The legal framework necessary to operate joint implementation projects under the Kyoto Protocol in Russia was put into place in late 2007, and the move was cheered by investors and others anxious to benefit from the program. Since the necessary rules and regulations came into effect, however, no joint implementation projects have been approved, calling into question Russia’s commitment to the global climate change agreement and raising the possibility that fewer of the country’s emission reduction units will be sold to other countries.

As of December 2008, 31 joint implementation projects had been submitted to the Russian Government for approval, but decisions are still pending in all cases. Russia may be delaying the approvals in order to keep its extra emission reduction units to use for future climate change agreements and to allow for additional expansion of its industrial sector. If Russia does not approve any of the projects, the potential pool for emission reduction units that may be bought by other countries during the first compliance period under the Kyoto Protocol will by reduced by Russia’s share of the units.

Though Russia signed the Kyoto Protocol in 1999, it was the last country to ratify the agreement before it could enter into force in early 2005, and the Russian Government has subsequently been relatively slow to implement the measures necessary to meet eligibility criteria for participation in the Kyoto Protocol mechanisms.

Of the three mechanisms available to parties to the Kyoto Protocol for meeting their emission targets, Russia chose to employ joint implementation agreements, which allow for countries to develop collaborative projects to reduce greenhouse gas emissions. Joint implementation projects have been seen as particularly advantageous to Russia and other countries of the former Soviet Union, as the Kyoto Protocol set base emission levels at 1990 levels. After an initial decline in energy consumption and industrial output in the 1990s, levels have begun to increase, and Russia’s aging industrial infrastructure stands to benefit from new energy-efficient technologies that can be brought in from other countries.

In the period from 2005 to 2007, Russia complied with most of its Kyoto Protocol commitments. In particular, in the beginning of 2006, the Russian Government approved the establishment of (i) a national registry of carbon units (currently being maintained) and (ii) a national system for estimating emissions and reductions in emissions. Limits for reducing greenhouse gas emissions for the first compliance period were also approved.

Despite the progress made between 2005 and 2007, the necessary legal framework for joint implementation projects in Russia was only recently put into place. Article 6 of the Kyoto Protocol allows participating countries to transfer or acquire emission reduction units through joint implementation projects, and in May 2007 the Russian Government adopted a key resolution that outlined the review and approval procedure for such projects. The resolution authorized the Russian Ministry of Economic Development to coordinate the preparation of joint implementation projects and to submit them for Government approval.

To further develop the procedure for approving joint implementation projects, the Ministry of Economic Development issued a number of other regulations that came into force between late 2007 and September 2008. In particular, a commission responsible for approving joint implementation project applications was formed, and the commission selected a group of independent expert organizations authorized to evaluate joint implementation projects at its first meeting, held in February 2008. The Ministry also established limits for target indicators of the effectiveness of joint implementation projects in the Russian chemical industry and approved the form for the project passport that must accompany each application.

Russia’s commitment to joint implementation projects was further called into question when Russian officials attending the December 2008 United Nations Climate Change Conference in Poznan, Poland, were quoted in various media sources as saying that Russia may refuse to sell emission reduction units to other nations and will, instead, hold them for use in complying with a successor agreement to the Kyoto Protocol that is currently being negotiated. Officials further stated that Russia has more assigned emissions units than it needs, and that the Russian Government sees an advantage to saving the extra units for the next phase of agreements, where Russia may be able to “spend” its credits on further economic development.

At the Poznan conference, officials from around the world worked on negotiating an interim plan for a successor agreement to the Kyoto Protocol, and the final agreement is expected to be approved at the UN Climate Change Conference in Copenhagen at the end of 2009. The future of these climate change initiatives remains uncertain, particularly in Russia, and observers will be watching carefully to see if any joint implementation projects will be approved and emission reduction units sold in Russia.