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Conceptual approaches to Kyoto protocol market mechanisms
implementation
Structure of greenhouse emissions in Russia by
sectors of economic
Energy-saving
Mt.e.f /year
Emission
decrease Mt CO2
eqv
Fuel and energy complex
33-37
75-80
Housing complex
22-25
40-45
3,0
Power consuming industries (such
as metallurgy, building material
industry, pulp and paper industry)
33-40
70-75
2,5
Total
88-102
185-200
2,0
10
Natural gas production and procesing
3
Oil and coal production and processing
19
Transport
chemical industry
1
2
metallurgy
25
Housing and communal services
11
Others
0
5
10
15
20
25
30
Source: National Carbon Union
Base line the level of 1990
Billion t CO2
29
RAO UES
GHG emission in Russia and potential projects
Program “Energy-saving in Russia.
1999 - 2005”
Actual (predictable) level
of GHG emissions
GHG emissions in Russia is
first budget period and
probably in second budget
period
GHG emission on condition
that JI will be realize
Free float of unused
quota of GHG emissions
Decrease of reserve
unused quota in result of
projects
Product 1 – “Policy”
Product 2 – “Business”
First
budget
period
Source: Third National Communication to United Nations Framework
Convention on Climate Change
Second
budget
period
?
%
Organizational-functional scheme of Kyoto
Protocol mechanisms implementation in Russia
UN Framework Convention
on Climate Change
National registry
Project
identifier
State policy
Authorization
Control
Emissions monitoring
rules
JI projects
register
Info of
projects
Accredited verifications of technical
design and reporting documentation
Info of CO2
emissions
reduction
Projects
Energy saving measures
Allocation
Enterprises
Consultants on projects
preparation and monitoring
Emissions rights
allocation rules
Transactions
register rules
Baseline, monitoring
and verification rules
Consultants on CO2 emissions
inventory and monitoring
Programme of socio-economic
development
Legislative framework
Info of CO2
emissions
level
Verification
GOVERNMENT
Info of GHG emissions, projects,
transactions
Info of allowed
volumes of CO2
emissions
Mechanism of emission reduction projects
implementation in Russia
Report on commitments fulfillment,
projects and transactions
implementation
Authorized undergovenmental organization
Emissions
monitoring
system
Kyoto protocol (carbon market)- invigorative
mechanism of energy-saving in Russia
Pre-audit
Green
projects
Energy efficiency
Kyoto protocol
(carbon market) –
International mechanism
of energy-saving
stimulation
Decrease of
energy
intensity of GDP
to 36% to 2010
Finance
Regulatory
framework, staff
– Information
– Value
Emissions trading
Introduction of GHG emissions
accounting system
GHG emissions inventory and monitoring
systems are the basis for national carbon
market infrastructure
Options of
compulsory
motivational
Government
actions
economical
Regulatory act (Governmental
decree or federal law) states
a number of future opportunities for
those who maintains emissions
accounting system at own expenses
(inventory, monitoring, forecasts)
?
Regulatory act enforces region
and state-owned enterprises
to maintain emissions accounting
system in accordance with
approved methodologies,
and to report emissions data
The use of Kyoto Protocol mechanisms
for economical efficiency increasing of
Energy projects in Russia
Without use of
"carbon" credits
With use of
"carbon" credits
Project
#1*
Project
#2**
Project
#1
Project
#2
Net Present Value
(NPV), mil.Є
12,38
17,1
16,97
20,35
Internal Rate of Return
(IRR),%
125,94
4,48
188,74
6,44
Profitability Index (PI)
11,9
1,39
15,95
1,65
Payback Period (PP),
years
3,17
7
2,35
6
Discounted Payback
Period, years
3,24
11
2,41
8
Index
uneconomical
Regulatory act creates
opportunities for Governors to
establish emissions Accounting
Funds (those funds financing
is to be secured from regional
budgets)
Government gives instructions
and allocate targeted
financing to Special GHG
Emissions
Accounting Fund
* Project#1 – Habarovskenergo
** Project#2 - Novgorodenergo
Emission
Rights
Emission
Reduction
Units
Emission
reduction
projects
Carbon Market
 Means of attraction in modernization
projects technical and technological
innovation
 Entry of Russian companies on world
carbon markets (including Clean
Development Mechanism)
 Increase of environmental rating of company
 Advance of science intensive technologies
to new markets
 Increase of enterprises competitiveness
 Rise of profitability investments projects for
strategic investors
 Financial,insurance, advice service on
carbon market
Assigned
Amount
Units
Federal
Authorities
Federal and
regional
legislation
Administrative Units of
Russian Federation
Emissions
Inventory
National trading
rules
Incentive to collaboration in
carbon market for Russian
enterprises of fuel and energy
complex
Audit
Project Portfolio
Energy Strategy
Source: RAO UES
Budgets, tariffs
National
monitoring,
reporting,
registries
Summary
 Russian Federation ratified the Kyoto
protocol
 Free quotas of greenhouse gases are
available
 Necessity of the market mechanisms
formation
 Three products in the carbon market
 Market sustainability and flexibility
 Greenhouse gases accounting and
monitoring
 Legislative stimulation of the energy-saving
and GHG emission reduction
 Regularly tenders for the GHG quotas
distribution among the Administrative
Units