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Kazakhstan: Carbon Trade Scheme Fuels Divisions In Kazakhstan

uly 9, 2013 – 1:47pm Alisher Khamidov Viewed from the top of Kök-Töbe (Green Hill) a thick, hazy blanket of pollution settles over the southeastern city of Almaty in March 2011. The Kazakh government intends to implement a carbon dioxide trading scheme for companies generating polluting emissions. (Photo: Dean C.K Cox)    Authorities in Kazakhstan are at loggerheads with business executives over a plan to introduce a carbon dioxide trading scheme for companies generating greenhouse gas emissions. The government sees two benefits to the scheme — a healthier environment and more revenue for state coffers. But leaders of the country’s business community, including KazEnergy, a powerful alliance of energy producers, is opposing the plan, arguing that it would stifle economic growth and decrease Kazakh global competitiveness. Left largely unsaid is what the government would do with the extra revenue. In Transparency International’s most recent corruption index, Kazakhstan ranked 133 out of the 174 countries surveyed. According to various estimates, Kazakhstan annually generates approximately 240 million tons of CO2 emissions, and along with Ukraine, it accounts for only 2 percent of global carbon emissions . Despite this comparatively low emissions figure, Kazakhstan in recent years has sought to project itself as the regional leader in environmental protection. In 2009, Kazakhstan joined the Kyoto protocol, whose signatories pledge to fight global warming by reducing their greenhouse emissions. Using the year 1990 as a benchmark, Kazakhstan agreed to achieve a 15-percent reduction in emissions by 2020 and 25-percent drop by 2050. In 2012, Kazakhstan was first among CIS republics to announce the formation of the carbon emissions trading system (ETS). In keeping with the so-called cap-and-trade scheme, the government initially set a nationwide cap of 147 million tons on allowable emissions (using the year 2010 as the benchmark year for calculating quotas for companies). Officials then planned to distribute allowances among 179 state-run and private companies that account for 80 percent of all emissions. Companies that fail to reduce their emissions, or do not purchase allowances from other companies that have credits to spare, would risk incurring significant fines (approximately $15 per ton), or losing their business licenses, according to the Ministry of Environmental Protection. Government officials are extolling the virtues of the ETS. Addressing Kazakh law-makers at a November 2012 meeting, Minister of Environmental Protection Nurlan Kapparov said: “The advantages [of the ETS] need no mentioning. I will just give one figure. The market for carbon emission allowances in the EU was estimated at $120 billion in 2010.” Privately, some Kazakh observers say authorities are pushing ETS because promoting a green economy is currently one of President Nursultan Nazarbayev’s pet projects. ETS plans quickly ran up against stiff opposition in corporate corner offices. The push-back prompted officials to back down. For example, instead of using 2010 (a year when production was lower due to the fallout from the global financial crisis) as the benchmark year for emissions, officials agreed to use 2013, and adjust standards accordingly. Addressing a government meeting on June 11, Kapparov, the environment minister, announced ETS standards would go into effect in 2014, instead of 2013, and indicated that the government would soften punishments for companies that fail to comply with ETS standards. Even after the government backtracking, some observers say ETS standards may hit the country’s energy sector (particularly the coal industry) hard. Bela Syrlybayeva, an economist at the Kazakh Institute of Strategic Studies under the Kazakhstani Presidential Administration, told EurasiaNet.org; “The current situation demands urgent measures aimed at reducing emissions. At the same time, it is important to ensure a reasonable balance between the economic growth rate and development of low-carbon technologies.” ETS is lauded by the UNDP, but it is causing consternation of some foreign investors who say that they were not consulted. At a May 30 environmental forum held in Astana, foreign investors complained that they already pay various taxes for their CO2 emissions. The Ak Zhaik news website quoted Kenneth E. Mack, managing partner of Dechert’s law office in Almaty, as telling forum participants: “The tax for excessive emission is 10 times more than the tax for emission below the allowed limit. No other country has such a figure. On top of these, by Kazakh laws, administrative penalties and damage recovery sums are also levied .” A representative of KazEnergy, who agreed to speak with EurasiaNet.org on condition of anonymity, complained that ETS implementation was injecting uncertainty into the market. “The uncertainty regarding the volume, costs and rules in the internal carbon market is causing significant problems for investors as they plan their budgets and forecast growth,” the representative said. There is also widespread concern that companies with close governmental connections will get special