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Green Investment Schemes

Green Investment Schemes promote the trade of “greened” greenhouse gas emission allowances between countries by channeling trade revenues into environmental projects. Climate Focus staff are among the leading experts in designing these programs.

The Kyoto Protocol allocated emission allowances, “Assigned Amount Units” (AAUs), to industrialised countries on the basis of their past emissions. Due to the economic contraction in the 1990s after the collapse of the communist economies, most Central and Eastern European countries now have a significant surplus of AAUs, which they can sell to countries whose emissions exceed their targets. Central and Eastern European countries have the potential to raise billions of Euros by selling their surplus.

Countries can choose to reinvest their proceeds into measures that further reduce their emissions, thereby freeing up additional AAUs, or to support measures with other environmental benefits. Green Investment Schemes (GISs) offer a way to earmark AAU revenues for environment-related activities. Because potential buyers have expressed a clear preference for “greened” AAUs, countries can increase the value of their AAUs by establishing a credible GIS.

activities and projects

Ukraine
At the request of the World Bank and the Ukrainian Ministry of Environmental Protection, Climate Focus prepared a comprehensive study evaluating the prospects of Ukraine implementing a GIS. The assignment included evaluating various transaction structures and financial schemes, reviewing the legal requirements of implementing an AAU-backed GIS in Ukraine, and surveying the potential to green various sectors of the Ukrainian economy. The assignment was conducted in cooperation with our partner Vertis Environmental Finance.

Bulgaria
For many years Climate Focus staff have been providing advice to the World Bank and the Government of Bulgaria on establishing a GIS, a concept which Bulgaria pioneered. Climate Focus participates in an ongoing dialogue to establish a GIS in Bulgaria.