Implementation of the Kyoto Protocol without Russian participation

All Annex B parties but Russia, Australia and USA, have ratified the Kyoto Protocol so far. It is still an open question whether Russia will ratify and secure that the Protocol enters into force. This paper therefore analyzes consequences of some proposed alternatives if the Russians decide not to ratify. The paper focuses on two cases where a limited number of the remaining Annex B parties respond to Russian withdrawal by the establishment of a new "mini-Kyoto" agreement whereby these parties commit themselves to the emission caps, the rules for emissions trading, compliance etc. set out in the Protocol. Environmentally, implementation of the Kyoto Protocol without participation from Russia and Ukraine is obviously superior to implementation with Russian/Ukrainian participation, due to the implied withdrawal of hot air based permits from the market. Implementation of the Kyoto Protocol without Russian/Ukrainian participation will, furthermore, imply higher costs to the remaining countries. This paper provides estimates of the permit price and environmental benefits that are likely if the proposed "mini-Kyoto" agreements are implemented.