treatment. In the court of public opinions, ETS is causing a different set of concerns. Abiljan Husainov, head of “Eko-Kokshe,” an environmental non-profit in the Akmola Province, told EurasiaNet.org; “The problem is that although we have good laws and regulations that protect environment, their implementation leaves much to be desired, especially at the level of small towns and villages.” Husainov added that “stricter measures must be adopted to preserve environment,” and that flaws in the monitoring mechanism, especially a lack of inspectors, will likely hinder compliance. There are also fears that the ETS can prompt businesses to pass along higher costs to end users, spurring inflation and generating discontent in many communities. Privately, some government officials, even some of Kapparov’s subordinates, have reservations about the viability of the ETS plan. Insiders say that the MEP is ill-equipped to administer ETS, and suggest it is possible that the 2014 implementation date will get pushed back again. Editor’s note: Alisher Khamidov is a researcher specializing in Central Asian affairs. Continue reading

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Capital Investments in Agriculture of Ukraine Increased by 10%

KIEV, Ukraine, June 12, 2013 /PRNewswire/ — Foreign investors are investing more in the agricultural sector of Ukraine. From January to March, capital investment in agriculture accounted for UAH 2.5 billion, 10% more than over the same period last year. Traditionally, the most attractive sectors for investors are the food industry, bioenergy and crop production, with major investors in agriculture coming from across Europe. First Vice Prime Minister Serghiy Arbuzov mentioned this fact prior to the first annual international conference “ABC: Ukraine & Partners”, initiated by the Ukrainian Government. “Between 2000-when investment levels in agriculture were at their lowest levels-and 2012, we have seen high annual growth rates. The government is working hard to ensure that they are constantly increasing, by creating transparent conditions for investors and deepening investment in public and private partnerships,” said Arbuzov. The First Vice Prime Minister also stressed that the food industry; bioenergy and crop production all traditionally show high ratings of investment attractiveness: “Investors look for those sectors of agriculture where there is a high level of profitability, export opportunities, high rates of scale and better terms of liquidity of investments,” he continued. Serhiy Arbuzov also underlined that the biggest investors in agriculture in Ukraine are European countries. Recall, First Annual International Business Conference will be held on June 13-14, 2013 at the capital based NSC “Olympiysky”. One of the business and government meeting topics will be the panel discussion “Investment in agricultural sector of Ukraine. Let’s Feed the world together.” First Vice Prime Minister of Ukraine Serhiy Arbuzov will participate in the discussion. SOURCE ABC: Ukraine & Partners /CONTACT: ABC organizing committee, tel +38(044)501-32-93/44, email: y.derevyanko@pr-service.com.ua Continue reading

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Climate Change: Russia Is Steamed About U.N.’s Kyoto Carbon Credit COP-Out

Representatives of Russia and other Eastern bloc countries at the recent climate talks in Bonn made it clear that they aren’t one bit happy about efforts within the U.N. Framework Convention on Climate Change’s Conference of Parties (COP) to cap their free Soviet-era  carbon credit trading green stamps previously gifted to them under the Kyoto Protocol. The original deal was that signatory nations that reduced carbon emissions by targeted amounts under their 1990 levels would be able to sell credits based upon tonnage improvements to countries that produced more than their allocations, thereby meeting quotas. In other words, a market was created to sell lots of hot air…something that the U.N. excels at. The idea, at least as presented by the FCCC, was to save our planet from dreaded CO 2 -induced global warming. Incidentally, we  might have credited that plan  for great success were it not for the fact that while global temperatures have been flat now for about 17 years, those atmospheric CO 2 levels have continued to rise. Yeah, But Russia Expected That All Along Originally, Russian President Vladimir Putin announced on December 2, 2003, that his country would not ratify the Kyoto Protocol because the rationale supporting it was “scientifically flawed”. He argued that even one hundred percent compliance with the agreement wouldn’t reverse climate change. The Russian Academy of Sciences presented scientific arguments against signing in a statement issued on July 1, 2005, noting that the world’s temperatures do not follow CO 2 levels. Instead, they observed a much closer correlation between world temperatures and solar activity. The Academy also determined that sea levels were not rising faster with warming; rather, they had been increasing steadily about 6 inches per century since the Little Ice Age ended in about 1850. In addition, the Academy discounted one of the most significant danger claims about global warming – that tropical diseases