Economies on Transition: At the Crossroads of Development

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Economies on Transition At the Crossroads of
Development

• Olga Gassan-zade
• Center for Clean Air Policy, Ukraine
• SB-18, Bonn, June 9

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(No Transcript)
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EITs in the UNFCCC context
Annex-I

• FSU
• Russia
• Ukraine
• Candidate countries
• Romania
• Bulgaria
• Croatia

• New EU members
• Czech Republic
• Hungary
• Poland
• Slovakia
• Slovenia
• Latvia
• Lithuania
• Estonia

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Differences in EITs

• Regional affiliations
• Political history
• Level of governance and the rule of law
• Development of institutions
• Investment climate
• Attractiveness for KP mechanisms

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Per Capita FDI, 2000
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New EU and Candidate Countries

• Driven by accession
• History of private entrepreneurship
• Strong market and public institutions
• Active foreign engagement
• Diversification of GDP
• Previous experience with JI/AIJ
• Emissions trading as part of EU ETS

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Russia and Ukraine

• Strategic focus in heavy industry
• Competitive advantage in labor and
  energy-intensive industries
  
• Driven by domestic rather than by foreign
  investment
  
• Gross inefficiencies in energy and industrial
  sectors (Ukraine 15-16 bln)
  
• Lukewarm history with JI

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Energy and Carbon Intensity in EITs, 1998
Source Frankhauser, S. and Lavric, L. The
investment climate for climate investment Joint
Implementation in Transition countries, EBRD, 2003
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Industry Value Added in GDP
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Conclusions

• The candidate countries appear best positioned to
  participate in JI
  
• New EU countries will be part of EU ETS
• Russia and Ukraine will not see the amounts of
  investment they need to change the situation in
  their industries, energy and carbon intensities
  are rising

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Thoughts for the Future

• No reason to expect significant change in
  institutional development in Russia/Ukraine
  
• Climate change is not a priority in
  Russia/Ukraine
  
• If we fail to demonstrate that Kyoto can be a
  success this time therell be no case for the
  future.
  
• Sustainable development
• Good governance