10.11.2023
Experts: carbon regulation measures of Eurasian Economic Union countries are too soft
The Centre for International and Comparative Legal Studies recently conducted a study of the carbon regulatory infrastructure of the Eurasian Economic Union (EAEU) member states and their main international partners. It consisted in the formation of proposals for the harmonisation of legislation and the development of trade in carbon assets through a comparative analysis of the infrastructure of national trading systems, as well as in the identification of barriers and risks.
First of all, market mechanisms to stimulate greenhouse gas emission reductions (regulated and voluntary) were considered. The analysis was based on questionnaires completed by experts from the EAEU countries (November 2022 – January 2023). Additional consultations with experts were organised to obtain more accurate data.
The study showed that most climate regulation measures in the EAEU countries have been introduced recently and are assessed as soft. The same applies to decarbonisation targets and economic regulation instruments.
Only Kazakhstan has a national emissions trading system (ETS). No other country uses explicit carbon pricing instruments that would create economic incentives for decarbonisation. It was also noted that in the EAEU only in Kazakhstan there is certainty on the legal status of the carbon unit, where it is considered a commodity and subject to VAT. In Russia and other countries, this issue remains unresolved.
To date, there is only one regional pilot ETC in operation in the Russian Federation – in Sakhalin Region – but even this is assessed as soft. Kazakhstan and Russia also use an offset mechanism that allows companies to voluntarily reduce emissions through climate projects and issue carbon units for offsetting in cap-and-trade systems. However, such weak regulation cannot bring about major change. Both projects are barely implemented and, unfortunately, no real practice has yet been accumulated.
The general immaturity of carbon regulation in the EAEU region, on the one hand, requires urgent and ahead of the pace of rulemaking (of course, if the countries of the Union want to maintain the competitiveness of their economies). On the other hand, it is at this early stage there is an opportunity to harmonise regulatory systems and ensure their consistency.
In the future, the target type of carbon regulation in the EAEU space should be based on an understanding of the forms of collective competitiveness, first of all – the conditions for exporters from the countries of the Union to compete in large markets with more developed forms of carbon regulation. It is also important to take into account that if individual EAEU countries will introduce mirror carbon tariff measures, it will violate the unity of the customs space of the Union.
At the moment, the primary task for the EAEU (against the background of non-standardised development of carbon market infrastructure) should be the exchange of experience and technical support in the development of new mechanisms. The EAEU countries are already actively supported by international organisations and third countries that have advanced competencies and their own approaches to carbon regulation. Against this background, it is the dialogue within the EAEU that will help to take into account all the needs of the countries of the Union, as well as to prevent the risks of future differences in regulation.
In particular, it is also important for Russia to build its own system for trading carbon units, develop climate projects and find mechanisms for co-operation with other countries. Moscow Exchange experts believe that in order to develop the market, it is necessary to attract more interested participants and clarify the issues of taxation of carbon units.
Unsplash / Chris Nguyen / Jas Min
Other news
.jpg)
.jpg)
Comments