TO THE SEMINAR ON THE SUBJECT “AUDIT OF ADAPTATION”

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Today’s seminar proves our especial attention to the matter of audit concerned with adaptation to the climate change and evidences our need in sharing the experience and knowledge in this subject.

The problem of the present anthropogenic climate change, dramatic within the last 15 years, is essentially global. Such local consequences as heat, drought, storms, floods depend on concentration of greenhouse gases in the atmosphere as a whole rather than in the space over a particular country.

Understanding of the need in common efforts is essential nowadays.

The Climate Doctrine of the Russian Federation is approved by the President of Russia on 17 December 2009. This Climate Doctrine is a principal document in conducting the state policy of Russia concerning issues connected with possible global and regional climate changes and consequences thereof.

The objective of the audit of adaptation to the climate change should be, in our opinion, estimation of the effectiveness of the policy conducted concerning the climate issues. The following should be considered in pursue of this objective:

- programs dedicated to research in the field of adaptation to the climate change;

- performance of the legal basis and mechanisms of governmental regulations concerned with reducing the anthropogenic effect on the global climate system.

The Accounts Chamber of the Russian Federation is consistent in this activity. In 2009, a financial audit of application of the public funds allocated for ensuring the obligations of the Russian Federation under the Kyoto Protocol to the United Nations Framework Convention on Climate Change was conducted. This audit covered the following questions:

1. Analysis of the documents adopted in pursue of fulfillment of the obligations under the Kyoto Protocol and the United Nations Framework Convention on Climate Change.

2. Execution of provisions of regulations of the Russian Federation pursuant to fulfillment of the obligations under the Kyoto Protocol (industrial regulation of emission of greenhouse gases). Measures to increase the effectiveness of the energy application in relevant sectors of national economy. Development of the strategy for prevention of hazardous climate changes and their negative consequences for the period after 2012.

3. Analysis of application of the money, including the funds of the federal budget allocated for fulfillment of obligations of the Russian Federation to develop preventive measures with the aim of the economy adaptation to climate changes.

4. Effectiveness of application of the funds of the federal budget provided by the federal bodies of executive power  in specified spheres of activities to ensure the fulfillment of obligations of the Russian Federation under the United Nations Framework Convention on Climate Change and the Kyoto Protocol.

Objects of the activity are bodies of executive power, public institutions for ecology and environmental management issues.

Subjects for the audit of the climate change are: regulations and other documents adopted in the field of climate change; information obtained by the Accounts Chamber following the requests from corresponding ministries, departments and other organizations; financial statements, statistical and other data and indicators reflecting the participation of the Russian Federation in the Kyoto Protocol to the United Nations Framework Convention on Climate Change; reports of limited scope inspections and audits; opinion of the budget draft for the next year, data of the operative audit, accounting and statistic materials about the activities of objects liable to audit.

The audit performed by the Accounts Chamber in 2009 revealed the following:

The best portion of the “Kyoto” emissions in the Russian Federation – over 80% - is made by emission in so called segment of “Energy industry”. All emissions that belong to them are associated with exploitation, storage, transportation and use of mineral fuels – coal, oil and gas – and their products, as well as losses and leaks of fuel into the atmosphere. The second place takes the emission involved with agriculture (farms and agricultural grounds), the third place takes the emission involved with industrial technologies and utilization of industrial products. Worthy of note is the situation in the agricultural sector where emissions keep practically stable after 1990-1998. Such a situation is conditioned by no growth in cattle stock, which is a substantial source of methane, and high prices for mineral fertilizers which limits their application and, consequently, emissions by agricultural grounds. Since early 1999, emissions kept to increase in connection with the growth in production. In 2006, in connection with the growth in consumption of energy resources, total level of emissions in the Russian Federation amounted to 65.8% of the base level of 1990. According to the preliminary estimates by experts, the growth of emissions continued in 2008 as well, but in 2009 emissions declined due to the economic crisis.

With upgrade of production facilities of the Russian Federation industry and implementation of advanced effective technologies in production and energy consumption, emission of greenhouse gases will not exceed the base level till 2020.

Subject to the obligations assumed, all the countries-participants have to develop own legal environment for regulation of emission of greenhouse gases, including that as provision for performance of the national market of carbon. Appropriate documents for preparation to fulfillment of obligations of the Russian Federation were adopted after ratification of the Kyoto Protocol in Russia.

The national system was created in 2006 for estimation of anthropogenic emissions from sources and absorption by absorbers of greenhouse gases. Management of the system and submission of the National Cadastre and other requisite information in compliance with the Kyoto Protocol are assigned to the body of executive power (Rosgidromet of Russia). The National Cadastre of anthropogenic emissions of greenhouse gases within the period from 1990 to 2007 had been annually submitted to the Secretariat of the UNFCCC.

