International Charity organization “Environment-People-Law” Maryana Bulhakova maryanab@uoregon.edu

1. Presentation“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 “Environment-People-Law” Maryana Bulhakova maryanab@uoregon.edu

2. Plan • GHG emission quota trading mechanisms according to international documents. • 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.

3. Rules for international GHG emissions trading and two other “soft mechanisms” of Kyoto Protocol (Marrakech, Morocco, 2001) Necessary condition to keep quota reserve – for preventing from too high emission’s quota selling 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 conservation. GHG emission quota trading mechanisms according to international documents

4. 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 Protocol; • To register assigned amount of emissions; • Periodic preparing of national reports on climate change; • To place in National Registry.

5. Quota’s price • The price for quota depends on many factors, including the value of CO2 reduction, market demand and supply

6. 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)

7. Type of relationships in GHG emission trading scheme Public relationships Private relationships

8. 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

9. 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 permits. • 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.

10. 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 public. • National account in the Registry.

11. 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: • Will of enterprise (competitions, queues); • Objective necessity of implementing GHG emissions reduction projects; • 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.

12. 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: • GHG emissions permits (issuing conditions, annulling, permits transmission, price etc.); • Registers, functions of Register’s administrators; • Calculating and distributing GHG emissions permits; • Compliance the companies’ activity with the GHG emissions permits, appeal procedures; • Informing. National security. • Violations and penalties. • Authorities’ responsibilities.

13. Establishing sanctions for the violations of legislation that regulates quota trading mechanisms • For the violation of quota trading mechanisms sanctions can be established regarding: • state, as a party who ratified international agreement; • enterprises where environment-protective measures according to the mechanisms of Kyoto protocol are being implemented; • 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) responsibility.

14. 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 bodies; • Taking climatic issues into account during the environmental impact assessment; • Obligation to mitigate negative influence of certain sectors of economy on climate change; • 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.

15. 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).