PRESSING THE SURPLUS RESET BUTTON

The paper addresses the 'windfall' emissions permits (AAUs) held by countries in Central and Eastern Europe (CEE) and the Former Soviet Union (FSU), which threaten the environmental integrity of the Kyoto Protocol. It analyzes the conflicting positions of Russia and the EU, noting that Russia views its surplus as a hedge against future emissions growth. To resolve this, the authors propose creating a non-tradable strategic compliance reserve for first-period surpluses and implementing 'optimized trading' for second-period over-allocations. This approach aims to maintain carbon market prices and recognize the 'early action' of transition economies while preventing the market saturation that would occur if all surpluses were traded.

• Countries in Central and Eastern Europe (CEE) and the Former Soviet Union (FSU) hold billions of surplus emissions permits (AAUs) due to economic collapse after 1990, which could weaken developed country emissions targets by 6-12% if traded.
• Russia's position is contradictory: it opposes the continuation of the Kyoto Protocol while simultaneously advocating for the recognition of overachievement of targets and the operational elements of the protocol in any new agreement.
• The EU lacks a common position on the carry-over of AAUs because CEE Member States oppose EU-level solutions and instead align with Russia's position.
• The authors propose a non-tradable strategic compliance reserve for first-period surpluses to address Russian concerns that emissions will grow post-2012, effectively using the surplus as a hedge.
• Full banking and trading of surpluses in the second commitment period could crash the global carbon price to 5 USD/ton; a strategic reserve or optimized banking would result in higher prices and revenues.
• Russia is likely to experience another over-allocation in the second commitment period (2013-2020), potentially exacerbated by forest management RMUs estimated at 330 Mt per year.

APA

Korppoo, A., & Spencer, T. (2010). PRESSING THE SURPLUS RESET BUTTON. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/report-aau-korppoo.pdf

Chicago

Korppoo, Anna, and Thomas Spencer. PRESSING THE SURPLUS RESET BUTTON. Climate Strategies, 2010. https://climatestrategies.org/wp-content/uploads/2014/11/report-aau-korppoo.pdf.

Wikipedia

{{cite report |last1=Korppoo |first1=Anna |last2=Spencer |first2=Thomas |title=PRESSING THE SURPLUS RESET BUTTON |publisher=Climate Strategies |date=29 July 2010 |url=https://climatestrategies.org/wp-content/uploads/2014/11/report-aau-korppoo.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{korppoo2010pressing, author = {Korppoo, Anna and Spencer, Thomas}, title = {{PRESSING THE SURPLUS RESET BUTTON}}, institution = {Climate Strategies}, year = {2010}, month = jul, url = {https://climatestrategies.org/wp-content/uploads/2014/11/report-aau-korppoo.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }