Senior Research Fellow,
Fridtjof Nansen Institute, Oslo
Dr. Anna Korppoo





Introduction: AAU surplus before Doha

Russia and Ukraine were over- allocated emitting rights (Assigned Amount Units – AAUs) under the first commitment period of the Kyoto Protocol as their economic activities had declined dramatically during the transition following the collapse of the Soviet Union. In the first commitment period we saw that the decline of their emissions was a more permanent trend than originally expected; in 2010, Russia’s emissions remained 34% and Ukraine’s 59% below the Kyoto commitments of not exceeding 1990 level emissions(1). This indicates surpluses of over 5.5 Gt and 2.5 Gt respectively.(2)

According to the Kyoto Protocol, any unused AAUs can be carried over to the next commitment period. Regardless, the over-allocation to Russia and Ukraine was considered as unfairly generous by many Parties, and more importantly, as a threat to the environmental integrity of the Protocol. Revisions of the Kyoto rules have been suggested by many, ranging from a total ban on banking the surplus to limiting its quantity or use.(3) Such limits were fiercely opposed by the transition economies (EITs), who considered the surplus their sovereign property and morally justified as compensation for the hardship experienced by their populations during the collapse of their economies. Russia and Ukraine have repeatedly emphasized their over-achievement of commitments under Kyoto and considered it as evidence that they have done more than their fair share to solve the global climate crisis in comparison to the actions of others. This argumentation starkly contrasts with the understanding of the issue by most non-EIT Parties, and has often been interpreted as Russia and Ukraine protecting their economic interests linked to use of the Kyoto mechanisms.

Russia ratified the Kyoto Protocol for foreign policy reasons as after the withdrawal of the US it would have been impossible without Russia to bring together the 55% of Annex I emissions required for the entry into force of the Protocol. Regardless, though understandably, Moscow has remained critical of the coverage of the Kyoto Protocol, and as the list of participant countries was getting even shorter, announced its withdrawal from the second commitment period already in 2011. Ukraine was planning to join the second commitment period, probably driven by the economic opportunities from the Kyoto mechanisms. These are less important to the oil and gas rich Russia. Beyond the Annex I countries, the former Soviet states Belarus and Kazakhstan established processes to join the Kyoto Protocol already during the 2000s, but with little success due to the surpluses their proposals contained. They also submitted commitments under the second commitment period.

The Doha Decisions and Dynamics

Thus, coming to Doha, Russia had clearly dropped out of Kyoto, regardless of some last-minute lobbying attempts by domestic carbon market actors.(4) The rest of the EITs had submitted emission limitation targets relative to 1990 level; Ukraine -20%, Kazakhstan-7% and Belarus -8%. In comparison to their 2010emission levels, these pledges would have secured the countries a right to increase their emissions by94%, 27.5% and 43%, respectively, from 2010 level by 2020. Assuming the emission dynamic of 2000-2010 to continue until 2020, Ukraine’s pledge was extremely loose while there was also some significant leeway in Belarus’ pledge. Following the same logic, Kazakhstan’s pledge would have suggested a need for real emission reduction measures.

In Doha, regardless of its withdrawal from the second commitment period, the EITs were led by Russia on the surplus issue. Other parties negotiating with Russia, especially the EU, were frustrated by the lack of clarity on how the EITs would like to solve the surplus issue.(5) In the final plenary, the Qatari COP18 President Al Attiyah adopted an Amendment to the Kyoto Protocol without allowing opposition by the EITs regardless of Russia’s vocal attempts to ask for the floor. Based on the statements shortly after, Russia strongly disagreed with this procedure stating that it ‘seriously undermines the legitimacy of the regime and trust between the participants’.(6) The climate advisor to President Putin, Alexander Bedritsky, later on labeled the procedural practice as ‘legal nihilism’.(7)It is yet to be seen what the diplomatic consequences of stretching the problematic UNFCCC concept of consensus decision-making are this time(8); it is unlikely to have a positive impact on the participation of the EITs in the future.

