Russia Delays Global Warming Pact, May Wreck Deal

MOSCOW - 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.

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 skepticism. 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.

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 investment and foreign 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."

Here's the comment I made on my blog:

Russia is putting the heat on Europe over Kyoto.

This is hilarious. According a Reuters news article, Russia Delays Global Warming Pact, May Wreck Deal. Russia's inaction seems to really puzzle Clara Ferreira-Marques, the Reuters reporter, since "The delay could cost Moscow billions of dollars." And why exactly is that?

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.

Here's the joke: The whole point for Russia of signing the Kyoto Treaty was so that it could rake in a windfall fortune by selling carbon dioxide emission credits. But obviously the only source of funds of that magnitude would have been from the United States. Since the U.S. refuses to sign Kyoto, the $20 billion per year in wealth transfer to Russia goes out the window, and Russia is left with nothing.

So why doesn't Russia sign it anyway? After all, even if that windfall fails to materialize, at least Russia won't be hurt economically by having to restrict its industries like many other countries.

The answer is that Russia wants to squeeze that money from other sources, i.e., European nations. Obviously Europe is a poorer target than the wealthy United States. The European Union and its member nations have much bigger economic and budgetary problems than the U.S. does. But the EU still has some financial resources, and there are other geopolitical concessions that Russia may be to wring from them.

The dogma of Global Warming has become an obsession and a holy cause to Europeans. Their leaders and elites have so much political capital invested in Kyoto that it would be a catastrophe for them to let the Treaty go down the drain. After all, how will the European chattering classes damn and demonize Bush if it turns out that Russia is the country that actually pulls the plug? That threat gives Russia a lot of leverage.

Even aside from the questionable science behind global warming fears, Europe knows that the Kyoto Treaty is mostly a political and symbolic gesture which would have little real impact on atmospheric carbon dioxide levels. That's pretty obvious just from the fact that Russia could sell $20 billion per year in emission credits without effecting a single molecule of CO2. The real motivation behind Kyoto was envy, fear, and an inability to compete with the dynamic U.S. economy. Europe wanted to level the playing field with its own socialistic and moribund economy, by forcing the U.S. to artificially restrict its growth. Sure Kyoto would also damage Europe economically, but it would cripple the U.S. even worse. And in the current anti-American climate, that's far more important to Europe.

But Bush refused to play that game. He cavalierly unsigned the Kyto Treaty. He wouldn't even give it lip service, the way Clinton did. The European chattering classes are consequently in a huge huff, and they keep trying to beat America over the head for this "unilateral" and politically incorrect act. If they have to pay off Russia in order to keep Kyoto intact, they'll find a way to do so.

The final irony is that the U.S. economy remains unaffected by Kyoto, while Europe will have to implement its restrictions. In addition, Europe will have to ante up a substantial bribe to Russia.

So instead of leveling the playing field, the Kyoto Treaty is tilting the field further in our favor.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.