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Russia Considers Domestic Carbon Market in Global Warming Fight

Power Plant No.5 operated by Kievenergo, a unit of DTEK Holdings BV, in Kiev, Ukraine, on Nov. 21, 2013. Photographer: Vincent Mundy/Bloomberg
Power Plant No.5 operated by Kievenergo, a unit of DTEK Holdings BV, in Kiev, Ukraine, on Nov. 21, 2013. Photographer: Vincent Mundy/Bloomberg

March 12 (Bloomberg) -- Russia is considering a domestic carbon market to cut greenhouse-gas emissions and may start providing poorer nations with cash to cope with global warming, according to the country’s climate negotiator.

“We would like to elaborate our domestic market and eventually make it link into other markets,” Oleg Shamanov said in an interview today in Bonn, where United Nations-led climate talks are being held this week. Russia may channel some money to the UN’s Green Climate Fund, set up to help finance emission-reduction efforts in developing countries, he said.

About 200 nations are in Bonn this week to debate climate-protection pledges for a treaty due to be signed next year and come into effect in 2020. Countries are negotiating pollution cuts to keep temperatures rising by a UN-endorsed maximum of 2 degrees Celsius (3.6 Fahrenheit) from pre-industrial times.

Russia, which favors a pact with 10-year emission-cutting targets, called on governments to decide on the time period for the international agreement.

“It’s very frustrating” that nations haven’t decided on how long the treaty will run, Shamanov said. “How can I do the homework if I don’t know the duration of the compliance period?”

Russia is seeking to make voluntary contributions to the Green Climate Fund, rather than get locked into obligatory payments, Shamanov said. “We are not in a position to make legal commitments about money” and it’s “alarming” some developing nations are seeking such pledges, he said.

The UN fund was set up to help channel some of the $100 billion a year of climate aid that developed countries have pledged to provide by 2020. The fund remains uncapitalized while its board finalizes how it will operate.

Russia Market

A Russian carbon market may not be ready by 2020, Shamanov said. The country has said it wants to limit emissions in 2020 to 75 percent of 1990 levels.

Russia is joining China, Chile and about 15 other nations developing carbon markets as countries seek to lower emissions, said Dirk Forrister, president of the International Emissions Trading Association and who was an adviser to former U.S. President Bill Clinton.

“The biggest countries are all considering carbon markets,” Forrister said today in an interview in Bonn.

To contact the reporters on this story: Mathew Carr in Bonn at m.carr@bloomberg.net; Stefan Nicola in Bonn at snicola2@bloomberg.net

To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Andrew Reierson, Sharon Lindores

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