Comments of Vsevolod Gavrilov, the deputy head of the Economic Development and Trade Ministry department overseeing resource price regulation to The Moscow News, «Carbon Credits Get Cool Reception», 25 March 2008
…."We want to establish efficient tools to support environmental responsibility projects," said Vsevolod Gavrilov, the government's point man on the Kyoto Protocol and deputy head of the Economic Development and Trade Ministry department overseeing resource price regulation.
"We received messages and signals from the business community that we should focus mostly on facilitating the carbon market, but the carbon market is not the aim," he said in an interview in his office at the ministry, which overlooks the thronging traffic on Tverskaya.
"The carbon market is an instrument that is used for achieving environmental goals and targets," he said.
Russia's main goal, like other Kyoto signatories, is to reduce emissions to 1990 levels. As Gavrilov noted, "Russia has completely fulfilled this obligation."
Yet this is the result of post-Soviet industrial collapse, rather than any attempt to improve the environmental situation in the country. And the revival of heavy industry on the back of an oil-fueled economic boom means that greenhouse gas emissions are only set to grow.
Carbon credits, in essence, put a monetary value on emissions. Since environmental damage is a global problem, it makes no difference where reductions are made. A European or Japanese firm obliged to cut emissions, therefore, can instead invest in environmentally friendly technology in a Russian firm, thus buying credits to fulfill their own reductions targets.
"Carbon credits are one means of providing a cash flow versus others, like oil, gas or electricity," Ramming said.
On March 10 the newly formed government commission overseeing carbon-credit trading began receiving applications for joint implementation projects, which range from investing in environmentally friendly technology to investment programs that improve efficiency.
The nine-member commission comes under the auspices of the Economic Development and Trade Ministry and includes representatives from ministries as varied as the Foreign Ministry and the Regional Development Ministry.
Foreign investors said they were not concerned that the deals could fall victim to the state's increasing push for control over certain economic sectors, even though most projects will target strategic industries like energy.
"You could point to another case where the Russians have tried to renegotiate very large and important strategic projects -- the oil and gas sector jumps to mind right away," said Kevin James, a vice president at London-based Climate Change Capital. "But I do not see the government approving a [joint implementation] project, negotiating terms with a Western European government and then a year later deciding that they do not want to do it, unless there is a very significant reason," he said.
Eaton, of C6, noted that under joint implementation projects, "by definition, you have to have a foreign investor involved in the project."
Yet some are playing it safe. Dresdner Kleinwort, for example, has formed Carbon Trade Finance, a 50-50 joint venture with Gazprombank, to carry out its carbon trading.
"We believe in local knowledge, especially in the carbon market," Ramming said. "It's important to know the local flavor, the local elite."
Gavrilov said the commission would decide within 2 1/2 months of receiving an application whether to approve or reject projects. …
"We received messages and signals from the business community that we should focus mostly on facilitating the carbon market, but the carbon market is not the aim," he said in an interview in his office at the ministry, which overlooks the thronging traffic on Tverskaya.
"The carbon market is an instrument that is used for achieving environmental goals and targets," he said.
Russia's main goal, like other Kyoto signatories, is to reduce emissions to 1990 levels. As Gavrilov noted, "Russia has completely fulfilled this obligation."
Yet this is the result of post-Soviet industrial collapse, rather than any attempt to improve the environmental situation in the country. And the revival of heavy industry on the back of an oil-fueled economic boom means that greenhouse gas emissions are only set to grow.
Carbon credits, in essence, put a monetary value on emissions. Since environmental damage is a global problem, it makes no difference where reductions are made. A European or Japanese firm obliged to cut emissions, therefore, can instead invest in environmentally friendly technology in a Russian firm, thus buying credits to fulfill their own reductions targets.
"Carbon credits are one means of providing a cash flow versus others, like oil, gas or electricity," Ramming said.
On March 10 the newly formed government commission overseeing carbon-credit trading began receiving applications for joint implementation projects, which range from investing in environmentally friendly technology to investment programs that improve efficiency.
The nine-member commission comes under the auspices of the Economic Development and Trade Ministry and includes representatives from ministries as varied as the Foreign Ministry and the Regional Development Ministry.
Foreign investors said they were not concerned that the deals could fall victim to the state's increasing push for control over certain economic sectors, even though most projects will target strategic industries like energy.
"You could point to another case where the Russians have tried to renegotiate very large and important strategic projects -- the oil and gas sector jumps to mind right away," said Kevin James, a vice president at London-based Climate Change Capital. "But I do not see the government approving a [joint implementation] project, negotiating terms with a Western European government and then a year later deciding that they do not want to do it, unless there is a very significant reason," he said.
Eaton, of C6, noted that under joint implementation projects, "by definition, you have to have a foreign investor involved in the project."
Yet some are playing it safe. Dresdner Kleinwort, for example, has formed Carbon Trade Finance, a 50-50 joint venture with Gazprombank, to carry out its carbon trading.
"We believe in local knowledge, especially in the carbon market," Ramming said. "It's important to know the local flavor, the local elite."
Gavrilov said the commission would decide within 2 1/2 months of receiving an application whether to approve or reject projects. …
