Analysis of Green Investment Scheme for Energy Efficiency Measures in Latvia

Abstract

Latvia has the unprecedented opportunity to be the first country in the world to sell assigned amount units under Article 17 of the Kyoto Protocol – International Emissions Trading. Negotiations are ongoing with a number of buyers for pilot transactions with a cumulative volume of 8–10 million assigned amount units (AAUs) out of 40 million AAUs earmarked by Latvia’s government for total sales. Signed agreements are expected in 2009. Latvia’s government has indicated their interest in exploring options to sell the full volume of available AAUs by the end of 2012. The main goal of these activities is “greening” – increasing the market value of Latvia’s AAUs and alleviating buyers’ concerns regarding the environmental integrity of transactions. The Latvian government has agreed to “green” the transaction and channel the revenues to projects or programmes with environmental benefits. The Ministry of Environment, representing the government, has indicated its interest to buyers in pursuing greening during the pilot transaction in the following areas: biomass and biogas heating, energy efficiency improvements in public sector buildings and residential buildings. Pilot transactions will be followed by other transactions for other renewable energy sources. All activities are covered by Latvia’s Climate Change Financial Instrument (CCFI). This article focuses solely on programmes related to energy efficiency in buildings.