Russia Won’t Sell Kyoto Carbon Credits, Blinov Says

By Alex Morales and Mathew Carr

Dec. 3 (Bloomberg) -- Russia will refuse to sell surplus carbon-emissions credits to other nations, removing from the market the biggest single pool of licenses to pollute under the Kyoto global-warming treaty, a government official said.

Victor Blinov, the deputy chief of Russia’s delegation to the United Nations climate talks in Poland, said in an interview yesterday evening that the country will hold the credits beyond the Kyoto Protocol’s 2012 deadline so they may be used in a successor treaty that’s being negotiated.

Russia has enough spare credits to release 3.3 billion metric tons of carbon dioxide through 2012, the World Bank said. While Kyoto credits are sold over-the-counter without published prices, Russia’s holding is worth 46 billion euros ($58 billion) based on a similar UN-certified credit trading in London. Global carbon trades totaled $64 billion in 2007, the World Bank said.

“These extra emissions should be banked for the next period” covered by a new pollution-limiting treaty, Blinov said. “We want to keep them because of the potential for economic development for the Russian Federation.”

Economic growth is easier for a nation when it has more room to increase emissions of carbon dioxide. CO2 is the main gas blamed for global warming and a common air pollutant from steel factories and electricity plants to cars and buses.

Under the treaty, 37 nations were given greenhouse-gas emissions targets for the 2008-2012 period and were granted pollution credits that can be sold if they undershoot the goals.

Under Limit

Russia’s Kyoto target was to match its average annual emissions in the measurement period compared with 1990, a goal it will easily meet, the World Bank and carbon analysts have predicted. As of 2006, output of the gases in Russia had fallen 34 percent from 1990, according to the UN.

A United Nations certified emission reduction for December, a CO2 allowance similar to a Kyoto credit, rose 5 cents to 14.15 euros a metric ton ($17.86) euros a ton on the European Climate Exchange as of 11:43 a.m. in London.

Russia’s estimated 3.3 billion spare credits are equivalent to one-and-a-half years of greenhouse-gas emissions from all of the factories and power plants in the 27-member European Union.

Refusing to sell credits, called “assigned amount units” under the Kyoto treaty, will remove a potential pool of CO2 licenses that might be bought by nations such as Italy or Spain, which are headed to exceed their credits granted under Kyoto.

The 1997 treaty gave the 37 nations emissions targets. Each must buy credits or similar permits for each ton of CO2- equivalent they release in excess of their limits. CO2 equivalent is a unit of measurement that includes carbon dioxide and five other greenhouse gases regulated by Kyoto.

To contact the reporters on this story: Alex Morales in Poznan, Poland, via amorales2@bloomberg.net Mathew Carr in London at m.carr@bloomberg.netKatarzyna Klimasinska in Poznan at kklimasinska@bloomberg.net