Bridges Weekly Trade News Digest • Volume 7 • Number 2 • 22nd January 2003
Climate Change: Russia Delays Ratification, US Carbon Market Launched
Following Canada’s ratification of the Kyoto Protocol at the end of 2002, Russia has become the next focus of attention by climate change observers, as its ratification would trigger the Protocol’s entry into force. However, Russian Deputy Minister of Natural Resources Maxim Yakovenko told journalists in mid-January that while the political issues related to ratification have been resolved, the economic issues have not yet been settled, and no date has yet been set for ratification. Experts have voiced their concern that delays at this point could "wreck the deal" underlying the Kyoto Protocol, which many say is already weak due to the absence of US support. Delays would also make planning activities in countries that have ratified difficult. A Greenpeace representative in Russia said the delays were due only to bureaucratic inefficiencies, and noted that Russia stood to obtain substantial economic gain from carbon trading.
While the US is not planning to ratify the Kyoto Protocol, the US private sector is nevertheless proceeding with carbon trading schemes. The Chicago Climate Exchange (CCX) announced on 16 January that trading in greenhouse gases, including carbon dioxide and methane, would begin this spring under a four-year pilot programme. The CCX has 14 members, including multinational corporations, and hopes to attract further members and to extend the programme beyond the pilot phase. The members — committed to voluntary reductions of greenhouse gas emissions by one percent annually over the next four years based on 1998-2001 levels — include Motorola, Ford Motor Co., DuPont, Finland- based Stora Enso, and American Electric Power, the largest carbon dioxide emitter in the US. Sources indicate that the participating companies hope the credits will eventually become internationally tradeable. The Bush administration, for its part, is seeking voluntary pledges, to be announced at the White House on 6 February, in an effort to show that voluntarily controlling emissions can make mandatory reductions unnecessary.
"Russia delays global warming pact, may wreck deal," REUTERS, 17 January 2003; "US pressing for cuts in greenhouse gases," REUTERS, 21 January 2003; "Greenhouse gases rise to exchange-traded status," REUTERS, 17 January 2003; "Big names join effort to tackle global warming," CHICAGO BUSINESS, 17 January 2003; "Shareholders act on global Warming," MSNBC, 16 January 2003.