www.abdn.ac.uk eu-russian climate cooperation: towards a post-2012 low carbon investment regime...
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EU-Russian Climate Cooperation: Towards a Post-2012 Low Carbon
Investment Regime
Anatole Boute
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STRUCTURE OF THE ARGUMENT
– EU external climate policy towards Russia– Challenges to low carbon investments in Russia– EU sponsored international regulatory initiatives:
• ECT Protocol on Energy Efficiency• Kyoto Protocol• International Partnership for Energy Efficiency• Export of the acquis communautaire
– Assessment and way forward
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The EU external climate policy
“Moral commitment”historical carbon debt and import of carbon intensive goods
Security of supplynecessity to guarantee availability of energy, in context of increasing competitiveness for energy resources
Competitivenessinternational diffusion of climate/energy efficiency/renewable regulation can support the EU industry
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EU climate policy in relation to Russia
“Moral commitment”
carbon cost of EU energy security: gas-coal switch, gas flaring
Security of supply
energy savings in Russia to ensure energy exports
Competitivenesshuge market potential for low carbon equipment
cooperation in achieving climate targets at least cost
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REGULATORY CHALLENGES TO LOW CARBON INVESTMENTS
Financial level playing field for low carbon investments
Declarative nature of regulation
Insufficient implementation / enforcement
Instability and unpredictability of investment climate
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EU sponsored international regulatory initiatives
Energy Charter Treaty Protocol on Energy Efficiency
Financing?
market-oriented price formation
full reflection of environmental costs
BUT
“in an economically efficient” / “cost effective” way
appropriate to states’ own energy conditions
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Declarative nature ? “strive to minimize” environmental impact of energy
“strive to ensure” that energy efficiency policies are coordinated
Implementation?
Russia and the ECT
Investment stability?investment chapter of ECT
BUT
focus on traditional political risks for traditional energy investments
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Kyoto Protocol
Financing?
flexible mechanisms: Joint Implementation
BUT
- possibility to “greenwash” hot air under JI “track I”
- post-2012 ban
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Declarative?
binding emission reduction targets
BUT
Russia’s post-2012 stance
Enforcement?compliance mechanism
Investment stability?Kyoto is about investment promotion not protection
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International Partnership for Energy Efficiency
Declarative?
EU idea: mandatory energy efficiency standards and targets
Outcome: voluntary partnership based on exchange of information, best practices, joint research.
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Export of the EU acquis communautaire
Declarative?mandatory targets for RES but indicative for efficiency
impact of low carbon prices on effectiveness of EU ETS
Implementation?will the renewable energy targets be met?
Stability?
changes to renewable energy support schemes
intervention with the ETS
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Joint projects with third countries under the RES Directive
Financing?mainly directed at helping EU Member States to achieve their target at least cost (import of RES-E)
Implementation?linked to EU RES targets
Stability?
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ASSESSMENT
Non-binding character of existing instruments
Indicative targets
Loose cooperation rather than compliance and responsibility
No clear protection against regulatory changes
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Possible way forward
Instability/unpredictability holds back modernisation main concern of low carbon investors: regulatory changes
EU and Russian regulation governing low carbon investments are characterised by similar deficiencies
take an investor perspective to depoliticise the debate
Focus on regulatory stability for low carbon investmentscommon rules to tackle common investors’ concern