former allies broke up into two camps. The Economics Ministry insists on a liberal approach, giving businesses the chance to reduce emissions voluntarily. The Resources Ministry is in favor of making those limitations mandatory. A unified commission on the implementation of the protocol was set up, at which the disagreement became final.
All this time, the European Commission has been trying to coax at least a little progress out of Russia – so that European countries could buy rights to additional emissions from Russian companies at half or three-quarters the price those rights cost on the domestic market. The first $2 million were given to Russia to set up a legal base for monitoring and creating a register of greenhouse gas emissions under a TACIS project. Yesterday, the European Commission office in Russia announced that “on October 6, a new project with a budget of ˆ2 million will be presented at the office of the European Commission in Russia to create mechanisms for the implementation of the Kyoto Protocol.” The Economic Ministry was the client for both projects and the money for the new project will be shared among a consortium to include the British ICF Consulting Ltd. and Hogan & Hartson and the Russian Institute for Global Problems of Energy Conservation and Ecology. Stepan Dudarev, director of the noncommercial partnership National Carbon Union (made up of Russian companies that are prepared to limit their emissions voluntarily and trade in the surplus of permissible emissions created by the use of energy-saving technology), said that “although additional money may advance the situation somehow, it will not change anything principally… What has been done on the TACIS for almost half a year has no correlation with what is being done in the Economics Ministry. Their innovations are unlikely to be used.”
And what is the Economics Ministry doing? Boris Morgunov, assistant to the Economic Minister for ecology said yesterday that “The Ministry of Economic Development and Trade has developed a draft resolution for the administration on the registration of climatic investment projects.” He added that the resolution includes a mechanism for companies to file applications with the administration to receive approval for so-called joint implementation projects, under which companies, with the approval of the administration, can transfer to foreign enterprises emissions reduction units that arise from joint investment projects to raise energy effectiveness and reduce hydrocarbon gas emissions. He said that the draft has been handed over to interested agencies for conciliation. Only one thing can account for this rush. On June 28 of this year, Orenburgenergo and Khabarovskenergo signed an agreement with the Danish Environmental Protection Agency to sell the greenhouse gas emissions reduced as a result of the reconstruction of the companies' generating stations. RAO UES of Russia planned to make ˆ20 million on the deals. But, on June 28 and 29, the respective regional prosecutor's offices declared the deals illegal because such transactions are not regulated by law and the Kyoto Protocol requires written government approval for them.
If the deals don't go through in October, they will be annulled. An Economic Ministry spokesman said that negotiations are underway at present with the Danish Environmental Protection Agency on extending the deal. “Our colleagues have shown understanding of the fact that the preparation of the necessary governmental norms takes this much time,” he said.
Kommersant will continue to follow the development of events.
Alexey Shapovalov
All the Article in Russian as of Oct. 05, 2005
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