RATIFICATION DONE, WILL RUSSIA COPE WITH PROTOCOL'S ECONOMIC BURDEN?

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MOSCOW, October 22 (RIA Novosti' economic observer Nina Kulikova) - Today the State Duma ratified the Kyoto Protocol to the UN framework Convention on Climate Change. The protocol imposes constraints on emission to the atmosphere of so-called green house gases, which allegedly affect global climatic processes.

The constraints imply that over the period of 2008-2012, the world's green house gasses' emissions should be reduced by at least 5% as compared to the level of 1990. The main commitments in terms of the reduction were undertaken by industrial states. Russia undertook to maintain average annual emissions in 2008-2012 at the level of 1990. The principal lobbyists of the Kyoto Protocol ratification are the EU countries and Japan. The USA, China and India, three largest contaminators in the world besides Russia, refused to ratify the protocol.

The public discussions, which have been intensively going on of late, resulted in understanding the fact that the Kyoto Protocol has little to do with environmental protection, since its efficiency in settling the problem of green house emissions is very doubtful among scientists. This year the Russian Academy of Sciences organized a scientific seminar, which ruled that "the Kyoto Protocol has no scientific grounds". The Kyoto Protocol only establishes a new market of trading quotas for green house emissions, when the countries, which have undertaken commitments on limiting the emissions, will have the opportunity to purchase from each other unused emission quotas. Therefore, the consequences of the Kyoto Protocol ratification should be primarily assessed from the viewpoint of its economic feasibility.

For developed countries signing the protocol means a transfer of its companies to nature-friendly resources-saving technologies, which must have positive effect on the growth of their competitiveness. Besides, this demonstration of loyalty to environmental groups, which are getting more and more influence in the public life of the European Union, will not require any significant sacrifice, because factories have for a long time been in the stable process of transfer from the European zone to the third world countries.

For Russia, things are not so simple. The Russian industry needs restoration of the production capacities, which means, on the one hand, much greater increase in capital investments, than it would be the case for shifting to nature-friendly technologies and, on the other hand, natural growth in the GDP energy intensity. At the same time, industrially developed countries have been experiencing natural reduction in the GDP energy intensity over recent decades. Opponents of ratification have voiced opinions that the Kyoto Protocol ratification in Russia may entail the situation, when the economic policy's priority will be reduction of industrial emissions, but not industrial growth, which, under the lack of funds for upgrading production in most industries, is no positive trend.

On the other hand, the expert and political communities heard the voices of those, who supported the Kyoto Protocol ratification and stated that the protocol provided opportunities for obtaining additional investments from selling Russia's extra quotas, which could be directed towards development of energy-saving technologies. Currently, most of Russia's enterprises are noncompetitive. Besides, fossil fuels are not unlimited, while the price for exploring new fields is constantly growing. Relatively excessive amount of hydrocarbon fuels is no longer Russia's absolute advantage. From this viewpoint, the Kyoto Protocol ratification in a longer run can stimulate Russia's transfer to energy-saving technologies and promote growth of its enterprises' competitiveness.

Besides, Russia can become an key player on the nascent market of trading the quotas, the EU countries, Japan, Canada have already addressed Russia with preliminary requests. In the opinion of Russia's Industry and Energy Minister V. Khristenko, the Kyoto Protocol implies shaping of a new sector on the global market, and this market is interesting and promising. However, players of this market must thoroughly build their strategy, "since the concerns and the risks are not groundless".

The State Duma discussion did not last long and ended in a victory of the ratification lobbyists. Hopefully, the deputies have thoroughly thought over its terms to find them acceptable to Russia.

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