Analysis: East Europe's change of climate

By SAM VAKNIN, UPI Senior Business Correspondent  |  Nov. 7, 2002 at 1:09 PM
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SKOPJE, Macedonia, Nov. 7 (UPI) -- The 185 member states of the U.N. Climate Change Convention met last week in New Delhi to contemplate what steps may be needed to implement the Kyoto protocol, already ratified by 95 countries, including the members of European Union. Signatories have 10 years -- starting in 2003 -- to cut their emissions of greenhouse gases.

In the decade or so of transition, the countries of Central and Eastern Europe have suffered droughts and floods in equal measure. They attribute this shift in climate patterns to global warming. Ironically, the crumbling of their smokestack industrial infrastructure reduced their emissions by 38 percent between 1990-2000, according to a report presented at the conference. In Estonia, transition's poster kid, emissions declined by 56 percent, according to the official Estonian News Agency, or ETA.

The OECD countries increased their emissions by 8.4 percent over the same period. This disparity between rich and poor nations in Europe casts a cynical light over the EU's constant environmental castigation of East Europeans. The EU adopted the Kyoto protocol in May and committed itself to a total reduction of 8 percent of emissions by 2012.

Even if wildly optimistic forecasts regarding car usage and the restoration of Central and East Europe's manufacturing base are met, emissions would still be well in compliance with annex I of the Kyoto protocol, which lists the reductions required of the candidate countries.

This cannot be said about present EU members and other rich, industrialized polities. Lawmakers in the former communist bloc are aware of it.

"We must calculate and anticipate the maximum possible improvement for our own industry so that in a few years we don't find ourselves purchasing (pollution) quotas," Viktor Shudergov, head of the Russian Federation Council Science, Culture, Education, Health, and Ecology, said in a recent media interview. "Russia is currently the world's major supplier of oxygen in the atmosphere. Other countries are using Russia's biological resources to develop their industries.

"The United States has every possibility to reduce its own emissions but refuses to do so. It would have been more useful if the main source of ecological pollution, the United States, had participated (in the Kyoto agreement)."

Central and East Europeans have a few things going for them as far as the environment goes. Public transport is more developed in the countries in transition than in the rest of the continent. Industry -- rebuilt from scratch -- invariably comes equipped to minimize pollution. Private cars are less ubiquitous than in Western Europe. Vast swathes of countryside remain virtually untouched, serving as "green lungs" and carbon sinks.

If, as the European Commission, the EU executive, envisions, a community-wide regime of emissions trading is established, the countries east of the Oder-Neisse line could well benefit as net sellers of unused quotas.

Romania's Ziarul Financiar newspaper reported last year the country's government negotiated the sale of some $20 million in carbon dioxide emission rights to Japan.

A similar deal -- this time for about $4 million -- was struck with the Swiss. The money was used to refurbish the decrepit central heating systems in a few townships. The interesting twist is that the very enhancement of the energy efficiency of the antiquated pipelines freed portions of the emissions quota for sale.

It is telling that Romania was unable or unwilling to sell its emissions to Britain, Denmark, or the Netherlands, all of which host functional emissions-trading pilot projects. The trading rules are so complex -- certain sectors and gases are excluded and fiendishly intricate auctions regulate the initial allocation of quotas -- that many potential buyers and sellers prefer to abstain.

Estonia circumvented the nascent exchanges altogether. It convinced the Dutch, Finns, Germans and Swedes to invest in reducing carbon dioxide emissions in Estonia. The reductions, according to the Baltic News Service, will be applied to the quotas of the investing nations.

Still, the political leadership of most countries in transition understands it has at least to be seen to be supportive of the Kyoto process. Russia announced in the World Summit on Sustainable Development in Johannesburg, South Africa, last September its intention to ratify the protocol by the end of the year. It will also host next year's International Conference on Climate Change. Its Prime Minister Mikhail Kasyanov boasted of a one-third reduction in emissions in recent years.

Environment ministries -- a novel fixture -- have proliferated throughout the region and, backed by the international community, have become assertive. The Croatian minister of environment, for instance, warned his own government in March, in his first national report on local climate changes, of international sanctions due to a considerable increase in the emissions of noxious gases since 1990.

According to the Regional Environmental Center for Central and Eastern Europe, many countries in the region -- including three New Independent States, Ukraine, Bulgaria, and the Czech Republic -- have completed national climate change action plans. Hungary, Kazakhstan and Russia are preparing theirs. The British Broadcasting Corp. says Slovenia is working on a program of its own, though in compliance with the Kyoto requirements.

Less scrupulous politicians regard the environment as another way to extract funds from Western governments and multilateral lending institutions. Especially active are the European Bank for Reconstruction and Development and the World Bank. The former approved $12 million to Vetropak Straza, Croatia's only glass factory. The money will be invested in a new technology with less harmful emissions.

Together with Citibank, the EBRD is committed to financing the $470 million conversion of the Bulgarian thermal power plants, Maritsa 2 and 3 to more efficient and less polluting coal burning. The EBRD is collaborating with the Dutch to establish a carbon credits market exclusive to its client states -- the countries of Central and Eastern Europe and the Balkans.

Pollution-phobic European countries -- mainly in Scandinavia -- work with the World Bank and match its funds in specific environmental undertakings. Thus, the Danish Agency of Environment has financed 13 projects in Bulgaria last year, part of $18 million it has granted that country alone since 1995. It is now assisting Bulgaria in its application for World Bank funds to counter the effects of past pollution.

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