Russia Holds Key to Kyoto Ratification—But Will it Unlock the Door?

Publish date: October 7, 2003

Written by: Soizick Martin

BRUSSELS, MOSCOW, OSLO—Russia’s ambivalence toward the Kyoto Protocol was underscored at Friday’s conclusion to the UN World Climate Change Conference held in Moscow when a tense exchange erupted between top scientists and the Kremlin’s Andrei Illarionov over the foundations of climate change science and the consequences for Russia of not ratifying the protocol.

Russia is now the last obstacle as to whether the 1997 protocol—that many see as a step toward curbing gases from fossil fuels blamed for rising temperatures and the “greenhouse effect,” which may already be triggering more extreme and erratic weather patterns—will be ratified.

Russian President Vladimir Putin, on Monday, visibly avoided offering any commitments on ratifying the Kyoto Protocol, reported Brussels’ ENDS environmental daily. The Friday standoff occurred when Putin’s climate change and economic advisor, Illarionov, made a presentation entitled “The Kyoto Protocol Is Discriminatory Against Russia,” in which he said it would be “no easy task to convince the Russian administration of Kyoto’s benefits.”

“Russia is not the biggest emitter of greenhouse gases, but it is supposed to have limits on emissions, while the US and China will not. Why?” Illarionov said, according to ENDS.

According to the terms of the protocol, countries achieving less greenhouse gases production levels than they had in 1990—which Russia is currently doing—can sell their “emissions credits” to overproducing countries, a clause that could provide Russia with an instant international commodity. Overproducing countries that buy these credits are then given extra time to reduce their production levels to the 1990 standards, thus fulfilling their commitment to the protocol.

But Illarionov was sceptical of arguments that Russia would economically benefit from its ability to sell emissions credits to other countries. Strong projected economic growth for Russia in the industrial sector, ENDS quoted Illarionov as saying, and the likelihood of stronger Kyoto emissions curbs later, would turn Russia into a buyer rather than a seller of emissions credits.

Russia’s Stance Frustrated Many
The Russians’ ambiguous stance on ratification came as a disappointment—and possibly a fatal blow—to the aims of the Kyoto Protocol’s backers.

After the United States made it clear that it would not ratify the protocol in 2002, Russia became the make-or-break nation for Kyoto. As he did again on Monday, Putin last week said Moscow needs more time to study the ratification issue.

“The government is thoroughly considering and studying this issue studying the entire complex of difficult and unclear problems linked with it,” Putin said on September 29th at the opening ceremony of the conference.

Executive Secretary for the United Nations Framework Convention on Climate Change, or UNFCCC, Joke Waller-Hunter, was surprised and frustrated by Putin’s non-committal stance.

“I must admit that I had hoped that Putin would have been more specific about indicating an approximate date for Russian ratification of the Kyoto Protocol,” said Waller-Hunter, as quoted by the English-language daily, The Moscow Times. “I trust that under Putin’s leadership, the Russian Federation will recognise its responsibility for multilateral action on a truly global issue.”

Others, however, were not surprised that Russia did not commit itself to a ratification date.

"We did not expect Putin to announce ratification," Canadian Environment Minister David Anderson said, according to the paper. "The Russian government had made it abundantly clear that this was a science conference on climate change, not a political conference on Kyoto.”

The Kyoto Protocol and Russia’s Position on it
The Kyoto Protocol, adopted at a December 1997 conference in Kyoto, Japan, obliges all signatory countries to reduce their greenhouse gas emissions—above all, carbon dioxide—by a yearly average of 5.2 percent in order to reach a goal by 2012 where participating countries are producing fewer greenhouse gases than they were in 1990. Only developed countries would be covered by the protocol.

The UNFCCC divides developing from developed countries in the protocol because developed nations are responsible for the lion’s share of greenhouse gas emissions that lead to the global warming and risk the Earth’s environmental balance. They also have the institutional and financial capacities for reducing them. Global warming is a scientifically recognised process of the Earth’s ozone and atmospheric decay that was first put on the political agenda by the UN with the adoption of the UNFCCC in 1992. It came into force in 1994.

Proposed emissions reductions depend on the countries responsible for them. For example, the European Union, or EU, has committed itself to reduce its emissions by 8 percent, distributing the reductions among its member states. Similarly, Japan committed itself to a 6 percent reduction. One the other hand, the United States, which pulled out of the protocol, is by itself responsible for 34 percent of the world’s greenhouse emissions.

