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“Green Investment Schemes – greenhouse
gas emissions quotas trading mechanisms
in Ukraine according to the Kyoto Protocol
  to the Convention on Climate Change”

      International Charity organization
             Maryana Bulhakova
•   GHG emission quota trading mechanisms according to international
•   Quota’s price.
•   Climate protection legislation in Ukraine – the base for the GHG emission
    quota trading mechanisms in Ukraine.
•   Type of relationship in quota trading mechanisms in Ukraine.
•   GHG emission quota status.
•   Obligatory reduction of GHG emissions in Ukraine. Participation of the
    Ukrainian enterprises in quota trading schemes.
•   Emissions trading Registry.
•   Spending the money received from selling quota to the other countries.
•   What should be regulated in legislation for the emission trading
    mechanisms to work properly.
•   Sanctions for the violation of the legislation that regulate quota trading.
•   Some amendments to the existing laws.
•   Public participation.
GHG emission quota trading mechanisms
 according to international documents
• Rules for international GHG   • Necessary condition to keep
  emissions trading and two       quota reserve – for preventing
  other “soft mechanisms” of      from too high emission’s quota
  Kyoto Protocol                  selling
(Marrakech, Morocco, 2001)      • Obligation for countries from
                                  Annex 1 to prepare reports on
                                  their activity in using
                                  absorbents for receiving the
                                  right to participate in emission
                                  trade mechanisms and other
                                  mechanisms, as well as the
                                  information about the taken
                                  steps in biodiversity
 To be eligible to use mechanisms of quota trading
     according to Kyoto protocol Parties to the
Convention should comply with certain requirements
• To be a Party to the Kyoto Protocol;
• To adopt national rules and procedures of adopting the projects,
  their monitoring and verification;
• To establish national system for the estimation of anthropogenic
  emissions by sources and anthropogenic removals by sinks of all
  greenhouse gases not controlled by the Montreal Protocol;
• To submit annually the most recent required inventory of
  anthropogenic emissions by sources and anthropogenic removals
  by sinks of all greenhouse gases not controlled by the Montreal
• To register assigned amount of emissions;
• Periodic preparing of national reports on climate change;
• To place in National Registry.
                   Quota’s price
• The price for quota depends on many factors,
  including the value of CO2 reduction, market
  demand and supply

          600                                              Ukraine
          400                                              Russia
          200                                              EU
                price for reducing of 1 tonn of CO2, US$   Japan
   Climate protection legislation of
Ukraine – base for the quota trading
   mechanisms on GHG emissions
• Practically absence of legal regulation of
  environmental issues concerning climate
  change mitigation (e.g. on the level of
  normative principles, as well as concrete
  competence of governmental bodies that
  implement climate protection policy)
  Type of relationships in GHG emission
              trading scheme The

    Companies in             Companies in
      Ukraine                  Ukraine

                                                The                    The
                                               other                  other
                                               states                 states

• Public relationships                      • Private relationships
Status of GHG emission quota in Ukraine

• The realization of unused right (allowance)
  on GHG emissions, according to the
  established quota for Ukraine.
• The quota is a state’s property
  Obligatory reduction of GHG emissions in
 Ukraine. Participation of certain enterprises in
       quota trading scheme in Ukraine
• The state in the relationships with the enterprises in Ukraine should
  hold the position of the subject of public law, to be able to establish
  obligatory responsibilities regarding GHG emissions reductions.
• As far as participation in trading is voluntary, it is necessary to
  foresee incentives for the companies to take the steps aimed at
  GHG emissions reduction.
• Economical mechanisms, aimed at GHG emissions reduction (EU
  experience) – establishing taxes on CO2 emissions and other
  energetic taxes, standards of heat insulation, purchase of emissions
• In EU trading scheme in certain branches limits are being counted
  for certain enterprises. At the end of reporting period the enterprise
  should demonstrate its compliance with the requirements of
  established emissions limits. Thus, if the enterprise overuses its
  quota, the projects of emissions reduction should be established in
  the company on obligatory basis.
  Registry of emissions trading

• Regular entering of the information the conforms
  with the reality to the monitoring body.
• The permits on CO2 emissions, amount of units
  of CO2 emissions to be sold and reduced should
  be registered in the Register, as well as
  transferring quotas from one account to another.
• Registers should be partly accessible for public,
  but there also should be sections closed for
• National account in the Registry.
Distribution money received from other states
      for the GHG emissions quota selling
•    Special purpose of spending money received from
     selling excessive quota for the following GHG
     emissions reduction.
•    Complex joining of the following elements:
a)   Will of enterprise (competitions, queues);
b)   Objective necessity of implementing GHG emissions
     reduction projects;
c)   GHG emissions reduction projects design and
     approval on concrete enterprises.
•    Creating of independent body with the members of
     lawyers, economists, state governors, including
     experts and scientific personnel for the work on the
     projects of GHG emissions reduction.
        What should be regulated in Ukrainian
     legislation in the Emissions trading scheme
•     Policy of prevention the negative consequences of climate change and
      GHG emissions trading should be carried out by authorized bodies;
•     Creation of reporting system, anthropogenic GHG emissions and
      absorbents assessment, system of GHG emissions agreements
      registration (Registry functioning);
•     Rules on GHG emissions trading scheme (UK Rules, 2005) regulate
      following key issues:
1)    GHG emissions permits (issuing conditions, annulling, permits
      transmission, price etc.);
2)    Registers, functions of Register’s administrators;
3)    Calculating and distributing GHG emissions permits;
4)    Compliance the companies’ activity with the GHG emissions permits,
      appeal procedures;
5)    Informing. National security.
6)    Violations and penalties.
7)    Authorities’ responsibilities.
      Establishing sanctions for the violations of
legislation that regulates quota trading mechanisms

•    For the violation of quota trading mechanisms
     sanctions can be established regarding:
1)   state, as a party who ratified international agreement;
2)   enterprises where environment-protective measures
     according to the mechanisms of Kyoto protocol are
     being implemented;
3)   the other participants of the quota trading market.
•    For the violation of environmental limits of emissions
     there can be: a) criminal, b) administrative, c) material,
     d) disciplinary, e) environmental (preventive)
    Some changes to the existing
       legislation in Ukraine
•   The climate should be considered as an object of legal environmental protection
    (direct norm in the law);
•   Among main principles of environmental legislation it is necessary to foresee the
    obligation to take the steps to prevent negative climate change;
•   Necessity to carry out scientific research in this sphere, defining the responsible
•   Taking climatic issues into account during the environmental impact assessment;
•   Obligation to mitigate negative influence of certain sectors of economy on climate
•   Reporting of enterprises on implemented policy aimed at mitigation influence of their
    activity on climate change;
•   Concrete steps, aimed at GHG emissions reduction in energy sector, building sector,
    agriculture and other industries;
•   Obligation for enterprises to carry out steps aimed at GHG emissions reduction;
•   Direct norm about responsibility for non-compliance with the prohibition of activity that
    leads to negative climate changes, obligation to comply with normative stipulations of
    activity that influences climate change.
          Public participation
• Access to information regarding climate-
  protection policy in Ukraine;
• Participation in decision making process and
  law-drafting work;
• Appropriate consideration of the results of public
  participation in decision making process by
  competent authorities;
• Mechanisms of public participation in GHG
  emissions trading scheme (Registry users,
  access to information about spending money
  received from selling quota).

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