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Russia should set prices on carbon markets: WWF expert
MOSCOW (AFP) Nov 03, 2004
Russia should set prices on a new market for carbon emission rights since Moscow will hold the biggest quota, an expert for the World Wildlife Fund said here Wednesday.

"Russia should take advantage of its position as the main quota supplier to set prices on carbon markets," the biggest of which is to begin operating in the European Union on January 1, said Yuri Safonov, who is also director of the department of environmental economics at Russia's Higher School of Economics.

The Russian ministries of economic development and trade are to unveil a program concerning the new market by the end of the year, he told a press briefing.

The market is one of three incentives under the UN's Kyoto Protocol aimed at easing the cost of reducing carbon dioxide pollution, the main culprit for global warming.

Russia, which ratified the protocol on October 27, could sell up to two billion tonnes of carbon dioxide (CO2) emissions rights by 2008, Safonov estimated.

"The established price of five euros (6.3 dollars) a tonne, should increase to at least 20 dollars a tonne according to most Russian experts," he added.

The International Energy Agency has estimated Russia will have an emissions quota surplus of 600 million tonnes, while the European Union should be running a deficit of roughly 200 million around 2010.

Russia and other former communist countries found themselves with surpluses after they closed inefficient factories in the 1990s.

Under Kyoto, 38 industrialised countries -- now 36, with the refusal of Australia and the United States to ratify it -- pledged to limit their output of greenhouse gases by a deadline of 2008-12.

Each country can decide how to achieve that target, apportioning the burden among consumers, taxpayers or corporations by using for instance carbon taxes or laws or awareness campaigns to promote energy efficiency.

The carbon market is a big component in that basket, and traders believe that the Russian ratification of the Kyoto Protocol will give the newborn sector an enormous boost.

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