CLIMATE CHANGE: Russia Eyes the Clean Way

By Kester Kenn Klomegah Reprint | | Print |

Kester Kenn Klomegah

MOSCOW, Mar 19 2007 (IPS) - Foreign institutions are stepping in to help Russia cut emissions within its commitments to the Kyoto Protocol.

Under the Protocol, Russia is set to cut emissions to agreed limits relative to 1990 levels over the period 2008-2012. It has not gone far in that direction.

The Russian Carbon Fund, Merrill Lynch and Dresdner Kleinwort, the investment banking arm of Germany’s Dresdner Bank, have said in a report that they would assist Russia trade some of its carbon assets and play an active role in reducing emissions.

Emission of greenhouse gases such as carbon dioxide and methane are believed to lead to global warming and consequently climate change.

Other than cutting emissions, one of the instruments provided to limit them is the carbon trading system in which companies in industrialised countries can earn ‘points’ through clean technology investments, which can then be sold to companies that emit more than their share.

“We will assist Russian companies to develop and commercialise their carbon assets,” Morten Prehn Sorensen, director in charge of climate change at the Russian Carbon Fund told IPS.

“We will find suitable environmental technology, finance investments, and do all documentation to international standards and secure the best possible carbon prices on the projects where we partner up with Russian companies.”

Headquartered in Copenhagen, Denmark, the Russian Carbon Fund develops carbon emissions reduction projects in Russia and the ex-Soviet republics.

Experts say Russia has much cleaning up to do, especially in the oil and gas industry. The Russian Carbon Fund has 82 projects in hand that could lead to emission reductions of the equivalent of 140 million tonnes of carbon dioxide equivalent in the 2008-2012 period, Sorensen said.

The projects would be developed under the Joint Implementation scheme within the Kyoto Protocol that provides for clean industrial projects led by industrialised countries in Russia and East Europe, through which they earn points that can then be traded.

Last month Merrill Lynch announced a strategic alliance with the Russian Carbon Fund. “This alliance is good for the environment and makes economic sense, which we believe should be the primary drivers when dealing with this global issue,” David Sobotka, global head of commodities at Merrill Lynch told IPS.

Dresdner Kleinwort said it had launched a carbon purchasing venture with Russia’s Gazprombank which owns the world’s largest gas reserves.

The market for carbon trading is attractive for western businesses and they are hunting for new projects that are attractive in themselves, and additionally give them carbon trading benefits.

“It’s quite obvious that with the launch of the first commitment period, Russia may become one of the largest carbon emissions sellers,” Michael Kozeltsev, executive director at the Russian Regional Environmental Centre, a non-profit organisation, told IPS.

“But even more attractive seems the prospect of realisation of Joint Implementation projects that can attract new investments in the Russian economy, promoting a decrease of its carbon-intensity and increase of its energy-efficiency.”

Not everybody is convinced these moves will bring a reduction in emissions.

“The government treats the Kyoto Protocol as something boring, and as a result there seems to be no real interest in it spite of the economic prospects connected with Kyoto mechanisms,” Vladimir Tchouprov from Greenpeace Russia told IPS.

Utilisation of biomass from agriculture and forest industry could provide six to seven percent of existing primary energy consumed in Russia, he said. The government is also making no moves towards energy conservation that could lead to 40 percent savings, he said.

“And there is still no decree for carrying out Joint Implementation for Russia. At first Russia kept statistics. But now, it’s not in control. Moreover there is no policy to reduce emissions. The official energy strategy of the government is just to shift from gas to coal and save gas for export.”