Post-Kyoto energy strategy of the Russian Federation, outlooks and prerequisites of the Kyoto mechanisms implementation in the country

Energy sector emissions from Russia have declined by about 33% from 1990 levels. We estimate that some 60-70% of the reduction is due to economic decline, and about 8-12% of it is due to reforms in the energy sector; the remainder being due to the wider use of natural gas and structural changes in the economy. Vigorous institutional and technological measures to promote energy efficiency could lead to savings of over 100 million t.c.e. per year by 2010, and keep CO2 emissions fairly close to current levels over the decade. In our view, international emissions trading should not lead to global emissions growth, but should facilitate the best energy saving and efficiency. Consequently, we propose that the available assigned amount should be divided into two components. That part arising from 'type 1' reductions, produced by special projects and measures relating to GHG reduction taken since 1990, should be freely traded; whereas the remaining 'type 2' surplus, without a clear link to real emission reduction activity, should only be traded if the revenues are recycled into special projects resulting in emissions reduction equal to or more than the amount of emissions sold.