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East-West Carbon Trading in Europe
April 6, 2000 – Radio Free Europe is reporting that the challenge of meeting Kyoto Protocol greenhouse reduction levels is causing some Western European countries to look eastward for help.
The Netherlands, Sweden and several other highly industrialized European countries are undertaking projects to reduce greenhouse gas emissions in Eastern Europe by building new, low-pollution power plants. In the process, the financing country will earn carbon credits that can be used to meet their Kyoto Protocol emissions reduction commitment.
According to Dutch Economics Minister Mauritz Henkemans, his country has launched an exploratory program with 41 small projects in countries like Bulgaria, Romania, Slovakia, Ukraine and Russia. Henkemans explained that "the costs in the Netherlands are very high to bring down CO2, and in Eastern Europe it is cheaper to reduce CO2 and realize energy savings. That’s why we think it is more effective to do it in the [Eastern] countries, and of course they have the advantage of getting investments and new technology in all these areas." The Dutch government plans to open the project to private companies in May, allowing them to create other projects. It intends to meet half of its Kyoto commitment by using credits earned in Eastern Europe.
Eastern European countries are believed to have an enormous amount of low-cost carbon credits project opportunities. An example of a typical project in Eastern Europe could be the replacement of an old and inefficient coal-fired power plant with a more efficient gas plant. This would greatly improve energy efficiency and reduce carbon dioxide emissions, while also yielding local environmental improvements.
The Kyoto Protocol, signed in 1997, creates an emission trading system that lets emission sources earn tradable credits by reducing CO2 emissions in other countries. Investors may then retain the credit to help meet Kyoto emissions reduction commitments.