Russia’s Delay on Kyoto Masks Internal Financial Debates

Russia’s will-she-or-won’t-she tap dance on the question of ratifying the Kyoto Protocol may be less mystifying than it appears to outside observers: It might just come down to money. Many economists and energy experts inside and outside of Russia believe the country stands to make millions, possibly billions, from the carbon-trading system that Kyoto will establish. The country is still below the 1990 emissions level it is held to by Kyoto, so it could sell credits; it also stands to profit from so-called joint implementation projects, wherein countries or companies unable to meet targets help fund modernization of facilities elsewhere. Unified Energy Systems — Russia’s state energy monopoly, which produces 2 percent of the world’s carbon emissions and 70 percent of Russia’s electricity — is undergoing a massive reorganization, and until it becomes clear who stands to benefit from privatization and carbon credits, Putin is expected to stall on Kyoto.