Russia’s Carbon Credit Bank Seen as Barrier to Warming Curb
Does Russia hold hostage the future of a carbon cap-and-trade system that many experts see as a critical tool for curbing global warming gases? Improbable as it may seem, the answer appears to be yes.
That is because Russia, as a result of the collapse of much of its heavy industry in the 1990s, owns one of the world’s largest stocks of credits to offset carbon emissions.
The unearned windfall, a legacy of the Kyoto Protocol that was the world’s first attempt to come to grips with the threat of climate change, is worth several billion dollars. If abruptly sold abroad, those credits could send the price of carbon on the world’s fragile emissions markets plunging toward zero.
Without a predictable and reasonably high price for carbon emissions, most economists say, there is little prospect of setting in motion the many investments needed to shift from a carbon-intensive industrial economy to a more sustainable energy base in developed and developing countries alike.