EXCLUSIVE-Russian wins new greenhouse gas emissions rights

OSLO/LONDON Thu May 29, 2008 4:28pm IST

OSLO/LONDON May 29 (Reuters) - Russia has won rights to emit or sell licences for extra greenhouse gases equivalent to France's total annual output, after revisions to Soviet-era data underpinning a U.N. climate pact, official documents show.

A 2007 review raised Russia's emissions ceiling under the United Nations' Kyoto Protocol for combating climate change by 107 million tonnes a year to 3.32 billion tonnes -- or 535 million tonnes extra under the pact's five years from 2008-12.

Russia is the world's number three emitter of greenhouse gases, mainly from burning fossil fuels, behind the United States and China so revisions to its data can have a big impact.

Russia can either emit more or to sell its emissions rights on international markets. By contrast, France's total emissions in 2006 were 541 million tonnes and Britain's 656 million.

The new benchmark, built into Russian emissions data submitted to the U.N. Climate Change Secretariat this month, reflects an upwards revision of emissions in 1990, just before the collapse of the Soviet Union and its smokestack industries.

"The review process was properly managed in terms of the process and the changes in numbers were done under close scrutiny by the expert review team," said John Hay, spokesman of the U.N. Climate Change Secretariat, asked by Reuters about the shift in the Russian baseline.

Russia's target under Kyoto is to stay below 1990 levels during 2008-12 so a higher base year gives it more leeway to emit or sell any shortfalls. Russia's emissions were 34 percent below 1990 levels in 2006 at 2.19 billion tonnes after a plunge in the early 1990s.

The review adds to past revisions of a Russian benchmark long estimated at 2.99 billion tonnes -- giving a total 333 million tonnes a year gain. The 2.99 billion figure was still listed as the 1990 baseline in a U.N. table in November 2007.

Several leading environmentalists and other experts contacted said they were unaware of the upwards revisions.

MARKETS

Under Kyoto, industrialised nations have binding caps on greenhouse gas emissions and if they undercut these -- as Russia is -- they can sell those surplus emissions rights called assigned amount units (AAUs) to countries that over-shoot.

Environmental groups have dubbed that "hot air" which undermines Kyoto's main aim of cutting greenhouse gas emissions. Russia has AAUs to sell mainly because of the collapse of inefficient Soviet industries, not because Moscow has made extra efforts.

Interested buyers are emerging, notably Japan, the Netherlands, Spain and Ireland, all above their Kyoto targets. That could cut demand for trade in carbon offsets called CERs (Certified Emissions Reductions), which are directly linked to cuts in greenhouse gases.

Growing interest in AAU trading "suggests potential downward pressure on CERs because that would take out a big chunk of CER purchases", said Abyd Karmali, Global Head of Carbon Emissions at Merrill Lynch.

Russia is the biggest emitter bound by Kyoto, meant as a first step to rein in what the U.N. Climate Panel projects will be more floods, droughts, heatwaves and rising seas.

The Russian review said that Soviet-era data had under-estimated emissions from energy industries, manufacturing, construction and transport. It was reviewed by experts from Brazil, Germany, Moldova, Australia, Hungary and Kazakhstan.

More than 190 governments have agreed to negotiate a new treaty to combat climate change by the end of 2009 to succeed Kyoto. Kyoto obliges 37 industrialised nations to cut emissions by an average of 5 percent below 1990 levels by 2008-12.

-- For Reuters latest environment blogs click on: blogs.reuters.com/environment/ (Editing by Matthew Jones)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage