Kyoto and Estonia's Electric Cars

The most disappointing thing in recent years, in Estonian politics and life, is that we seem to have lost our edge; our willingness to go for awesome projects that might be very improbable and would not work anywhere else, but end up working really well here. The Tiger Leap program, the free wifi, the e-voting... How long has it been since there was a truly inspirational national project? The ultra-broadband buildout is the closest thing in the last few years, but that's not as obvious or immediate.

Now, it seems there is one. 

For years, Estonia has been supplementing its budget income by selling emission quotas under the EU and Kyoto Protocol regulations. Like fishing rights, this is a non-obvious but fairly serious revenue stream. The quotas are apparently assigned on a comparison basis, with 1990 as the baseline. In 1990, Estonia was still part of the Soviet Union, and all that Soviet industry was busy belching out pollution; most of it was not viable in a free-market economy and went bankrupt, so we are actually allowed to pollute a lot more than we do. The difference can be sold to countries which pollute more than they are allowed to, for cash... or other benefits.

Under the Kyoto Protocol, Estonia's initial assigned quota was around 196 million AAU per year; this is the emission level that was recorded for 1990. (One AAU is equal to one metric ton of carbon dioxide, although it's actually a mathematical calculation with conversion factors for other types of greenhouse gases - CO2 is not the only thing that industries emit.) In the period between 2007 and 2012, Estonia was subject to the general EU commitment to reduce that emission level by 8%, so it could claim no more than 180 million AAU per year. If companies in Estonia emit less CO2 than that, the leftover amounts can be traded with companies in other countries, and added to that country's allocation.

This commitment period is ending next year, and Estonia apparently has AAUs to spare, because instead of just selling them for cash, it will hand over 10 million AAU to Japan's Mitsubishi Corporation. In return, Mitsubishi will establish an electric car infrastructure in Estonia. The country's cities and major motorways will be covered by a network of 250 charging stations, and the state will receive 507 Mitsubishi i-MIEV electric cars, which will be used by social workers.

Besides that, the sale of additional AAUs will be used to finance a subsidy for an additional 500 or so vehicles for private buyers. Those cars will not be free, but they will be a lot cheaper than market price, and buyers won't have to stick to the Mitsubishis - any electric car certified for use in the EU will be eligible.

To receive the subsidy, the buyers will have to commit to purchasing sustainable energy certificates. This is a way of ensuring that the electric cars are powered by green electricity. The cars themselves can be charged from any station in the country-wide network, or indeed any power socket; the certificate is a way of ensuring that for each fossil-fueled kilowatt-hour that the electric car takes out of the grid, a green-fueled kilowatt-hour is put back into the grid.

Buyers of non-subsidized electric cars will, of course, be allowed to use the country-wide charging infrastructure, and will not be forced to purchase the green-energy certificates. Meanwhile, the subsidized electric cars will effectively consume no fossil fuels at all - apart, of course, from the energy used to build the cars in the first place. It's also worth remembering that all of this is financed by allowing a Japanese corporation to spew out greenhouse gases from its own factories.

But it's still an amazingly elegant and forward-thinking deal, one which will make Estonia one of the world's leading countries in electric-vehicle infrastructure. And the availability of charging stations is the real key to making electric cars viable.