COMMENT

Kyoto Protocol
down but not out

The recent confusing announcement by the Kremlin's chief economic adviser, Andrei Illarionov, that Russia will not ratify the Kyoto Protocol continues to spur some pessimists to declare that death of the pact has come at last. The Kyoto accord is not dead; rather, it is asleep, waiting to enter into force once 55 nations representing 55 percent of industrialized countries' carbon dioxide emissions in 1990 have ratified.

The debate within Russia's government about whether to ratify should be expected. Like the 100 or so countries that have already ratified, Russia should have its own national debate. In Japan there were differences between the various ministries and the private sector, which insisted that Japan already had a highly efficient industrial sector and therefore should not be regulated. In Canada, the oil-rich western provinces were so vehemently opposed to Kyoto that they even threatened to challenge its ratification under the Canadian Constitution. Thus, Russian ratification should not be expected to be seamless.

Russia's Kyoto plan has undergone a number of setbacks in recent years, leading to growing objections from critics within the government. When Russia decided on its stabilization target at 1990 levels, its economy was in decline. It expected to have plenty of room to grow without worrying about switching from fossil fuels to cleaner energy. Russia's low target also gave it a surplus of emissions permits, which it expected to sell on the emission trading market that the Kyoto accord was setting up.

But things didn't work out quite as expected. Emissions in Russia are on the rise. And because the United States decided not to ratify, the price of emission permits is likely to be much lower than Russia planned.

But ratifying Kyoto still makes good sense for Russia. Though its emissions are on the rise, Russia is still 25 to 30 percent below its 1990 level of greenhouse gas outputs. This means, even with current trends in growth, it would still have a surplus of 300 to 400 million tons of carbon to trade on a global emission trading market by the end of the first compliance period. These credits are estimated to be worth billions of dollars.

Russia will also be able to benefit from investment under Kyoto's joint implementation projects. The Dutch, Japanese, Canadians and the World Bank have all expressed interest in investing in energy-efficiency projects, but without ratification, there will be no reduction credits for these investors and therefore no incentive.

Russia has tremendous potential for renewable energies such as hydropower, which already accounts for 20 percent of its energy mix. There are also plenty of efficiency gains to be made in projects such as patching leaky oil pipelines, switching to natural gas and phasing out dirty coal firing plants. These will all allow Russia to meet its target without difficulty, and also have the added benefit of reducing air pollution and smog -- a problem for large Russian cities.

So instead of declaring Kyoto dead and playing into the hands of its critics, Russian President Vladimir Putin must focus on making the case for ratification. He has already said, on many occasions, that he supports the implementation of the Kyoto Protocol. But he will need time to pass it through the Duma.

The United Russia Party's recent victory in parliamentary elections will give Putin loyalists an outright majority in the Duma; this bodes well for a Putin-led ratification process. In March there will be a presidential election, which Putin is expected to win with ease. This will give Putin more time and leeway to push for ratification, but in the meantime, the rest of the world will have to wait.

There is another important reason why Russia should carefully reconsider ratification: The Kyoto accord is a very good agreement. Legally speaking, it is one of the most innovative environmental agreements today. Though no multilateral environmental agreement can be perfect, Kyoto has dug deeper into the unsustainable business-as-usual paradigm than any other multilateral environmental agreement to date.

Kyoto has used every lesson that treaty making has taught us in the last 30 years: creating market mechanisms such as emission trading, using an offshore scheme for technology transfer, establishing the first truly binding compliance system and incorporating a built-in framework to facilitate deeper commitments and successive rounds of negotiations to reach them. Politically speaking, it is the best possible outcome of the negotiations of 180 countries, all constrained by their own interests.

Since Russian ratification would bring the Kyoto accord into force, Russia is now in the position to take credit for the implementation of an agreement that was 10 years in the making, and by all assessments, one of the best in the multilateral system. So, though we can expect more debate in Russia and infighting among the ministries, it is premature to declare the Kyoto dead. Russia stands to gain too much, both monetarily and in its stature in the international system. It will take more than a disgruntled adviser speaking out of turn to make this critical decision for Russia and the world.

W. Bradnee Chambers is a senior program coordinator at UNU Institute of Advanced Studies. He followed the Kyoto Protocol negotiations as a U.N. observer for several years. This commentary first appeared in the December 25 edition of The Japan Times. These are his personal views.