#13 - JRL 7019
Russia delays global warming pact, may wreck deal
January 15, 2003
By Clara Ferreira-Marques
MOSCOW (Reuters) - Russia, vital to the U.N. Kyoto accord on global warming after the United States pulled out in 2001, is not ready to ratify it for economic reasons and this could cripple the pact, experts said Wednesday.
The delay could cost Moscow billions of dollars, they added.
Russian Prime Minister Mikhail Kasyanov told the Earth Summit in Johannesburg last September that Russia would ratify the Kyoto Protocol on climate change, first agreed in 1997, "in the near future."
But Russia, which could boost revenues from a treaty clause allowing it to sell some of its pollution quota, has set no deadlines for government, and then parliament, to back the pact.
Under a complex weighting system, Russia's ratification is crucial for the protocol to come into force after the withdrawal of the United States, the world's top air polluter.
"The political question has been solved but we have not yet solved the economic question," Deputy Minister of Natural Resources Maxim Yakovenko told Reuters.
"The time frame now depends on how quickly the economic scenarios will be worked out. When we agree on the scenarios, then we will have worked out the social and economic consequences and we will head for ratification," said Yakovenko, also the head of Russia's State Ecology Service.
Experts and ecologists say that while pressing Russia could prove counter-productive, further delays could cripple a deal already scarred by political wrangling and the U.S. pullout.
"If Russia does not ratify in the first half of this year you will be seeing a great deal more scepticism. This is not good for confidence or for the development of the market (in emissions quotas)," said Frank Joshua at environmental brokerage Natsource Tullett in London.
"There are uncertainties, but they exist precisely because Russia has not ratified. We live in an uncertain world and governments operate in an uncertain world."
The delay also makes it more difficult for states in the protocol to take decisions and for all signatories to abide by its main aim -- to reduce emissions of global warming gases by 5.2 percent below 1990 levels by 2008-2012.
LAST STEP TO IMPLEMENTATION
Russia is the last remaining key player which has signed but not ratified the protocol, after Canada backed it last month.
While Canadian politicians faced opposition from regional and energy lobbies, no organized opposition exists in Russia. Most Russian producers expect foreign invesign partnerships, and not losses, as a result of the protocol.
"Nobody has come out against the protocol. This is just Russian bureaucracy and civil servant apathy," said Natalya Olefirenko, head of the climate project at Greenpeace in Moscow.
"We are not only losing the chance to lead the process, but the money we could have used...to modernize industry."
Pollution quotas for the protocol are based on 1990 levels, and because of the post-Soviet industrial downturn, Russia will not be able to use its full share in the medium term. It can sell its excess share under a mechanism fixed by the protocol.
According to Greenpeace, Russia could make $20 billion annually from quotas, about a quarter of 2003 budget revenues.
"To say that Russia is losing money, or that Russia is making money, that is all fantasy at the moment, because for now nothing exists," Yakovenko said. "Why should the protocol lose any of its force? This is all part of the normal process."
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