Soviet industrial collapse reaps climate credits

As other countries struggle to cut greenhouse gas emissions, two ex-Soviet industrial powerhouses have found themselves heirs to an unlikely windfall.

Russia and Ukraine head into the Copenhagen summit with credits for billions of tons of carbon dioxide they no longer belch, thanks to the collapse of the Soviet industrial machine that gave them favorable terms under the 1997 Kyoto Protocol.

The situation allows the two countries not only to pollute more but also sell carbon credits to other countries for millions of dollars.

Now environmentalists and some European countries are urging Moscow and Kiev to give up those credits and strengthen efforts to slash global carbon production. Both countries say they won't do so without a fight.

President Dmitry Medvedev said in a video blog posted this week that Russia is committed to limiting greenhouse gases by 2020 by expanding the use of nuclear power and promoting energy efficiency. "This is a question of existence itself," he said.

But he also pointed out that Russia's carbon emissions today are about 34 percent lower than they were in 1990. He said the Kremlin plans to allow emissions to grow over the next decade, although by 2010 they will still be 25 percent below 1990.

Alexander Bedritsky, a Kremlin adviser, told reporters last week that European nations are calling on Russia to slash its output of carbon dioxide at a time when the European Union hasn't been able to meet its own goals under Kyoto. He said the EU's emissions have risen steadily since 1990, unlike Russia's.

"They take on certain commitments, don't fulfill them and then go out there shouting about new and more ambitious ones," he said.

In 1990 the antiquated Soviet military-industrial complex was still churning along at full speed as smokestacks belched hot gases and soot across the U.S.S.R. But the Soviet Union collapsed a year later and by the mid-1990s many of these factories were shuttered and rusting.

Under the Kyoto treaty, emissions cuts are measured against 1990 levels, meaning that on paper, former Soviet states have made steep cuts over the past 20 years. This gave them billions of tons of carbon allowances that they could sell on to other countries, mainly in Europe, which needed them to meet their own commitments under Kyoto.

Many Kyoto participants have complained of the alleged injustice of this provision. But a key priority for both Russia and Ukraine at the current climate talks in Copenhagen is to hold on to these credits after Kyoto expires in 2012.

In addition, Russia wants any new treaty to recognize the capacity of its vast forests to absorb carbon dioxide, a proposal that could allow the Kremlin to claim credit for huge new emissions cuts. Critics say these would result from ingenious accounting rather than increases in energy efficiency or the adoption of cleaner technology.

Vladimir Slivyak, co-chairman of the Moscow-based environmental group Ecodefense, said Monday that Russia should freeze its current level of carbon dioxide emissions rather than allow them to grow.

"We think technically and economically, it is more than possible," Slivyak said. "It is just a question of political will."

Ukraine has also said that it would only be prepared to reduce emissions by 20 percent compared to 1990 levels under the Copenhagen agreement, which translates into an increase of around 30 percent from today's emissions levels.

"This is not a meaningful contribution at all," said Maria Kovalenko, the director of the Kiev office of Point Carbon, a global analytics firm for the carbon market.

Igor Lupaltsov, the head of Ukraine's National Agency for Ecological Investment, which handles climate policy, said that his country's main priority in Copenhagen is to keep 1990 as the base year for calculating emissions. That would allow Ukraine to keep all the preferential benefits it won under Kyoto.

"This is a pretty serious compromise on our part, considering that our industrial output was cut in half after the collapse of the Soviet Union, and we still need to catch up," he said in televised remarks.

Under the Kyoto treaty, countries that produce less than their quota of carbon emissions can sell them to nations that need credits to meet their lower targets.

The decision to give Russia, Ukraine and other eastern European nations credit for reductions from Soviet-era levels of production was in part a recognition of their economic problems after the Soviet collapse.

In part, it was intended as an incentive for struggling ex-Soviet countries to sign up to the climate agreement, which would have failed without their participation.

The United Nations says Ukraine still has around 500 million tons of excess carbon it can produce each year under Kyoto, and Russia has about 1.1 billion tons per year.

Slivyak and other environmentalists are worried by warnings from Medvedev and others that Russia may not sign a successor to Kyoto if the U.S., China and other major industrial nations don't do so as well.

In his blog, Medvedev said Russia would not go it alone in pledging cuts in carbon emissions. "Trying to do this on our own will be fruitless and pointless," he said.

Bedtritsky, the Kremlin adviser, told reporters last week that "no agreement on climate would be effective without the United States."

Bedritsky also seemed to warn that Russia, where much of the land is above the Arctic circle, was not as vulnerable to climate change as other nations and might even benefit from a warmer earth.

He noted that higher average temperatures would vastly expand available arable land and save huge amounts of energy now used for heating cities.

But he said that Russia would suffer from climate change as well, citing a recent increase in the number of icebergs in the Barents Sea threatening offshore oil platforms. "We can't afford to say we won't be doing anything" about greenhouse gases, Bedritsky said.

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Simon Shuster reported from Kiev.

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