Moreover, there was established that financial support of performance of the estimation system was provided on account of the funds of the federal budget (see Table 1).

 

                                                                                                 Таблица1

Obligations of the Russian Federation under the Kyoto Protocol:

1. Stabilization of anthropogenic emission of greenhouse gases by 2000 at a level of their emission in 1990;

2. Development, periodic revision, publication of the National Cadastre of anthropogenic emission from sources and absorption by scavengers of all greenhouse gases;

3. Formulation, realization, edition and regular update of national and regional programs covering measures for reduction of emission of greenhouse gases;

4. Submission of the national messages to the Conference of the parties through the Secretariat of the UN FCCC on a regular basis (once in three years)

 

For the quote trading, there was adopted a concept of preservation of a certain fraction of the quota for the effective period of the obligations (2008-2012 inclusive). It is meant that prior to the beginning of 2013, a country can sell either all “clear” quota assigned per the last inventory data (presumably of 2007) or 10 percent of the total country emission in 1990 (whichever is greater).

Actually such approach allowed for trading, beginning from 2008, as much quota as the country’s economical development and the global market condition would make possible.

Principally important is that all the quota (except some limitations on “forestry” and international projects) may be accrued and transferred to the next period of obligations. This particular fact enables Russia to regulate the market by limiting the quota offer and accruing them for the next period of 2013 – 2017 when emissions by sources in the Russian Federation in aggregate might exceed the top level under the Kyoto Protocol.

By opinion of most Russian experts, the implementation of the Kyoto Protocol upon its ratification in Russia was relatively smooth. As for development of follow-up agreements, they incur obligations to reduce emission of greenhouse gases in the next periods. This will set under pressure the amount of consumption of mineral fuel types, in particular coal, oil and gas.

In July 2009 in Italy at the leaders’ summit of eight industrial countries, Russia stated in its declaration that emission of greenhouse gases in the Russian Federation in 2020 would come up to maximum 85-90 percent of emission of 1990 and will not exceed 50 percent of the 1990 level by 2050. In particular, it was declared that Russia would reduce own emissions within 30 years (1990 through 2020) by 10-15 percent or by 30 billion tons of carbon.

The expected climate changes will eventually affect lives of people, condition of flora and fauna in all the planetary regions and will present a notable jeopardy to wellbeing of population in some of them and to the progress steadiness. 

The specified factors defined registration of climate changes as one of key long-term factors of security of the Russian Federation and set forth the problem of global climate change into priorities of the Russian Federation policy.

One of primary tasks of Russia’s policy in terms of climate is development and implementation of operating and long-term measures for adaptation to climate changes. In this connection the most important components in development and planning of audit of adaptation to climate changes are the following risk assessments:

vulnerability to unfavorable consequences of climate changes and risks of losses incurred by them;

possibility of obtaining profit involved with favorable consequences of climate changes;

costly characteristic, effectiveness (including economic one) and practical feasibility of relevant adaptation measures;

potential of the adaptation with account of economic, social and other factors critical for the state, economy sectors, population and individual social groups.

Concerned with the priorities of the Russia’s climate policy is also the anticipatory adaptation to climate change consequences.

For this purpose it was planned to consider the effectiveness of the measures within the scope of audit of the adaptation ensuring the following:

- increase in energy effectiveness in all economy sectors;

 - improvement of use of renewable and alternative energy sources;

 - smoothing the market disproportions, implementation of financial and tax policies stimulating reduction of anthropogenic emissions of greenhouse gases;

-protection and improvement of quality of absorbers and accumulators of greenhouse gases including regional run of forestry, planting and reforestation on regular basis.

 When planning the audit of adaptation to climate changes, it was essential to define the issues of the audit program, and the following might be the primary ones:

- analysis and assessment of the past and present condition of the climate system;

 -evaluation of the factors of anthropogenic activity that affect climate;

-prognosis of possible climate changes and their effect on the quality of living for population of the Russian Federation and other Earth regions;

- assessment of the degree of robustness versus vulnerability of ecologic systems, economy, population, public institutions and country infrastructure in terms of climate changes and adaptation capabilities available;

- assessment of the facilities for alleviation of anthropogenic effect on climate ;

-assessment of negative versus positive consequences of the expected climate changes;

The following consequences of the expected climate changes in the Russian Federation fall under negative ones:

higher health risks (growth of the morbidity and death rate) for some social groups of the population;

growth of recurrence, intensity and duration of drought in some regions versus extreme precipitation, floods, hazardous to agriculture soil overwatering in other regions;

higher fire risks in forest areas;

degradation of the pernafrost in the northern regions with damage to buildings and utilities;

ecologic imbalance, including supersession of some biological species by other ones;

expansion of inflectional and parasitic deceases;

growth of power supply costs for air-conditioning in summer for the best part of urban areas.