To become internationally legal, the Kyoto Protocol must be ratified by a minimum of 55 countries accounting for at least 55 percent of the world’s greenhouse gas emissions. Russia, which is responsible for 17 percent of them, is therefore a lynchpin in securing the protocol now that the United States and China will not ratify it.

Russian Prime Minister Mikhail Kasyanov did announce at the 2002 Earth Summit in Johannesburg, South Africa, that Russia hoped to ratify the Kyoto Protocol “in the very near future.” Since then, however, the issue has dragged with the Russian government, and Moscow’s position on the protocol has become murkier.

Benefits for Moscow Under the Kyoto Protocol
What is clear, though, is that Russia will make its decision based on Moscow’s economic and foreign policy goals, and how they correspond to the “emissions trading” regime allowed for in the protocol.

The main attraction for Russia is the potential to sell emissions credits. As Putin said at the opening of the conference, Russian carbon dioxide emissions are 32 percent below 1990 levels because of lost industry due to post-Soviet economic collapse.

By creating a new market niche for emissions trading—a prospect that Bellona opposes—Russia would be able to gain from the surplus of emission rights that Moscow is likely to have if the Kyoto Protocol takes force. Given that Russia’s emissions under the Kyoto Protocol’s first reduction commitment period—2008 to 2012—will probably remain lower than its 1990 levels, Moscow will have emissions credits to sell.

Besides selling its own reduction credits, Russia, as a signatory country, would also be able to acquire “emission reduction units” by financing projects reducing greenhouse gas emissions in other developed countries through a Kyoto Protocol mechanism known as “joint implementation.” Russian companies would have access to these joint implementation projects with other countries, paving the way for Russia to acquire newer anti-pollution technologies and systems of management.

EU Pressure on Russia to Ratify Has Been Steady
European Union officials have used practically any international gathering involving the Russians to pressure Moscow on ratifying the protocol.

Speaking at a May conference organised by the Brussels-based Centre for European Studies and Conferences, entitled “Implementing the Kyoto Protocol: Where Do We Stand,” Margot Wallström, the EU’s Environmental Commissioner, said: “Of course we are all keen to see Russia finally ratify the Kyoto Protocol. Russia knows that it holds the key to bringing the Kyoto Protocol into force, and they are aware that the eyes of the world are on them.”

Wallström said that she went to Moscow in early March, together with the environmental ministers of Greece and Italy “to remind Russia of its commitment to ratification that Prime Minister Kasyanov made at the Johannesburg World Summit.”

“President Putin was also personally reminded by European Commission President Romano Prodi and several EU leaders of this commitment,” she added.

The latest initiative on the issue of Russia’s ratification of the Kyoto Protocol came from the European Parliament, or EP, when a delegation from the Parliament’s Committee on the Environment, Public Health and Consumer Policy made a three-day visit to Moscow from September 17th to 19th.

The delegation was co-chaired by Alex De Roo, vice-chairman of the committee, known as ENVI, and Jorge Moreira da Silva, ENVI’s rapporteur for the Kyoto Protocol’s ratification and carbon dioxide emissions trading.

The delegation met with Russian State Duma Deputies Vladimir Lukin, who is a vice chairman of the Duma, Vladimir Grachev, chairman of the Duma’s Ecology Committee, and Deputy Artur Chilingarov, also a Duma vice chairman. It also met with key staff members of Russia’s Ministry of Energy, as well as a number of NGOs.

Lukin, who is also a co-chairman of the EU-Russia Parliamentary Cooperation Committee, had a separate meeting with Bart Staes, his counterpart from the Brussels side, and the EP’s Moreira da Silva. The details of their meeting are not known.

Reporting on the delegation’s trip to Moscow at the sixth gathering of the EU-Russia Parliamentary Cooperation Committee in Strasbourg on September 24th and 25th, Moreira Da Silva, a conservative member of the European Parliament, or MEP, from Portugal, expressed frustration at Russia’s lack of commitment to the protocol.

“It is clear that ratification is not considered a priority issue today and this is worrying,” he said from the podium to his European and Russian colleagues. “It is a question of credibility with regard to the Russian commitment to the European Community.”

Moreira Da Silva also reported that the Russia government fears that its stance on ratifying the Kyoto Protocol will affect whether or not Russia is accepted into the World Trade Organisation, or WTO. Negotiations about Russia’s entrance into the WTO are currently taking place, and Moreira Da Silva said that Russian representatives with whom his delegation spoke hinted broadly that approving Russia’s membership in the WTO might provide Moscow with an incentive to sign the Kyoto Protocol.

