Positive Environment News

Russia Needs Cash Guarantee to Approve Kyoto - Source

Date: 29-Sep-03
Country: RUSSIA
Author: Darya Korsunskaya

Activists have watched the Kremlin for signs it would direct parliament to approve the pact, which aims to cut emissions of gases that cause global warming, before an ecological conference opens in Moscow on Monday.

But the source dashed such hopes.

Under the treaty, countries can buy or sell pollution quotas. Russia would have quotas for sale because the protocol would set its emissions ceiling at the 1990 level, before the post-Soviet collapse shut down much of its industry.

However, the source said Moscow was worried other countries with spare capacity could muscle Russia out of the market.

"We need to receive guarantees either of joint projects, or a guaranteed purchase price for our quotas. These guarantees have to be given either by foreign companies, or by countries," the source told reporters.

If a foreign company invested in cutting a Russian factory's emissions, analysts suggest the company could in effect earn cheap quotas which could be used at home to continue producing greenhouse gases.

But the source said such deals would have to be finalized before Russia would approve the protocol.

"We are not prepared to buy a pig in a poke," he said. "We cannot say if ratification would be good without such guarantees."


Under the protocol's complex weighting system, countries responsible for 55 percent of emissions must approve it to bring it into force. The United States - the world's biggest polluter - has backed out, leaving Russia with the casting vote.

Russia's industry currently emits about one third less greenhouse gases - primarily carbon dioxode - than entitled to under the agreement.

But the value of the protocol plunged for Russia after President Bush pulled out in 2001. U.S. firms would have been major buyers of Russia's quotas.

The source said Russia was committed to ratifying the treaty, but would not trust simple promises. He cited bad experience in its attempt to join the World Trade Organization (WTO) and negotiate with the Paris Club over debts.

"When they have already misled us once, we are not going to hurry to ratify. They say to us, approve it, and then we'll work on joint projects. No, I know how this would turn out," he said.

"To realize the joint projects Russia needs $3-5 billion a year...We are interesting in modernizing the gas and power sectors, and housing services and utilities."

President Vladimir Putin is scheduled to open next week's conference, and green groups had hoped he would commit Moscow to ratification in his speech, but the source said this was unlikely.

"Putin will appear at the conference in Moscow, but it looks like he won't say anything about the Kyoto Protocol."

© Thomson Reuters 2003 All rights reserved

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