Beyond the procedural disagreement, the Amendment contained both favourable and unfavourable elements from the EITs’ perspective. The main positive development was allowing the carry-over of the first commitment period surplus AAUs; it is to be transferred to a ‘previous period surplus reserve’ account of each Party. The amount that other Parties can acquire from such carried-over surplus was set to be no more than 2.5% of the acquiring Party’s first commitment period AAU. Beyond this, as a protest against the carry-over of surpluses – those of Russia’s and Ukraine’s could in theory offset over 8 Gt of emission reductions elsewhere – most other Annex I countries stated in the Doha closing plenary that they will not purchase such AAUs.The participation in the Kyoto mechanisms i.e. to acquire or transfer units was limited to countries which have adopted a commitment under the second commitment period. In addition, Doha introduced a 2% share of proceeds to be levied from the transfer of AAUs and issuance of ERUs to be contributed to the Adaptation Fund. EITs have opposed this for a long time.

What comes to the second commitment period pledges of the EITs, the loose targets that would have generated an additional second commitment period surplus were limited. The Amendment 7ter established that ‘any positive difference between the assigned amount of the second commitment period for a Party included in Annex I and average annual emissions for the first three years of the preceding commitment period…shall be transferred to the cancellation account of that Party’. (9) This makes a significant difference to the EITs who had pledged headroom to accommodate their future economic growth. In practice the Amendment excludes allocations of AAUs to cover such growth, and thus, would oblige Ukraine, Kazakhstan and Belarus to compensate any growth of emissions from 2010 level through domestic measures or external AAUs. Table1 shows how significant the difference is between the original pledges and the current level of emissions; in the case of Ukraine, the second commitment period AAU was cut almost by half. This also demonstrates the size of the avoided second commitment period surplus.

Table 1. Key numbers under Kyoto second commitment period of Ukraine, Kazakhstan, Belarus and Russia

Data sources: → GHG data → detailed data per party; → GDP growth
Notes: Russia has announced that it will not participate in the second commitment period of the Kyoto Protocol; the numbers of Russia in this table are thus speculative for the purposes of the analysis only, and as a result, placed in brackets.

What makes this Amendment problematic is the lack of clarity that prevails on which way the first commitment period surplus can be used for country’s own compliance. Amendment 7ter reduces the AAU allocation to the level of the latest emission inventories (average of 2008-2010 emissions), while the assigned amount is defined by Paragraph 25 of the Amendment as equivalent to the country’s commitment – without mentioning the impact of7ter . The Amendment could thus be interpreted to allow the previous period surplus reserve to be used for domestic compliance only when emissions grow beyond the commitment level. Following this logic, the annual difference between Ukraine’s AAU allocation and the commitment level is ca. 350 Mt(10), but the country’s emissions would have to exceed 774 Mt (its commitment level) before it is be allowed to tap into its own surplus reserve for compliance. In practice, this would leave Ukraine to buy allowances to compensate for any emission increases.

Russia and Ukraine have significant surpluses(11) which they may be able to use for compliance – depending on the interpretation of 7ter as well as their participation in the second commitment period – while Kazakhstan and Belarus have none due to their non-Annex I country status during the first commitment period. Kazakhstan and Belarus would thus in any case have to buy allowances or implement domestic mitigation measures in order to comply with their commitments should their emissions exceed the (economic downturn) average of 2008-2010. The interpretation of the mismatch between Paragraph 25 and 7ter dictates whether this would also apply to Ukraine (and in theory, Russia).

What next for the EITs?

Russia has been launching the idea of carry-over of its surplus to the future global agreement. Thus, regardless of the Amendment, Russia is likely to bring up the surplus issue also in the future negotiations. After the procedural disagreement around consensus decision-making in Doha, Russia’s general tone is likely to strengthen. But on the other hand, the second commitment period provided also Russia an opportunity to carry over its surplus AAUs, even though it looks like Moscow has opted not to do this. Turning down this opportunity could weaken Russia’s morally phrased argument to carry over the surplus to the future agreement.

