EBRD, EIB join forces to offer their own emissions scheme

LONDON (Reuters) – The European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) want to help countries lagging their Kyoto Protocol targets buy the difference from those with emissions cuts to spare, they said yesterday. These deals do not involve actual pollution cuts, prompting green groups to say they undermine the aims of the protocol, but the EBRD and EIB want to make them more politically palatable by tying them to so-called Green Investment Schemes (GIS). The EBRD is owned by 60 countries, and sees itself as a broker to bring states together in such Kyoto-balancing deals. «Ukraine, Bulgaria and Romania are interested in (emission reduction) sales on the GIS,» said Jacquelin Ligot, director of energy efficiency at the EBRD, adding that he saw the first such sale by Romania next year. Under GIS, some of the profits a country makes from the sale of its emission surpluses it plows back into environmentally friendly projects. The EBRD has already tried GIS in Bulgaria, where it extended credit for banks to lend to small companies to improve their energy efficiency, Ligot said. The Kyoto Protocol allows countries such as Russia and those in Eastern Europe which are ahead of their greenhouse gas emissions targets sell the surplus to countries which are lagging, such as Spain, Portugal and Japan. Russia and Eastern Europe are ahead because the baseline year for the targets is 1990, since when their heaviest-polluting industries have collapsed in the face of a more competitive, post-communist economic climate. Russia has some 500 million tons per year of carbon dioxide (CO2) to sell, while Ukraine has more than 200 million tons, Poland 120, Romania 80 and Bulgaria 50 million tons. The European Union is 184 million tons per year behind its Kyoto targets, and Japan 171 million tons and Canada 141 million tons short, according to the JBIC. In addition to eyeing such Kyoto deals, the EBRD and EIB launched a carbon fund late on Sunday to promote funding by rich states of clean energy projects in Central and Eastern Europe. Companies and countries will be able to invest in the fund and put toward their Kyoto targets any cuts in greenhouse gas emissions which result. The EBRD and EIB are targeting 150 million euros’ investment and 20 million tons of CO2 cuts under the joint initiative.