would spread – noting that malaria is a disease that is encouraged by sunlit pools of water where mosquitoes can breed, not by climate warmth. They also pointed out the lack of correlation between global warming and extreme weather, which a British government scientific delegation had admitted it could find no evidence to support. What ultimately caused Putin and the Russian duma to change their position and ratify the Protocol? It is widely speculated that Europeans were instrumental in getting Russia admitted to the World Trade Organization (WTO), and thus categorized it as a developing country rather than a developed one in applying the Protocol regulations. This meant that Russia received an opportunity to sell to European countries billions of dollars’ worth of Soviet-era emission credits associated with former dirty industries that had been casualties of economic melt-down. This would also help Europe meet Kyoto’s first-phase requirements without actually cutting emissions or energy use. Europe’s 1990 CO 2 emissions of 4,245 million tons fell to 4,123 tons in 2002 due to reductions in burning coal in both Britain and East Germany. Yet Kyoto Protocol requirements stipulated further European Union cutbacks to 3,906 million before 2012. A December 2003 U.N. report predicted that the E.U. would miss that reduction target by even more than that amount, namely, by dropping an additional 311 million tons. Since Russia’s 1990 emissions were 2,405 million tons, and had fallen by 2001 to 1,614 million tons, they could sell up to 800 million tons of credits to the Europeans at an “auction” price. This would be cheaper for Europe than shutting down fossil-fired power plants or removing trucks from its vital transportation infrastructure by means of escalating already high diesel fuel taxes. But Not Such a Great Deal for the U.S. Perhaps unsurprisingly, it wasn’t in the cards for the U.N. to offer the U.S. any breaks comparable to those accorded to the Europeans and Russians . First, unlike Europe and former Soviet countries that were treated as separate emission-credit-trading entities, the U.S. was treated as a single nation (allowing no credit exchanging between states to meet quotas). Second, the U.S. emissions in 1990 were not inflated to high target allowance levels as was the case in Germany, Britain, and Russia, making compliance much more difficult to achieve. In response to these inequities and other issues, our Senate passed (95-0) a rare unanimous bipartisan Byrd-Hagel U.S. Senate Resolution (S Res 98) that made it clear that the United States would not be signatory to any agreement that “would result in serious harm to the economy of the  United States”. Then-President Clinton, no stranger to political pragmatism, got the message and never submitted a necessary U.S. Kyoto Protocol approval request for congressional ratification. Heated Climate Negotiations Put On Ice Reuters reported on June 6 that U.N. talks aimed at progress towards a new 2015 climate pact agreement have now been stalled by objections from Russia, Belarus and Ukraine regarding procedural violations purposefully intended to eliminate their free carbon food stamp lunch. The UNFCCC now wants to renege on a deal they made with Russia to get them into Kyoto in the first place. Now that European carbon markets have recently collapsed with the price of carbon (hot air) hitting record lows, they are concerned that allowing Russia, Ukraine, Poland and other former Soviet bloc nations to retain the huge stockpile of carbon credits they picked up under Kyoto would further flood and depress the market. Ironically, those credits were originally granted as a reward to former Eastern bloc nations for the Communism which depressed their economic development prior to 1990, essentially compensating them for the economic destruction wreaked by their own Communist regimes. Poland, which will host COP 19 in November, has approximately 500 metric tons of carbon credits it plans to continue to sell to other nations including Japan, Ireland and Spain to offset its emissions from heavy coal use. Russia has since announced that it will not be part of a second Kyoto commitment period under these conditions, saying that they are committed to keep the credits and sell them to other countries regardless of a claimed COP “consensus” that would terminate them. They are still smarting over a snub during two-week-long U.N. Climate talks in Doha, Qatari last year when, during the final minutes, Vice Prime Minister Abdullah bin Hamad al-Attiya ended the eighteenth Conference of the Parties (COP-18) before their delegation which wished to be recognized could speak. While Christiana Figueres, the U.N.’s climate chief, claimed that a consensus had been reached, Oleg Shamanov, the chief negotiator for Russia’s delegation called that an “absolutely obvious violation of this procedure.” Shamanov added, “This is a systemic issue. Unless we put our house back in order, we may not be able to guarantee that in 2015 we end up with something productive.” Capitalizing on Wealth Transfer from Capitalism Carbon credit cap-and-trade marketing is but one U.N. climate alarm-based profiteering scheme aimed at global wealth redistribution. Another important agenda item