Russian Ratification of Kyoto Could Spark Large Scale Renewable Energy Development
By Sarah Ferriter *

Following the ratification in November by Russia’s Duma the Kyoto Protocol will come into force on February 16, 2005. Under the Protocol’s terms, industrial country parties will be obligated by the 2008-2012 time frame to limit their greenhouse gas emissions, in most cases reducing them slightly below 1990 levels. The Protocol that will go into force is somewhat enfeebled as it will lack participation of the US and Australia, which together generate about 40% of all industrial country emissions and it also has no enforcement teeth. The European Union, however, seems ready to develop real teeth to ensure compliance by its member states and this prospect seems likely to produce a rising value to carbon dioxide offsets. Facing anti-Kyoto arguments from contrarians, some of whom see a warming as beneficial to Russia and regard emissions controls as limiting Russian oil and gas development, Russian President Vladimir Putin decided to opt with the Europeans who had lobbied him heavily. Much of the speculation following ratification by the compliant Duma has concerned what Putin got in return from the Europeans- trade concessions, commitments on energy investment or some other inducement. In the longer haul, however, perhaps the more significant result of Russian participation in Kyoto may be a prospect of stimulating wide scale development of cheap, renewable energy.

The Kyoto Protocol establishes a framework for confronting and managing the output of systems contributing to the build-up of carbon dioxide and other greenhouse gases in the atmosphere. By some estimations, Russia already stands to gain upwards of $10 billion by selling of its extant carbon credits (see http://www.pointcarbon.com/... ), mostly , the so called “hot air” emissions reductions resulting from the collapse of inefficient Soviet era industry. Perhaps the more intriguing question pertains to how much Russia has to gain from diversifying its energy-based economy with solar, wind, geo-thermal and other important types of “climate-friendly” renewable energy resources.

The opportunity for sustainable development in Russia on the eve of implementation of the Kyoto Protocol is an enticing prospect. It is doubtful that any other country has renewable energy resources equivalent to Russia. The International Energy Agency’s World Energy Outlook (www.worldenergyoutlook.org) outlines the implications of Russia on the world energy market. Exploitation of Russia’s wealth of natural resources is of immense global significance. Currently renewable energy sources in Russia are underutilized, and when exploited to their full economic potential could make up one third of Russia’s total primary energy supply (TPES). In 2001, the IEA reports, less than 3% of Russia’s TPES (887 Mtce) was derived from non-hydro renewable energy, but non-traditional energy resources (i.e. everything besides nuclear and fossil fuels) have remained largely untapped. In terms of economic potential, these non-traditional types of energy; geothermal, small hydropower, biomass, solar and wind (listed from highest to lowest economic potential), amount to over 270 million tonnes of coal equivalent (Mtce) each year. In contrast, technical potential of renewables in Russia amounts to 4,593 Mtce, and gross energy potential (total available resources) for renewables is estimated at over 500 times the technical potential and over 8,500 times the economic potential. Economic potential is based in part on the current price of fossil fuels, and therefore fluctuates with the energy market and with the advent of new technologies.

The most abundant form of renewable energy in Russia is geothermal, representing over half of the economic potential for renewable energy. Russia’s Far East, where geothermal resources have the most potential, is the only region importing oil for energy production. The millions of households removed from the central electric grid and now dependent mainly on diesel generators for expensive power are a “low hanging fruit” that can be harvested by entrepreneurial geothermal or wind developers.

The stage is now set for Russia to profit from exporting carbon credits earned coincidentally with the break up of the Soviet Union. Russia can benefit exponentially by using this revenue to invest in the renewable energy market since doing so will earn the nation more carbon credits, and build a more diverse and stable, economic base.

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Furthermore, turning to locally produced and long-term sources of energy will also help solve many problems with an inefficient and dilapidated infrastructure for distributing fossil fuels over Russia's massive landscape. Recent economic trends have been favorable to Russia because of the higher prices for oil and gas abroad. This limited economic growth should not hide the fact that Russia's economy is extremely vulnerable to even slight variations in the price of fossil fuels. Russia's future depends on diversifying the economy to rely less upon fossil fuels and more upon renewables. As the objectives of Kyoto are met, and perhaps exceeded, steering farther away from its reliance on fossil fuels may provide more staying power to the Russian economy.

Ironically, Siberia, the Russian Far East, and the windy North could be on the verge of becoming a bastion of renewable energy development, catalyzing a more sustainable energy revolution for all. In the past all of these regions suffered exploitation for the Kremlin’s benefit with absolute disregard for the environmental consequences. Development activities profiting from its vast natural resources may soon be sparked by the most pressing environmental issues humankind has ever-faced; the disruption of our planet’s climatic system and our unsustainable reliance on fossil fuels. The combination of large- scale and economically exploitable resources of wind and geothermal and Kyoto related carbon credits may transform these regions from environmental wastelands to a key part of the planetary response to climate change.