issue of surplus emissions permits (Assigned Amount Units i.e. AAUs) under the
Kyoto Protocol is emerging as one of the crucial sticking points in the
negotiations. The excess of emissions permits that will be available to
Countries of Central and Eastern Europe and
the Former Soviet Union is fuelling EU and Japanese arguments that the Kyoto
Protocol should be replaced. Addressing this problem is both politically and
environmentally necessary, if a second commitment period of the Kyoto Protocol
is to be agreed.
paper sets out the position of all parties and draws following conclusions:
issue of surplus AAUs is shaping up as a crucial sticking point in the
negotiations around the future climate regime.
Russian position contains several contradictions which may provide an entry
point for negotiation on the future use of AAUs. Europe and developing
countries will need to engage in these negotiations to find a workable
is hard to see how the CEE member countries could really benefit from the carry
over given the likely sub-prime value of these assets post 2012, and the fact
that they cannot use them for their own post 2012 compliance. Instead a
proposed potential avenue may be to establish a non-tradable strategic
compliance reserve from the first commitment period surplus of AAUs.