for the UNFCCC’s  2015 Paris treaty to address is a planned “loss and damage” mechanism to seek compensation from “Tier 1” developed nations by a lawyered-up group of small island governments, the  Alliance of Small Island States (AOSIS),  premised upon global warming hazards caused by industrialization. AOSIS leaders, including Tuvalu, Kirabati, St. Lucia, and the Maldives, claim that man-made global warming is causing super-hurricanes and rising sea levels. And who is most to blame? Coincidentally, of course, those legions of lawyers have identified culprits with the deepest pockets…the U.S., Western Europe and Japan. Although China is now the world’s largest CO 2 emitter, they got a pass. Still to be determined, is the problem of how such penalties should be assessed. For example, if a Category 4 hurricane hits an island, how can anyone know which portion of that hurricane was caused by each nation?  Also, how much of it was caused by those coal plants and SUVs, versus at Mother Nature’s sole discretion? The idea of penalizing the West for trumped-up past and future climate crimes is certainly not new. Prior to COP-15 (2009-Copenhagen), several Latin American nations, the Philippines and the African Union claimed that Western countries owed developing countries trillions of dollars. U.S. and European delegation representatives attending the Copenhagen Climate Conference initially agreed to provide their “fair share”, pledging $10 billion in compensation per year from 2010 to 2012, The offer was rejected as an insult, discussions were temporarily interrupted as representatives of several undeveloped countries walked out of the meetings, and angry riots broke out in the streets over the injustice of such paltry penance. Then-Venezuelan President Hugo Chavez told the audience where to lay the blame for the world’s social, economic and climate problems: “If the climate was a bank, [the West] would already have saved it”. “The destructive model of capitalism is eradicating life”. “Our revolution seeks to help all people…Socialism, is the other ghost that is   probably    wandering around this room, that’s the way to save the planet; capitalism is the road to hell…Let’s fight against capitalism and make it obey us”. Then-Secretary of State Hillary Clinton then came to the rescue, offering to up the ante with a $100 billion annual contribution from the United States and our more prosperous friends to the “poorest and most vulnerable [nations] among us” by 2020. She said that the money would come from “a variety of sources, public and private, bilateral and multilateral, including alternative sources of finance”. Where it would actually come from no one knew, including Hillary and her boss. (Any guesses?) Time to End the Climate of Insanity It’s way past time to recognize that UNFCCC’s cap-and-trade, loss and damage compensation and other global wealth redistribution agendas have little or nothing to do with actually preventing a climate crisis, much less offering any benefits. Despite rising atmospheric CO 2 levels, global temperatures have not only been flat for going on two decades, but are predicted by leading scientists to cool over many future years or decades to come. Russia entered into the Kyoto Protocol realizing prior to that time that there was no convincing scientific climate-related basis for doing so.  More recent determinations by researchers at their prestigious Pulkovo Observatory in St. Petersburg project that the global average yearly temperature will soon begin to decline into a very cold and protracted climate phase. Pulkovo  Observatory head Dr. Habibullo Abdussamatov, one of the world’s leading solar scientists, member of the Russian Academy of Science, and director of the Russian segment of the International Space Station, believes that the deep freeze will last until the end of this century. He predicts that: “after the maximum of solar Cycle-24, from approximately 2014, we can expect the start of the next bicentennial cycle of deep cooling with a Little Ice Age in 2055 plus or minus 11 years” (the 19th to occur in the past 7,500 years). Dr. Abdussamatov points out that over the last 1,000 years deep cold periods have occurred five times. Each is correlated with declines in solar irradiance much like we are experiencing now with no human influence. “A global freeze will come about regardless of whether or not industrialized countries put a cap on their greenhouse gas emissions. The common view of Man’s industrial activity is a deciding factor in global warming has emerged from a misinterpretation of cause and effect.” Russian scientists Vladimir Bashkin and Raulf Galiullin from the Institute of Fundamental Problems of Biology of the Russian Academy of Science agree that climatic changes are characterized by natural cycles which have nothing to do with activities of man. As Bashkin observes: “A global warming that so many are talking about is not so much a scientific problem, rather it is much more a marketing trick…We do not have global warming ahead of us.  Rather, we have global cooling.” Yes, and that marketing trick is one that the UNFCCC, including the Russian’s, has learned to play very well. Continue reading

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