#15 - JRL 7251
Wall Street Journal
July 16, 2003
Russia Moves Slowly Over Kyoto Protocol
By JEANNE WHALEN and JOHN FIALKA
Staff Reporters of THE WALL STREET JOURNAL

MOSCOW -- With the U.S. having abandoned the Kyoto Protocol, the global-warming treaty's fate now hinges on Russia , which is dragging its feet in what some see as an attempt to extract greater economic rewards before ratifying.

Never known for its commitment to the environment, Russia now finds itself at the center of the climate-change debate. The Kyoto treaty, which would limit emission of greenhouse gases that may cause global warming, becomes law only when ratified by nations producing 55% of 1990 emissions levels. Russia is the only holdout that could bring it into force.

Prime Minister Mikhail Kasyanov promised last year that Russia would ratify the protocol. But Moscow now says it is disappointed by the paltry sum it would earn by selling its spare emission quotas to Europe and Japan, the treaty's main backers. Some of Russia's top climate scientists, meanwhile, are openly questioning whether the treaty will stop global warming.

"Russia is not against the Kyoto Protocol ... [but] as of today there are no particular economic incentives for Russia to ratify it," Mukhamed Tsikanov, deputy minister of economics, said in an interview. "We hope our partners will move from political talk to economic action."

Russia's position reflects the more assertive, economics-focused foreign policy Vladimir Putin has been shaping since taking office. But Moscow's stalling has irritated European Union officials, who say future political and economic integration with Europe will depend on Russia embracing stronger environmental protections.

If the Kyoto Protocol is ratified by Russia and nearly every other industrial nation, it could put pressure on future U.S. administrations to relent and join. The Bush team bowed out in 2001, saying emissions cuts would harm the U.S. economy.

The economic stakes are big for Russia , too, thanks to a quirk in timing. The Kyoto Protocol would require signatories to reduce production of carbon dioxide and methane to 1990 levels -- the last year Soviet factories chugged along at full speed before communism collapsed. Since then Russia's industrial output and its production of greenhouse gases have dropped by about a third, leaving Moscow with spare emissions quotas to sell to countries wishing to exceed their limits.

At one time Moscow expected to make billions of dollars selling these credits to the U.S. But with the U.S. on the sidelines, Russia stands to earn much less. Mr. Tsikanov insists Russia isn't simply being greedy; he says it wants to invest the money in new energy-efficient transportation systems and power stations. Russia has asked Japan, Canada and the EU for assurances that they will buy its quotas before those of other developing states, but has been told that such deals can be negotiated only after Russia ratifies the treaty, the deputy minister said.

The debate underscores the difficulties Russia and Europe face as they attempt to find common ground for closer integration. "There is no way the EU can agree to a common economic space with a country like Russia if there are no shared environmental standards," says an EU official. He adds that he feels Europe answered all of Russia's economic concerns at a climate-change conference in Morocco last fall.

Several European delegations have visited Moscow in recent months hoping to spur the Russians to action, but Prime Minister Kasyanov has yet to schedule an official government discussion of the protocol's merits. Government approval is needed before the treaty can be submitted to the legislature for ratification.

"There is a clear sense that the Russians are keenly aware of their key position at the moment and wish to use it to leverage to the maximum," says the EU official. "What they are after is money."

Natalia Olefirenko, an activist in Greenpeace's Moscow office, says she has heard reports that American officials are pressing Russia to ditch the treaty so that Washington won't be isolated in its opposition. Mr. Tsikanov denies this, but says Russia itself has raised the possibility of working out a more attractive bilateral agreement with the U.S. So far, though, the Americans don't seem interested, he says.

A U.S. State Department official says Washington hasn't lobbied Russia about Kyoto. "We think nations should independently evaluate whether ratification of the Kyoto Protocol is in their national interest," the official says, adding that the U.S. is working bilaterally with Russia and other industrial nations on developing various technologies to reduce global warming.

Several Russian scientists have publicly criticized the treaty, saying it will do little to stop global warming. While they don't appear to have great influence on the government's position, they could drag out debate, says Ms. Olefirenko of Greenpeace.

Sergei Kurayev, an ecologist at the Russian Regional Environmental Center, says he expects Russia to ratify the treaty if only because the protocol falls under the auspices of the United Nations, whose authority Moscow has sought to bolster, to offset what it sees as U.S. unilateralism.