April 2007 BRIEFING PAPER RUSSIAN CLIMATE POLITICS: LIGHT AT THE END OF THE TUNNEL? By Anna Korppoo 1 and Arild Moe 2 Russian climate politics were certainly a talking point a few years ago due to the country’s decisive role in the entry into force of the Kyoto Protocol. The views of various potentially influential officials were reported by the world media almost on a daily basis. Since the ratification of the Kyoto Protocol by Russia in 2004, and its entry into force, Russian climate politics have received less attention. In this paper we update our previous analyses of Russian climate politics and policies, and report the latest developments, including material from the discussions in the ‘JI in Russia’ workshop 26 March 2007 organised by Oxford Climate Policy in co-operation with Climate Strategies. The main tasks of this paper are to review: • the readiness of Russia to implement the Kyoto mechanisms • the fulfilment of the compliance requirements of the Kyoto Protocol • the current political debate about climate policy by various key players • the emerging discussion on the post-2012 positions of Russia. 1 Associate Research Fellow, Fridtjof Nansen Institute, email: [email protected] 2 Senior Research Fellow, Fridtjof Nansen Institute, email: [email protected] Background cooperate. One of the explaining factors is the fact that climate change is still In Russia the climate change issue has not regarded by many as not being a serious gained a high profile on the national environmental problem. Russia has more political agenda. This contrasts with the country’s crucial role in the entry into immediate environmental problems on its force of the Kyoto Protocol; in the territory than those posed by climate absence of the US, the Russian change, and it is not uncommonly argued participation was necessary in bringing that climate change could even benefit the together countries accounting for 55% of country (Kotov 2004, pp.3, 6-7). This the emissions of the industrialised world. corresponds with the common Russian Russia took advantage of this powerful attitude that humankind is rather the negotiating position to secure a better deal ‘ruler’ than the ‘carer’ of nature (Helanterä under the Protocol (Korppoo 2002, & Tynkkynen 2002, p.134). Many leading p.388). The ratification discussion itself figures in the Russian scientific world was prolonged, and Russian policy-makers working on climate change are known as openly called for guaranteed benefits climate sceptics (Moe & Tangen 2000, pp. (Bureau of Economic Analysis 2002). In the end, the political benefit of European 13-14) as shown for instance by the recent Union support for Russian accession to views of Academician Yuri Izrael (until the World Trade Organisation, together recently co-chair of the Russian delegation with presenting Russia as the principal to the COPs) who is arguing that there is facilitator of the Protocol, were sufficient no serious threat to the climate (Izrael enough benefits to merit ratification 2007). They had a significant influence on (Korppoo et al 2006, p.20. the national debate during the ratification discussion (Karas 2004, p.5; Müller 2004a, This process characterises the Russian p.1). For many actors indifferent to or approach to international climate politics; sceptical of climate change, the climate direct benefits related to climate change regime is mainly regarded as a system for pacts play a key role encouraging Russia to wealth redistribution. 2 Development of Russian GHG emissions Mt 3500 3000 2500 2000 1500 1000 500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Figure 1 Development of Russian GHG emissions in 1990-2004. Source: National Inventory Report of Russia, p.9. Russia’s commitment under the Kyoto expected by Western governments and Protocol is to maintain emissions on the experts. Kyoto was regarded as a great 1990 level. But as the Russian economy opportunity for Russia by the latter while contracted and later restructured, many voices in Russia consider the emissions fell dramatically as shown in potential benefits related to the Kyoto Figure 1. Thus, Russia has surplus, or mechanisms as insignificant and the rules unused, emission allowances and could too bureaucratic. This attitude is receive revenues by selling them in the reinforced by rapid economic growth and international emissions trading market. Since purchase of these quotas will not high export incomes for the government mean permanent emission reductions as well as large energy companies in later anywhere they have often been termed years. Another factor explaining the ‘Hot air’. (See for instance Mastepanov et government’s ambiguous attitude to JI is al. 2001, p.128 or Moe et al 2001, pp. 5-6). that the benefits mainly would accrue in the private sector, and therefore, outside Due to the Soviet legacy of inefficient the control of the government3. energy production, transportation and consumption infrastructure, Russia has a 3 huge potential to host Joint In the past the Russian government, and especially