Sunday, October 17, 2004

Russia is on the verge of putting the Kyoto treaty on global warming into force, but with a wink and a nod that reflects Moscow’s belief, that the toothless pact is destined to sink from its own weight.

Ever since Russian President Vladimir Putin’s Cabinet approved the treaty two weeks ago and sent it to the Putin-controlled parliament for pro forma ratification this fall, his chief spokesman has been bad-mouthing the treaty, calling it one of the worst plagues to be visited on Russia and the world economy.

“It’s clear the Kyoto Protocol is doomed from the longer-term perspective” because it will cause considerable harm to economic growth and progress in most nations, said Andrei Illarionov, Mr. Putin’s top economic adviser. Mr. Illarionov has been traveling around Washington criticizing the treaty, which surprises many because the document was officially endorsed by the Kremlin.

By the 2012 deadline, when ratifying nations must comply with the treaty’s strict limits on carbon dioxide and other greenhouse gases, “the lack of gains from the protocol will be so obvious to Russia, the European Union and Japan that they will decide to do something more reasonable,” Mr. Illarionov said.

The Kremlin’s decision to ratify was “very, very smart” and politically adroit, he said, because it keeps Russia in good graces with European countries that hold the keys to expanded trade and development in the country, while also helping avoid the taint of “unilateralism” that has haunted the United States since President Bush rejected the treaty in 2001.

The United States and Australia are the only two major developed nations that have not ratified the treaty, which goes into effect within 90 days of ratification by the Russian parliament. All 175 developing nations, including India and China, the world’s second-largest energy consumer, are exempt from the treaty.

China has cited its need to grow rapidly, raise living standards and develop its economy as reasons for refusing to join the treaty, which is aimed at curbing greenhouse gases, thought to cause global warming. Most of the gases come from burning fossil fuels for essential needs such as electrical power, heating homes, driving cars and running businesses.

The Bush administration and many American economists say the more than one-third cut in U.S. emissions and energy use required by the treaty would devastate the U.S. economy.

Russian officials are no less concerned about the economic effect on their country, but the treaty gives them several years of breathing room during which Russia could keep expanding rapidly without bumping up against the emissions ceilings that eventually would crimp growth.

Mr. Illarionov estimates that if economic growth averages 5 percent per year, Russia will not reach its limits until 2011. Under the most optimistic scenario, growth could go unfettered at 8 percent per year until 2007, when the limits would be reached, he said.

The grace period that Russia would enjoy, because it is well below the 1990 emissions levels imposed by the treaty, coincides closely with Mr. Putin’s constitutionally limited two terms ending in 2008 — a fact that apparently figured into the Kremlin’s thinking that ratification would create no immediate hardship.

In addition, Russia might reap some modest short-term economic benefit because the treaty gives an incentive for U.S., Japanese and European companies to help Russian industries modernize and make their plants more energy-efficient.

Upgrading Russia’s antiquated factories under the “joint implementation” provisions of the treaty would enable Western firms to get credit for emissions reductions at a much lower cost than they would incur at home, environmentalists say.

But although Moscow sees some short-term gains from ratifying the treaty, officials see it as anathema to Mr. Putin’s stated goal of doubling economic output by 2012, and say they will never allow the protocol to deter them from that long-term goal.

With growth currently averaging about 7.4 percent, Russia is making good progress toward Mr. Putin’s goal — one widely embraced in the country as the only way it can rise to Western living standards and make progress in poor and politically unstable regions such as Chechnya.

Development of Russia’s critical oil and gas resources — the nation’s engine of economic growth and biggest source of wealth, but also its biggest source of carbon dioxide emissions — in particular would be jeopardized by any strict application of Kyoto regulations.

“There is no way in the world that Russia will allow this treaty to stop our growth and development,” said one Russian official who is privy to the Kremlin’s thinking. The official described the Kyoto Protocol as a pet project of the European Union, where support for the treaty is the strongest.

“People say this is an environmental treaty, but I’m telling you it is an economic treaty created by the EU, and its goal is to rein in the growth in non-EU countries,” he said.

The anemic growth typical of economies in Western Europe and Japan holds down rapid growth in energy use and emissions like that seen in the faster-growing economies of Russia, China and the United States.

Tepid growth has made it easier for European countries to reach their emissions limits. Even so, economic studies show that many EU countries are substantially above their emissions limits, and growth will have to come to a virtual halt in Europe if it is to comply with the treaty by 2010, Mr. Illarionov said.

The punishing effect the treaty will have on growth and living standards — even in countries that most support it — is the reason it eventually will be discarded or ignored as unenforceable by all involved, the Russian officials said.

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