Before Doha, Russia was preparing to adopt a domestic target of -25% emission limitation relative to 1990 level by 2020; this was also mentioned by the presidential climate envoy Alexander Bedritsky in his official statement in Doha. It remains to be seen whether this development continues regardless the disappointments experienced. Since the Doha developments, president Putin has established an inter-agency working group on climate change and sustainable development under the presidential administration.

Belarus has already expressed views against the ratification of the Kyoto second commitment period(12), and given Kazakhstan’s fairly strong emission growth dynamic (on average 3.8% per annum during 2000-2010(13)) its withdrawal would be hardly surprising. For Ukraine the jury is probably out until it becomes clear whether the previous period surplus reserve is allowed to be used as a de facto buffer against emission growth in terms of domestic compliance.


Doha succeeded in solving the surplus issue for now by limiting its use while allowing the disputed carryover to take place as stated in the Kyoto Protocol. Further, the Amendment ensured that obvious new surpluses were not allocated. This certainly made sense from an environmental point of view. However, the legal uncertainty concerning the definition of assigned amount under Paragraph 25 continues to cause confusion and frustration.

The EITs will probably remain disgruntled both due to the procedural treatment as well as what is likely to be interpreted as a defeat with the second commitment period rules. What comes to consensus, the strong majority of the Parties to the Kyoto Protocol refusing to allocate new surplus as well as wanting to limit the use of the first commitment period surplus was considered as sufficient to take a decision seen as unfavourable by the EITs.

The certain casualties of the Amendment are the‘surplusless’ new entrants, Belarus and Kazakhstan, who have good grounds to adjust their commitments or withdraw from the second commitment period as their burdens became dramatically heavier. Given their low standards of living in comparison to many non-Annex I countries that escape such burdens(Qatar, South Korea, Singapore to mention a few), it is difficult to see how this would be a fair outcome. Russia is a more political actor and opted out even before the potential economic burden on the country was established in Doha. For Ukraine, the dealcould be considered either very good or very bad, depending on the interpretation of the use of the previous period surplus reserve.

From wider perspective, it is certainly positive that the long-term dispute on the surplus is now off the table. After all, given the Kyoto Protocol’s insignificant impact on the atmosphere, the debate has been rather ideological than practical. Hopefully time and resources can now be concentrated on negotiating an environmentally robust global agreement to enter into force in 2020.

Numbers excluding land-use, land-use change and forestry
Based on 2008 -10 real data and the assumption of 2011-12 emissions to be on 2010 level.
In the negotiations: Earth Negotiations Bulletin Vol. 12, No 567, Summary of the Doha Climate Change Conference: 26 November – 8 December 2012, 11 December 2012. In the analysis: Vieweg, Marion; Schaeffer, Michiel; Chen, Claudine; Gutschow, Johannes; Hare, Bill and Rocha, Marcia(2012). Hot Topic: AAU Surplus. Political Implications of the long-term effect of surplus from the first and second Kyoto period. Working Paper 2, Climate Analytics, Berlin. Korppoo, Anna and Thomas Spencer (2009).‘The Dead Souls: How to Deal with the Russia Surplus?’ FIIA Briefing Paper 39, 4 September 2009.
Parnell, John (2012). Russian Government offers faint hope of Kyoto 2 participation, RTCC 16 November 2012. Available at
King, Ed (2012). UN climate chief dismisses Russia ‘hot-air’ protest in Doha. RTCC 10 December 2012.
Катарская конференция по климату не удалась, отмечают российские представители. [Qatar climate conference failed, Russian officials say.] ITAR TASS 13 December 2012. Available at
Bolivia’s opposition was similarly ignored in Cancun in 2011; this time the group of countries expressing opposition can be considered larger as Russia was representing also Ukraine, Kazakhstan and Belarus.
Doha Amendment to the Kyoto Protocol.
average annual emissions of 2008-2020 i.e. 390 Mt deducted from the country’s annual commitment level i.e. 744 Mt
regardless of their carbon market activities during the first commitment period
Allan, Andrew & Kruppa, Marton (2012). Belarus negotiator hints at Kyoto exit, says others could follow. Reuters 10 December 2012. Available at
Based on → GHG data
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