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The Kyoto mechanisms and Russian climate politics

The Kyoto mechanisms and Russian climate politics. Arild Moe Renewable energy in Russia: How can Nordic and Russian actors work together? NUPI, 6 May, 2008. Background. Climate change low on the political agenda Climate skepticism among scientists

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The Kyoto mechanisms and Russian climate politics

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  1. The Kyoto mechanisms and Russian climate politics Arild Moe Renewable energy in Russia: How can Nordic and Russian actors work together? NUPI, 6 May, 2008

  2. Background • Climate change low on the political agenda • Climate skepticism among scientists • Russia had key role in making Kyoto protocol enter into force • Negotiations on ratification emphasised side-benefits • The climate regime mainly about wealth redistribution? • No particular measures needed to meet Kyoto target

  3. Developments in Russian GHG emissions – real and forecast Source: MEDT

  4. After ratification • Long policy pause after Kyoto protocol ratification • Main legislation for JI passed in May 2007, finalised January 2008 • First projects submitted to MEDT March 2008

  5. Status for JI in Russia • Strong focus on controlling, rather than attracting projects • Russian commercial interest lower than before due to high energy earnings and more profitable investment alternatives • Institutional delays have led to a smaller amount of JI projects than expected • Barriers for project developers and JI investors: lack of institutional transparency, practical difficulties with loans and banking, corruption, lack of baseline data

  6. What is the driving force / primary concern? • Norway Kyoto mechanisms -> efficiency -> emission targets • Russia Kyoto mechanisms -> efficiency -> energy balance

  7. Energy consumption and economic growth: What is the political perception? 140% 140% 130% 130% 120% 120% 110% 110% 100% 100% 90% 90% 2007 1991 1992 2002 1990 1993 1994 1995 1996 1997 1998 1999 2000 2001 2003 2004 2005 2006 Source: Troika Dialog

  8. Opposing views on trends... • Economic growth cannot be decoupled from increased energy consumption • Resistance against binding emission targets • Long-term economic growth not possible without an energy efficient economy • Emission targets can be used to put pressure on modernisation processes • Climate has low priority or is used as an instrument

  9. ...But little disagreement about existing inefficiencies Excellent opportunities for JI and ET?

  10. What can JI deliver? Project portfolio by end January 2008. Source: Korppoo and Moe 2008.

  11. Project applications, submitted to MEDT byApril 17, 2008 Source: MEDT

  12. JI projects only to a limited extent addressing energy efficiency Specific barriers to energy efficiency JI projects: • Additionality: Projects that are economical by themselves should in principle take place in any case and are therefore non-additional • Energy inefficiency often due to dysfunctional institutions • Low (subsidised) energy prices • Unclear ownership rights • Administrative structures with no incentive to economise • JI projects in energy efficiency could give incentives to sustain irrational practices

  13. Can emissions trading (ET) work in Russia? • In theory a more flexible system, giving incentives to become more energy efficient • But emissions trading in Russia is contested • No allocation scheme (who owns the hot air?) • No trading mechanism • No endorsement from the top • ET best suited for a developed market economies, but a limited system in Russia is thinkable

  14. Looking ahead • Concern for the energy balance rapidly growing • Traditional response – increase energy production – is problematic • Will an expected more vigorous energy efficiency policy more actively employ the Kyoto mechanisms as a tool? • First indications in early June?

  15. Thank you for your attention! arild.moe@fni.no

  16. Recent papers Anna Korppoo and Arild Moe: • Russian Gas Pipeline Projects under Track 2: Case Study of the Dominant Project Type. • Russian JI Procedures: More Problems than Solutions? • Russian Climate Politics: Light at the End of the Tunnel? All published by Climate Strategies, London. Download from www.fni.no or http://www.climate-strategies.org/

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