Russia says has no plans to cap carbon emissions

MOSCOW (Reuters) - Russia will not accept binding caps on its greenhouse gas emissions under a new climate regime, currently being negotiated to succeed the Kyoto Protocol after 2012, top officials said on Monday.

Kyoto puts a cap on the average, annual greenhouse gas emissions from 2008-12 for some 37 industrialized countries, including Russia.

But former communist countries are well within their emissions targets, which are compared to 1990 levels, because their industries and carbon emissions subsequently collapsed after they struggled to adapt to free markets.

As a top energy producer and consumer, Russia welcomed the fact that Kyoto had not limited its carbon emissions and expected the same of any future climate deal, said Vsevolod Gavrilov, the official in charge of Russia's Kyoto obligations.

"Energy must not be a barrier to our comfort. Our emerging middle class... demands lots of energy and it is our job to ensure comfortable supply," he said.

"We don't plan to limit the use of fuel for our industries. We don't think this would be right," he said, referring to the current round of Kyoto.

Asked if Russia would resist capping the use of fossil fuels, which emit the planet-warming gas carbon dioxide when burned, under a new climate deal after 2012, he said:"In the foreseeable future, this will not be our model, no."

He pointed out that the United States had also declined to impose emissions caps.

But Russia welcomed investment from other industrialized countries to help it clean up its energy and industry, saying in this way it could prevent greenhouse gas emissions equivalent to 3 billion tons of carbon dioxide.

Under Kyoto, industrialized countries which are missing their emissions goals can pay for cuts elsewhere -- if that is cheaper -- getting carbon offsets in return.

OFFSET

Industrialized countries spent some 326 million euros last year buying such offsets from former communist countries, under Kyoto's Joint Implementation (JI) scheme.

"We see (Kyoto) as a means, not as an end in itself... It is a way to get new technology for our industries," said Gavrilov.

A key way for Russia to profit from the planned 3 billion tons of emission reductions will be by trapping and processing natural gas, a by-product of oil production.

By 2012, Russia has called for 95 percent of its associated gas to be harnessed and sold, whereas more than 25 percent of it is currently flared, wasting 20 billion cubic meters of natural gas a year and releasing carbon dioxide into the atmosphere.

"Why is the flaring of gas so common? It's because of economic barriers to building infrastructure that will process it," said Mikhail Stavsky, vice president of Russia's largest oil firm, Rosneft.

With the help of trading in carbon offsets, Stavsky said that the profitability of such gas harnessing will roughly double, and the return on investment in the projects will come in 7 years, compared to 17 years without Kyoto.

Russia's gas export monopoly Gazprom will also use these mechanisms to harness the gas, said Alexander Ishkov, the head of its energy saving and environmental department.

"We are expecting to cut tens of millions of tons of carbon dioxide equivalent" by 2012, he said.

Out of the twelve emissions-reduction projects that have applied for JI approval, several are from companies at least partly owned by Gazprom, Oleg Pluzhnikov, Gavrilov's deputy at the Economy Ministry, told Reuters.

"They are keeping a low profile for now. But when they see it working, I think they will put their name behind it."

(simon.shuster@reuters.com; +7 495 775 1242))

($1=.6385 Euro)

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