|
The investment climate for climate investment: Joint Implementation in transition countries
Under the Kyoto Protocol, transition countries are expected to become
important players in the emerging market for greenhouse gas emission
reductions, as they can reduce emissions at a relatively low cost. However,
the attractiveness of the region as a supplier of emission reductions will not
only depend on its cost advantage. It will also rely heavily on the business
climate offered to carbon investors. Factors like a well-functioning legal and
regulatory system, economic and political stability and the capacity to
process emission reduction projects efficiently will be key. This paper looks
at the carbon investment climate in the transition countries eligible for
Joint Implementation (JI) – Russia, Ukraine, Croatia and the EU accession
countries of the region. It concludes that JI investors will face a clear
trade off between the scope for cheap JI on the one hand, and the quality of
the business environment and JI institutions on the other. The countries with
the highest potential for cheap emission reductions also tend to be the
countries with the most difficult investment climate. The institutional
capacity for JI is lowest in countries where the business environment and
institutions are generally weak. It is also low in the most carbon-efficient
countries, where there is less scope for, and hence less interest in, JI.
|
|
