Although Romania has got serious problems with environment protection, it is considered to be one main player in the implementation of the Kyoto Protocol. In a study published by PointCarbon, (Norwegian organization for research on the emission of gases with greenhouse effect,) and Vertis Environmental Finance (financial consulting group) Romania is the main state providing transferable permits on the market of carbon dioxide.
The last 15 years of decline in Romanian industry have effected in the cut on the emission of greenhouse gases with 50% below the rate set by the Kyoto Protocol. As for Romania, 1989 is set to be main level.
Slovakia, the Czech Republic, Poland, Bulgaria and Russia are some of the Central and Eastern European countries providing permits along with Romania. These state have also gone through economy reform and degrading of the industry sector.
Starting with January 2005, the European Union has become world leader in the fight against weather changes by creating a first market for transaction with emission of gases with greenhouse effect. In a first stage, in 2005 - 2007, more than 12,000 EU enterprises will have the opportunity to buy and sell emission of carbon dioxide. The founding of a system to trade emissions will allow the EU to cut down on costs related to the implementation of the Kyoto Protocol. The latter was adopted in 1997 and makes it compulsory for countries affiliated to it to diminish emissions of gases with greenhouse effect with 5,2%, as compared to the level in 1990. EU states have decided general cut down reaching 8%. Hence more than 12,00 enterprises have been given rates for emissions of carbon dioxide by means of National Allowance Plans, elaborated by every state and adopted by the European Commission. As far as he first stage is concerned, it refers to enterprises from fields like energy, building materials, paper, steel, glass, ceramics and oil refinery.
Although the EU Commission decision to create market for gas emission transaction is thought to be the most economic way to implement duties set by signing the Kyoto Protocol, the price of electricity might raise with 5% and the yearly cost of meeting assignments taken is to reach about 3 billion Euro, that is less than 0,1% of the EU PIB (the raw internal product).
Once market mechanisms for trade in gas emissions have been set, the price of 1 ton of carbon dioxide is to be shaped by offer and need. At present, this price is 8,50 Euro for 1 ton. Enterprises going higher than the rated set by the national plan will pay fine of 40 Euro per every ton released apart from the permitted rate. This would mean drastic cut on their competitiveness.
But enterprises managing to reduce emissions below the rate set by the government of the respective country will have the opportunity to sell to those enterprises unable to reach the permitted level, so that they would improve financial achievements.
Romania is a promising partner for common implementation projects
The European Commission has recently adopted new a document meant to reduce even more the costs of implementing the Kyoto Protocol. The document connects the market of trading transferable permits to bilateral projects on improving the efficiency of existing industrial units. Companies elaborating projects to reduce emissions in non- - EU states have the opportunity to turn such activities in allowances that would help them carry out the duties set in the Kyoto Protocol.
Given the inefficiency of Romanian industry, much of it caused by old-fashioned technologies, there are many opportunities for projects to cut down on the emission of greenhouse gases in Romania.
Austria, Denmark, France, the Netherlands, Norway, Switzerland and Sweden are some of the states Romania has signed agreements with. Germany and Italy have expressed interest in it, but without signing cooperation protocol yet.
Norway, for instance, will get transferable permits as consequence to the improvement of the heating system in the city of Fagaras. The latter will get 500,000 ton cut on the emission of carbon dioxide in 15 years' time and hence there will be significant improvement of the air quality. Norway will get 170,000 tons of emissions in 2008 - 2012 due to the investment in Romania. Another example of common implementation project is the improvement of the energy production of heating power plants in Buzau and Pascani, accomplished with help form the Swiss government. And there is also the Danish government setting filters in the concrete factory in Tasca, in North - Eastern Romania.
Main obstacles: administration and legislation
Although Romania is one of the first states signing the Kyoto Protocol, it will not manage to make use of its position as main provider of permits on the market of greenhouse effect gases, if it does not substantially improve administration and if it does not promote favorable legislation.
Romanian institutions whose tasks are to elaborate a national register of greenhouse effect gas emission, to estimate future gas emissions and to adopt a set of market mechanisms for transferable permits still lack the administration capacity to accomplish these missions.
The main measures to be taken refer to the improvement of legislation, the growth of human and financial resources (including wages, professional training, modernization of informational flux), the prompt publication of national statistics and the distribution of responsibilities to archive information in specialized institutions. High level corruption must also be taken into account, as it continues to influence the filed of Romanian business and this way lead foreign investors into uncertainty.
Both the Romanian government and industry must change approach to the obligations set by the Kyoto Protocol, so that Romania would profit of its privileged position as main provider of transferable permits for emissions of greenhouse effect gases. Success will mean healthy economical growth by brining latest technologies, protecting the environment and not last by cutting down on the cost of the integration in EU.