president Putin, have demonstrated Implementation (JI) projects as well as that they want to control the private sector, even embarking on emissions trading. to the point of renationalisation in order to regain control. Against this background, the Russian However, the Kyoto mechanisms have government handing over AAUs - which are not gained as strong support in Russia as 3 The energy sector is very important to the sinks of all greenhouse gases not Russian economy. The cooperation of this controlled by the Montreal Protocol; sector is needed in order to implement the (d) It has in place a national registry; Kyoto mechanisms since a very large (e) It has submitted annually the most share of the JI project potential is owned recent required inventory, including the by actors producing and transporting national inventory report and the energy. common reporting format. (f) It submits the supplementary Russian compliance under Kyoto information on assigned amount Russian GHG emissions were some 33% (FCCC/CP/2001/13/Add.2). below the Kyoto commitment in 2004 and the quantitative compliance with the For a long time development of Russian Kyoto emissions limitation target during compliance institutions was extremely 2008-2012 is expected to be easily slow (see for instance Korppoo 2004). But achievable without further domestic in 2006 positive signs started to show. measures (Russian government 2006, • Responsibilities between p.74). But in addition, countries have to governmental agencies were divided. satisfy a set of institutional criteria to be • In 2007, Russia submitted its GHG eligible to participate in the Kyoto inventory for years 1990-2004 in the mechanisms. Common Reporting Format and the National Inventory Report. A Party included in Annex I with an • In its National Report on the Kyoto emission reduction or limitation commitments, Russia calculated its commitment during the first commitment Assigned Amount and described the period is eligible to transfer and/or process as required, including acquire Emission Reduction Units (ERUs) information on the selection of sinks if it is in compliance with the following to be included and the national GHG eligibility requirements: inventory and registry systems. (a) It is a Party to the Kyoto Protocol; • A GHG registry is expected to be (b) Its Assigned Amount has been launched during the first half of 2007. calculated and recorded; The administrator of the registry will (c) It has in place a national system for the be the Federal Center of estimation of anthropogenic emissions by Geoecological Systems, attached to sources and anthropogenic removals by the Ministry of Natural Resources (MPR). (Russian government 2007.) state property – in return to investments to the private sector seems politically problematic. 4 Based on this list it seems possible that establishment of bilateral arrangements Russia could achieve full compliance by with investor countries as Memoranda of the end of 2007 or early 2008, depending Understanding and reducing the risk for on the UN FCCC procedure and the the Russian Federation should private JI International Expert Review. This would projects fail. be a major development facilitating Russia as a supplier of ERUs and AAUs. The roles of ministries other than the MEDT may add to the bureaucracy of JI in Russia project approval as project developers will want to ensure support to their projects, Eligibility to host JI projects also requires and therefore, are likely to lobby the a designated focal point and publication relevant ministries directly. MEDT has of national guidelines for JI. Russia is yet been pushing for a one-stop-shop to submit these details to the JISC. A draft solution in order to avoid such a situation national procedure on JI approval exists which could even undermine the but it still needs to be accepted by the credibility of Russian JI projects should governmental administration and signed the competitive ministries choose projects by either the Prime Minister or a Deputy based on economic benefits received Prime Minister. rather than the established criteria. Also private Russian companies may be The relevant ministries have officially uncomfortable having to lobby agreed on a draft text after a prolonged government agencies. The more debate on their respective roles. It seems successful private companies have by now clear that the Ministry of Industry and got used to dealing directly with foreign Energy and the Ministry of Natural partners without much government Resources still want to secure a role for interference. themselves in project approval. In the current draft of the JI procedures these There are still uncertainties regarding ministries will be conducting a first transfer of ERUs by the Russian selection of projects while the Ministry of government, which is connected to the Economic Development and Trade property rights for emission allowances. If (MEDT) remains the leading agency and uncertainty remains it could seriously the focal point for project investors.