Carbon market as presentiment

Photo: RISS

On 24 May 2016 the Conference on green economy and low-carbon development at the Russian Institute for Strategic Studies brought together leading Russian experts on climate policy and sustainable development to introduce the Integrated Program for Climate Initiatives (IPCI) and the establishment of IPCI-based Carbon Registry. The launch of Carbon Registry by Russian Carbon Fund provides grounds for creation of basic carbon market institution in Russia.

Organized by Russian Carbon Fund, social movement Green Russia, Russian Institute of Strategic Studies and Ecocom, the event gathered state representatives, sustainable business leaders, Russian and international experts to discuss options for Russian pilot carbon emissions limitation and reduction model.

The aim of the conference was to promote economic approaches for the development of low-carbon strategies based on direct and explicit inclusion of environmental costs into regular economic activities to enhance environmental integrity and competitiveness of Russian economy in the global scale.

The most prominent outcome of the conference was the official presentation of the IPCI-based Carbon Registry introduced by the CEO of Russian Carbon Fund Alexey Shadrin.

The Carbon Registry, a key element of the IPCI, is a tool for creation and management of carbon units that allows participants to record projects and to issue, track, transfer and retire mitigation outcomes (including carbon credits). Progressive IT-concept and platform under development would enhance the Carbon Registry infrastructure, transparency, efficiency and scalability necessary for the launch of Russian carbon market.

To ensure the best market practices and add value to climate projects and carbon units, the Carbon Registry applies robust IPCI requirements and criteria to confirm eligibility of GHG emissions reductions. In accordance with the eligibility criteria, project proponents, willing to be listed in Carbon Registry should justify that the mitigation outcomes, carbon emission reductions are actual and absolute, verified by an independent entity, quantitatively measurable, irreversible, permanent or long-term, secure or insured, additional or target-oriented, not otherwise required by compulsory regulations units of anthropogenic GHG emission reductions or removals by sinks.

Eligible projects should be based on absolute emission limitation and reduction targets and quantitative commitments and comply with the following basic requirements:

1. Cover certain set of existing sources and installations
2. Provide for limitation and reduction relative to de-facto emissions of the established set sources
3. Relate to certain commitments and accounting period. Baseline year is 2013 or later
4. Are based on robust and independently audited monitoring, reporting and verification system
5. Are not otherwise required by compulsory regulations or commitments registered under other than IPCI programs and mechanisms of limitation and reduction of GHG emissions
6. Provide sufficient security for the pledges and commitments to ensure performance
7. Under IPCI, offsetting of emissions from the new sources in full by absolute reductions of emissions from the existing sources is required.

A number of project developers and GHG emission source owners have already confirmed their intention to register the projects and projects outcomes in the Carbon Registry. According to Sergey Sitnikov, partner of Causa Privata Law Firm, establishment of the Carbon Registry in Russia will breathe a new life into the pilot Russian carbon market, give a chance to Russian climate projects to attract additional financing and motivate the regulator to make further steps towards the development of the carbon regulation in Russia.

As for the Integrated Program for Climate Initiatives, it is designed to develop a distributed network of mitigation contributors based on common principles, rules, criteria, as well as an accounting platform to achieve absolute emission reduction targets, compliance with quantitative emission limitation commitments. The goal of the Program for Climate Initiatives is to integrate corporate and regional mitigation initiatives within Russia and EAEU, in the first place.

The Program ensures overall mitigation in GHG emissions in whole and through individual and joint activities of stakeholders in accordance with international agreements, principles, rules, and modalities adopted in pursue of UNFCCC.

«The initiative is aimed at the harmonization of the emissions reduction projects implementation and accounting rules and development of international cooperation in this field», — Russian Carbon Fund`s Chairman of the Council and ECOCOM Deputy CEO Anton Galenovich comments.

Basic Program Requirements shall include those consistent with guidance to be adopted by the UNFCCC Conference of the Parties serving as the meeting of the Parties to the Paris Agreement regarding the use of internationally transferred mitigation outcomes. The Program shall promote sustainable development and ensure socio-environmental integrity, transparency, accuracy, completeness, comparability and consistency together with robust accounting to guarantee, inter alia, the avoidance of double counting and provide for responsibility of carbon compliance units issuer.

«We believe that the launch of the IPCI and the Carbon Registry which are based on the internationally recognized guidelines will enhance the development of the Russian pilot carbon market and simplify the access to the international carbon markets for Russian organizations and project developers (and are very pleased that the first projects already apply to the Registry). It will lead to attraction of climate finance and allow hedging of project and transactional risks. The Carbon Registry welcomes cooperation with the best market practitioners worldwide to, inter alia, ensure harmonization of various carbon approaches and policies, and kindly invites them to join the Registry Council for mutual cooperation to achieve this goal» — stated Alexey Shadrin in his closing speech.

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