As a part of its efforts towards compliance with international obligations in climate sphere, Ukrainian government has recently developed the Draft Law “On the Bases of State Climate Policy”, aimed at introduction of systemic approach to combating climate change and adaptation to it. On May, 31, the draft law was registered in the Parliament as Draft Law no. 11310. A brief overview of the main provisions of the draft law — in a review by Pragma Consulting Group, Partner of the Ukrainian Bar Association’s GR Committee.

Setting long-term climate goals

Primary aim of development of the Draft Law “On the Bases of State Climate Policy” was to set up long-term climate goals and develop the procedures for setting up mid-term goals.

Long-term goals of state climate policy are set up in the paragraph 3 of Article 4 and are generally corresponding to the climate goals, set in the Paris Agreement and European Climate Law:

• achieving climate neutrality — without setting the timeframes for achieving this goal, unlike European Climate Law, which prescribes that such a goal should be achieved by 2050; as an intermediary goal, the draft law suggests that net greenhouse emissions must be reduced by at least 65 % compared to 1990 levels by 2030 (while European Climate Law sets reduction by at least 55% by 2030);
• holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels through decrease of the greenhouse emission and increasing their absorption, as prescribed in the Article 2 of the Paris Agreement;
• increasing resilience and decreasing risks related to the climate change, including those in the spheres of public health, through making efforts aimed at adaptation to the climate change according to the Article 7 of the Paris Agreement.

Paragraph 5 of the same article prescribe that the mid-term climate goals are to be set in the Long-term climate strategy that should be developed and approved as a part of implementation of this law, and should include following indicators:

• ensuring reduction of emission and increase of absorption of the greenhouse gases in various spheres compared to reference year;
• increasing the share of renewable sources of energy and alternative types of fuel in energy balance of Ukraine;
• decreasing energy value and carbon value of the GDP;
• development of eco-friendly and low-carbon technologies and infrastructure, as well as introduction of nature-oriented in various sectors of economy;
• increasing adaptation capacity to unfavorable climate changes, as well as supporting low-carbon development of Ukraine and resilience to the climate change in the way that does not adversely affect production of food;
• increasing the amount of the greenhouse gases that are removed from the atmosphere;
• other indicators.

Instruments for ensuring low-carbon development

The draft law provides a number of instruments that are aimed at promoting low-carbon development of Ukraine through stimulation of use of greener technologies. In particular, the draft law includes following types of mechanisms:

• fiscal mechanisms, which as of now include exclusively carbon tax for domestic producers;
• market mechanisms, which will be based on introduction of the emission trading system (ETS);
• organizational and economic mechanisms for promotion of low-carbon development, which comprise instruments aiming at promotion of green development and creation of green workplaces, increasing requirements regarding energy efficiency;
• state support schemes for businesses to support their efforts aimed at decreasing greenhouse gases emission and adaptation to the climate change;
• instruments of stimulation of population to participate in prevention of climate change and adaptation to it.

The draft law also provides the list of possible mechanisms for financing the measures aimed at prevention of climate change and adaptation to it, including investments from budgets of different levels, accessible loans, grants, public-private partnerships and insurance of military risks.

Monitoring achievement of climate goals

In order to ensure the monitoring and evaluation of the efficiency of state climate policies, annual reporting is envisaged by the draft law. The central executive authorities responsible for various sectors of economy annually provide the information on the measures taken with aim of prevention of the climate change and adaptation to it to the Cabinet of Ministers of Ukraine. Ministry of Environment of Ukraine, in its turn, monitors such measures, and Scientific-Expert Council on Climate Change evaluates the state policies on prevention of climate change and adaptation to it.

Results of the monitoring and evaluation must be further included into the annual report of the Cabinet of Ministers of Ukraine regarding execution of the Program of Activities of the Government. In case when certain state policy is being evaluated as non-compliant with the goals of the state climate policy, the Cabinet of Ministers takes measures aimed at alignment of such policy with climate goals. Also, all draft legislative acts are evaluated by the Cabinet of Ministers in terms of their compliance with the goals of the state climate policy.

Prepared by:

Alyona Shulima, Partner of Pragma Consulting Group, Ph.D.

Olena Yaliieva, Counsel of Pragma Consulting Group

DISCLAIMER: The general information provided in this Newsletter is not legal advice, cannot be cited as legal authority, and cannot replace the advice of a lawyer who has reviewed the facts of your case. The information provided is intended to be accurate as of the date of publication, but please be aware that laws are constantly changing.