Russia's signature to Kyoto may not reduce carbon emmissions

A panel of industry and NGO representatives spoke this week at a major CSR conference in New York on developments regarding Kyoto, the global emissions-reduction protocol ratified by the former Soviet Union’s signature on Saturday.

The speakers pointed out that the Putin government’s decision represents a business opportunity for Russia, which has gained valuable emissions credits since the 1990 collapse of its communist-run industries. The country will now be able to offer these credits in a lucrative sale to Western European polluters as a signatory to the Kyoto agreement.

But, said a World Bank expert, depending on various calculations, including how many of the accumulated credits are bought, the outcome of Russia’s signature could be an increase in emissions in Western Europe.

According to panelist Asif Faiz, program manager of the Carbon Finance Business at the World Bank, the strategy for conversion of these credits into a net gain for the environment could attach restrictions to the sale of clean-air vouchers by the former communist bloc.

“The goal is the greening of the AAUs,” said Faiz of the credits, which are known as Assigned Amount Units. Greening the credits would, under a proposal Faiz described, mandate that the CIS states invest profits from those sales into sustainable, environment-friendly infrastructure, like hydroelectricity and other technologies.

Emissions impact

While Europe wrestled with the consequences of Kyoto, Japan demonstrated more than 7% increase in emissions in 2002, said conference presenter Hidemi Tomita, CSR and environmental affairs vice president at Sony Corporation.

However, Tomita attributed Japan’s relatively low overall contribution to greenhouse gases to low transportation-linked pollution and its vigorous response to the oil shocks of the 1970s.

Tomita also spoke of government targets for appliance makers like Sony to match the energy-efficiency of the “Top Runner” device in any category.

“The equivalent of 10 million fewer cars,” is how panelist Tom Catania of American appliance giant Whirlpool described the impact of his company’s targets for energy-efficiency. Citing the company’s 4% reduction of emissions in absolute terms despite significant distribution growth of their products,

Catania explained that consumer-level energy usage represents 90% of the company’s emissions impact. Vice president of Government Relations for the firm, he noted the absence on the panel of a representative from a heavier polluting industry like transportation or energy.

Raising the cost of non-compliance

According to Elliot Diringer, director of international strategies at The Pew Center on Global Climate Change, climate policy in the U.S., the world’s largest greenhouse gas emitter, will be influenced less by the Kyoto Protocol than by the impact of such agreements on US-based multinationals.

The management of multiple emissions criteria by those companies will raise the cost of non-compliance with global protocols, said Diringer.

Additionally, regulations by states and regions will apply pressure on the federal government to adopt changes to climate policy.

Diringer said that polls indicate the US public believes climate change is real and do not see enough action on the issue, and he suggested new scientific data might combine with public opinion to make a stronger case to government and industry.

However, scepticism was expressed at the conference this week about the possibility that the Bush Administration would alter its current policies on climate change, which are scheduled for re-evaluation in 2012.