Russia received this new natural resource from a provision in the Kyoto Protocol. Even though this protocol was drafted in 1997, when Russia's industry was in a crisis, 1990, the last year the Soviet Union's powerful industry functioned, was chosen as the upper limit for greenhouse gas emissions. However, this advantage is increasingly loosing its value to Russia and has the potential of becoming meaningless because of the depreciation of "hot air" quotas.
The Europeans have said that there is no significant demand for Russian quotas in Europe and offered 3-4 euros per metric tons of CO2. "Quotas cannot be sold at this price," said Sergei Kurayev, an employee of the Russian Regional Environmental Center and a drafter and an active supporter of the Kyoto Protocol. In his opinion, a reasonable price range for the quotas is $20-$ 30 per metric ton, because otherwise it would be better to save the surpluses for Russia's industry. Alexander Bedritsky, chief of the Federal Service for Hydrometeorology and Monitoring of the Environment, said, "we should not sell quotas, but care about our atmosphere."
Generally, the market for Kyoto Protocol quotas is not what the optimists expected. They hoped the profits from the sale of quotas could be used to modernize domestic production facilities, about 80% of which are obsolete. Now industrial facilities will most likely have to rely mainly on their own resources. Spending on new technologies and the introduction of new environmental standards will make production, and consequently, the prime cost of goods, more expensive.
There are risks that optimists consider to be more insidious than possible losses from quotas. "Our backward system of statistical reports is extremely dangerous," Mr. Kurayev said. "There are official figures, of course, but it is unlikely that they reflect the real state of affairs. For example, no one knows the exact figures of discharges into the atmosphere by the Soviet defense-oriented factories in 1990, the year chosen as the point of departure, because all data from the defense industrial complex were classified. Even today we do not know exactly what we burn or what is discharged into the atmosphere." Russia does not have a standard unified system of reporting for industrial facilities and it will be difficult to create one and introduce in practical usage.
Structural problems are another risk. Russia does not have a single environment management body. The functions of the State Environmental Committee, disbanded in 2000, were transferred to the Natural Resources Ministry, and today several agencies perform these functions. Several departments, including the Economic Development and Trade Ministry, will be responsible for implementing the Kyoto Protocol. According to the optimists, the dispersal of functions and the absence of a single center to be responsible for Kyoto problems may have a negative effect as well.
In 2004, the Kyoto Protocol was ratified. This major international document will come into force on February 16, 2005, and will require practical actions from its signatories. Russia, as the rest of the signatories, will become a participant in the international market. However, Russia's system for assigning and selling quotas has not been developed. This is another large obstacle to the effective implementation of the Kyoto Protocol.
