UNDP plays an important role as a partner to the Government of Belarus in climate change policy and programs. Through its role as an implementing agency of the Global Environmental Facility, UNDP is supporting the development and implementation of several projects on climate change mitigation, including those in biomass energy, energy efficiency in the state sector, and land use. UNDP has also supported the development of the capacity of the Government of Belarus to address global environmental issues (through its NCSA program) and climate change in particular through a targeted project to develop capacity to implement mechanisms under the Kyoto Protocol. Finally, UNDP is working at the global level on project-based emissions trading under its MDG Carbon Facility. In the international carbon market, the Republic of Belarus is still facing the issue significantly limiting its carbon financing opportunities. The evident failure of the process of ratification of the Belarusian amendment to the Kyoto Protocol as per decision 10/???.2 resulted in non issuance of the country’s quantified emission reduction target yet. In these conditions, there are not many options to attract additional financing for GHG emission abatement projects, which are not in general profitable without such specific assets as carbon credits. The UNDP Kyoto Capacity Building Project has already contributed to the Belarusian Government’s decision concerning building up legal and institutional frameworks for Belarusian project owners’ access to the voluntary emission reduction market. This option however is also somewhat limited, since most of the standards existing in this market require retirement of AAUs, which Belarus may not possess until the beginning of 2010. There is one more opportunity to make GHG emission reduction activities in Belarus cost effective. The national emission trading would be a rational way to accumulate and reallocate accessible investment resources within the country likewise it is being done in the European Union where more than 60% of the aggregated Kyoto target has been met owing to so called the European Union’s Emission Trading Scheme (EU ETS). Until today, no study has been undertaken concerning the opportunity of introduction of emission trading in Belarus. It is clear that the study should involve the analysis of previous experience and existing practice in implementation of emissions trading. The EU ETS is mature enough to be considered as an example for this analysis. The knowledge of all factors influencing the effectiveness of EU ETS, risks, advantages and disadvantages of this market and recommendations derived from such analysis will be very useful for the elaboration of national emission trading scheme in Belarus. Objective The objective of the assignment will be to prepare a Briefing Paper on the analysis of experience of the EU Emission Trading Scheme operation with specific recommendations on the development of infrastructure for national emission trading in the Republic of Belarus. |