“As a compensation, WTO approval was an idea that was quite present in many of the discussions we had,” Moreira Da Silva said.

Mikhail Fradkov, Russia’s Ambassador to the EU, who was also present at the Strasbourg meeting, said that the ratification question “should not be over-politicised.”

“Indeed, the whole issue is a complex one, and Russia needs to evaluate its own interests before reaching a final decision,” he said.

Why is Russia Still Hesitating?
Throughout the Moscow World Climate Change Conference, Illarionov said that both he and Putin had doubts that the Kyoto Protocol was sufficiently founded on scientific evidence and that they feared signing the protocol would put constraints on Russia’s economic and industrial growth, The Moscow Times reported.

Illarionov said the United States and Australia opted out of the protocol after claiming that compliance would be too costly. Illarionov said compliance with Kyoto would be even less affordable for Russia, whose economy is only a fraction of the US or Australian economies.

Moscow has also apparently calculated that, with the US out of the Kyoto Protocol, there would be few buyers for Russian carbon dioxide emission credits. Additionally, even though Russia’s emissions are lower than the 1990 goal, they are, with economic and industrial growth, again beginning to rise, which would leave Russia with an even smaller margin to trade in Kyoto emissions credits.

Russia, as the world’s second largest oil exporter, also fears that fossil fuel prices would fall if the protocol were implemented, thus forcing Western countries to implement renewable sources of energy.

Moscow therefore is demanding more guarantees for Western investments to improve the efficiency of the Russian energy sector. This is quite different from the EU position, as Moreira Da Silva said in Strasbourg late last month. During ENVI delegation discussions in Moscow, Russian representatives complained that many European investors had promised investments in climate-friendly projects, but that the money had not materialised.

The EP delegation, while still in Moscow, stressed in reply that the current limbo in which Russia has put its ratification of the Kyoto Protocol has driven investors to other Eastern European countries and South America.

“There has been a long process of negotiation over Kyoto already,” said Moreira Da Silva at the Strasbourg meeting on the delegation’s findings. “What could be given up [in the interest of compromise] has already been given up. Today, Russia must respect its engagements.”

Moscow and Washington Getting Cosy Over Oil?
The US administration has repeatedly denied it has ever attempted to lobby Moscow to take a particular stand on the Kyoto Protocol, but some experts believe that the United States might be pressuring Russia to delay its decision. Interestingly, the delegation’s trip to Moscow was preceded by a visit to the Kremlin from former US Secretary of State Henry Kissinger and former US President George Bush, Sr. for discussions about the Kyoto Protocol and other energy issues. The details of these discussions are not known.

“The rhetoric from Washington is constantly that this is a convention and a protocol that is fundamentally flawed,” said Eric Sievers, an American attorney and part of Baker and McKenzie’s Global Change Practice Group, according to The Moscow Times. “If the Kyoto Protocol comes into force, that argument loses a lot of strength. It would be a foreign policy disaster [for the Bush administration] if it did.”

After the first US-Russia energy summit in October 2002—which took place in US President George Bush’s home state of Texas—a second discussion between the two countries on the oil question was organised on September 22nd and 23rd in St. Petersburg, Russia, Vladimir Putin’s hometown.

This new energy summit confirmed the close relations between the US and Russia on oil cooperation that Putin and Bush declared in May 2002, when Bush came to Russia for his first meeting with Putin. Among the future goals of this cooperation is the diversification of Washington’s sources of energy suppliers. Moscow, for its part, uses every available occasion to push plans for an oil terminal in Russia’s far northwestern Murmansk region, which would open the sluices for Siberian oil to flow into American market.

The joint statement signed at the St. Petersburg summit on September 23rd by US Trade Secretary Donald Evans and German Gref, Russia’s minister for economic development, calls for the strengthening of the energy cooperation between the two governments and encourages the expansion of Russian export capacities. Today, only 4 percent of American oil imports are from Russian origin.

“Departing from Murmansk, a tanker can reach the American East Coast in nine days, compared to thirty-two days from Saudi Arabia,” said Mikhail Khodorkovsky, head of the Russian oil giant, Yukos.

Some on the US side remain concerned nonetheless about oil relationships with Russia, especially following Russian authorities’ investigations last summer into Khodorkovsky and some of his Yukos associates’ alleged privatisation fraud in the mid-1990s. US industry representatives are also concerned about the lack of consensus within the Putin administration about which of its energy priorities it wants to put into action.

Sarah Blau, an advisor to the EP’s Green Faction, contributed to this report from Moscow. Soizick Martin reported from Brussels and Charles Digges reported from Oslo.