The possible consequences of the expected climate changes positive for the Russian Federation which are linked with significant potential of effective industrial and regional economic progress are as follows:

reduction in energy consumption in heating season:

improvement of the ice situation and, consequently, conditions for cargo transportation in the arctic seas, easier approach to arctic shelves and their development;

structural improvement and expansion of the plant-production area and higher effectiveness of the cattle-production (provided some additional conditions are met and certain measures are undertaken);

higher productivity of boreal forests.

This set of questions linked with climate changes was taken in consideration during conduct of the audit of adaptation.

According to the above, a decision was made to conduct the audit of adaptation to climate changes within the framework of cooperation of supreme audit institutions of European countries for environmental audit in 2010; in 2012,we conducted the audit of effectiveness of governmental regulation and application of the public funds in 2008-2010 allocated to arrangements for preservation and restoration of fertility of grounds and agricultural landscapes and implementation of measures for adaptation and alleviation of anthropogenic effect on climate.

To conduct the  performance audit,  two objectives were defined, questions and criteria for performance assessment were formulated and coordinated with the audited entities.

Objective 1. To analyze implementation of governmental measures in terms of climate changes and consequences thereof for Russian agriculture.

Objective 2. To assess productivity of arrangements aimed at adaptation of Russian agriculture to climate changes.

During the audit we analyzed implementation of governmental measures in terms of climate changes and consequences thereof for agriculture, productivity of arrangements aimed at adaptation of Russian agriculture to climate changes and assessed their effectiveness based on the criteria.

Meanwhile, this Federal Targeted Program “Fertility” does not cover the substantial part of the existing problems with crop farming, including prevention from effects of water and wind erosion, ground bogginess and others with its amount of funds and arrangements. Introduction of fertilizers is performed in amounts not exceeding 30% of science-proven demand. Works on improvement of saline and alkaline lands which occupy up to 13% of total agricultural area are practically stopped (100 to 500 ha per year).

The need is really acute for the Ministry of Agriculture of Russia to develop new formats and channels for implementation of effective governmental regulation of arrangements for preservation and restoration of fertility of farming lands and agricultural landscapes.

One of important factors affecting the final outcome of farm-producers is reliable agricultural weather forecast.
To improve the forecast quality, the project “Modernization and Technical Re-Equipment of Institutions and Organizations of the Rosgidromet” has been implemented with application of the federal budget funds and loan from the International Bank for Reconstruction and Development. The loan amounts to 80 million USD. Amount of co-funding afforded on the Russian part was increased in progress of the project implementation up to 100.00 million USD.

By the Rosgidrimet assessment, the forecast quality significantly increased and approached the global leading centers level in some parameters, validity of daily and decade forecasts makes up to 95%, validity of medium-term forecasts (for the vegetation season from April through September) is 70 percent. Meanwhile, the Ministry of Agriculture of Russia affirms that information is suitable in quantity and quality for making managerial solutions and estimates own error of prognosis of agricultural production outcome to be 5-6 percent.

With mutual positive qualification and high self-rating of activities of these departments, a trend of growth of damages to agriculture by unfavorable climate conditions persists.

According to the data from the Ministry of Agriculture of Russia, the total damage to agriculture in the Russian Federation due to unfavorable climate phenomena within the last 10 years increased to be almost by three times and within the period of 2008 through 2010 it amounted to 89.8 billion rubles, including 41.8 billion rubles in 2010. Almost two thirds of the damage is covered on account of funds of the federal and regional budgets. Failure to undertake measures for adaptation of agriculture to climate changes might result in higher risks.

With consideration for two scenarios of climate change: arid warming (with water shortage) and humid (with excessive watering), significant growth of plant-production productivity is expected to occur in regions above 50° Northern latitude (within entire area of the Russian Federation except the South).

However, some productivity fall is expected in the Volga region, Northern Caucuses and in Siberia with humid warming and more significant yield fall in southern regions is expected with arid warming. Substantial investments in agricultural economy sector will be required for damage compensation.

Such a situation evidences the need in development of an optimum strategy of adaptation and diversification of agriculture economy, for its steady progress under the climate change, and in arrangements for adaptation and alleviation of effect on climate.

The following is established based on the audit results:

- with substantial sums of the federal budget funds and the international loan channeled for upgrading and technical re-equipment of the Rosgidromet institutions and organizations, no notable improvement is seen in the forecast validity, especially the medium-term ones;

- failure to make timely arrangements for adaptation of agricultural industry to climate change will entail not only jeopardy of increase in material losses but also risks of decrease in competitiveness of Russian agricultural complex and in support of food security.