Russia is a party to the 1997 Kyoto Protocol, which calls for a new international agreement to combat climate change. The European Union (“EU”) has been pushing hard for such an agreement, which would obviously impact Russia, the third largest greenhouse gas emitter in the world. But the EU is also pursuing unilateral legislative initiatives which would oblige Russia to take action. These include a cap and trade system for GHG emissions; a tax on CO2 emissions and energy content; and the so-called Industrial Emissions Directive. Unless Russia adopts its own climate change legislation, the EU may impose its own rules on Russian imports or stop recognizing Russian emissions allowances. Russia must act quickly to develop legislation that will be seen internationally as equivalent to that of the EU.
This article was originally published in the Eurasian Metals Bulletin.