US embassy cable - 05MINSK1323

UNCLAS MINSK 001323 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV, ENRG, ETRD, ECON, PGOV, BO 
SUBJECT: Minsk Expects Big Profit from Kyoto Protocol 
 
 
1. (U) Summary: On September 23, Econoff met with Deputy Minister 
of Natural Resources Aleksandr Apatskiy to discuss Belarus' plans 
after acceding to the Kyoto Protocol, and its plans in general to 
reduce greenhouse gas emissions.  President Lukashenko signed the 
Kyoto Protocol into law in August, to take effect November 24. 
Minsk hopes to profit from the sale of pollution rights as its 
industrial production and greenhouse gas emissions plummeted after 
the USSR collapsed.  Apatskiy also described Belarus' early efforts 
to promote alternative fuels, particularly peat, firewood and wind. 
End summary. 
 
2. (SBU) On August 15, President Lukashenko signed a decree for 
Belarus to join the Kyoto Protocol, effective November 24. 
According to Apatskiy, in 1990 Belarus emitted 112 million tons of 
greenhouse gases.  By 2004 this had been cut in half to 56 million 
tons.  Apatskiy claimed this drastic reduction was due to GOB 
programs to modernize industry and reduce pollution.  [Comment: 
While there may be some truth to that, Belarus has been modernizing 
some of its obsolete early Soviet-era power plants and factories, 
most of this decrease is due to a drop in industrial production 
since the end of the Soviet Union.]  In October a group of 
"international experts" were due in Belarus to confirm this level 
of emissions.  The Ministry of Natural Resources hopes the first 
Kyoto Protocol conference will confirm Belarus' drop in emissions, 
opening the door to the sale of pollution rights. 
 
3. (U) The GOB hopes to profit from selling pollution rights.  GOB 
officials told the press the country could earn from USD 375 
million to USD 1.5 billion annually.  Apatskiy was a little less 
optimistic in person.  His ministry estimates Belarus could sell 
emission rights for between USD 50 and 300 per ton for a five-year 
period.  Belarus would need to adopt new legislation to allow this 
sale, which he thought could happen quickly.  However, he admitted 
there is no international mechanism in place for trading emission 
rights, either bilaterally or in a Kyoto Protocol pool.  Apatskiy 
said Belarus will soon propose a trading system under the Kyoto 
Protocol for selling pollution rights, hopefully to be operating 
place by May 2006. 
 
 
Falling Population Good for Carbon Sequestration 
--------------------------------------------- --- 
 
4. (SBU) The GOB is also interested in the possibility of making 
money by selling carbon sequestration rights, although it was clear 
the Ministry of Natural Resources had not spent much time 
considering this topic.  Apatskiy stated that 38 percent of Belarus 
is covered by forests, and that this had grown by three percent in 
the last decade.  He added that Belarus' bogs are also growing, and 
they are believed to draw more carbon from the atmosphere per 
hectare than do trees.  [Comment: Belarus has a falling population, 
which is increasingly moving to the cities.  For this reason 
farmland has been reverting to forest for several years.  President 
Lukashenko is trying to reverse this trend, but it is too soon to 
know how successfully.] 
 
 
Belarus Beginning to Look into Alternative Energy 
--------------------------------------------- ---- 
 
5. (U) Driven by its overwhelming dependence on Russia for energy 
(as much as 93 percent of Belarusian energy is imported from 
Russia), Belarus is starting to look into alternate sources of 
fuel.  The GOB is converting some factories and heating plants to 
use domestically available peat and firewood.  Apatskiy said 
Belarus is currently only using three to five percent of available 
hydropower, and is looking to greatly expand the use of wind power. 
Belarus has windmills at two test sites, a 600 kilowatt windmill 
complex at Narach and a 250 kw complex near Dzerzhinsk.  The 
Ministry of Natural Resources expects to receive money in 2006 and 
2007 to expand wind power, and Apatskiy claimed Belarus has 1,840 
potential sites where the average wind speed is between two and six 
meters per second.  His ministry is also looking into using biomass 
(mainly chicken and cow dung) to produce methane.  The ministry is 
currently drafting legislation that would offer tax breaks for use 
of alternate energy sources.  Apatskiy expected this would be 
considered in parliament in 2006. 
 
6. (U) However, recent Belarusian legislation has allowed a 
loosening of some environmental protections.  Apatskiy admitted 
that previously Belarus had a law that limited the growth in 
greenhouse gas emissions to 0.14 percent for every percent increase 
in GDP.  Recently the GOB raised the limit to allow emissions to 
grow 0.2 percent for every point of GDP growth. 
 
7. (SBU) Comment: Apatskiy and his ministry seem unduly optimistic 
that Belarus can cash in on the Kyoto Protocol.  Signing the 
protocol was painless for Minsk given its drop in greenhouse 
emissions after the fall of the USSR, and likely won the country 
some international goodwill.  However, with no mechanism in place 
to regulate the trade in pollution rights, Belarus is unlikely to 
benefit from its earlier economic collapse any time soon. 
 
KROL