Paris Agreement mechanisms: are there chances for Russian oil companies?

UDK: 622.276
DOI: 10.24887/0028-2448-2021-06-16-20
Key words: Paris Agreement, UN Framework Convention on Climate Change, Kyoto Protocol, oil industry, flexible mechanisms, greenhouse gas emissions reduction
Authors: S.A. Roginko (Institute of Europe of RAS, RF, Moscow; Financial University under the Government of the Russian Federation, RF, Moscow)

The article deals with the market mechanisms within the framework of the UN Paris Climate Agreement and the chances for the Russian oil industry to participate in them. The author traces the genesis of the new mechanisms and their connection with the market mechanisms of the Kyoto Protocol already known to Russian oil companies. The mechanisms of the Paris Agreement are evaluated in terms of the legitimacy of the types of emissions reductions intended for trade in the new world market. The potential reductions that Russian oil companies can deliver to the market are compared with those from competing countries, especially developing countries, in terms of ensuring global net emissions reductions. The details of the negotiation process on development of the modalities of Article 6 of the Paris Agreement are discussed in detail, including the mechanism of paragraph 4 of this article, which forms a system for generating new types of reductions of project origin and schemes for their introduction to the global carbon market. The positions of the parties on the basic parameters of the new project mechanism are analyzed, including approaches to determining the baseline, the duration of the project period, restrictions on the transfer of carbon units, their banking and discounting, as well as possible requirements for the countries participating in the new mechanism. Proposals to add to the list of tradable instruments such as "additional benefits of adaptation", national action plans and economic diversification, and so-called "emissions avoidance" are criticized. A description of the process for the final approval of the modalities of the new mechanism is given. Special attention is paid to forecasting the volume of future demand for emission reductions under the new mechanisms from the leading potential buyers-the EU, the United States, and Japan. Recommendations are given for Russian oil companies on the tactics of their possible actions to promote their cuts to the new world market and to hedge the corresponding risks.


1. Roginko S., Den'gi iz vozdukha (Money out of thin air), URL:

2. Paris Agreement, URL:

3. State of the Union Address by President von der Leyen at the European Parliament Plenary, URL: ov/SPEECH_20_1655

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