Based on the materials of the seminar  "Women's Role in Addressing Problems of Persistent Organic Pollutants"
Moscow, May 15-16, 2001

© Eco-Accord Centre

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ANALYTICAL MEMO

ON POTENTIAL ECONOMIC IMPLICATIONS OF FULFILMENT OF COMMITMENTS OF THE RUSSIAN FEDERATION, ASSOCIATED WITH STOCKHOLM CONVENTION ON PERSISTENT ORGANIC POLLUTANTS

S.N.Kuraiev, the Centre for Development and Implementation of Projects of Technical Assistance

   V.G.Sokolovsky, the Ministry for Natural Resources of the Russian Federation

In December 2000, within the framework of the Environmental Program of the United Nations (UNEP), the Draft Convention on Persistent Organic Pollutants (POPs) was developed (known as Stockholm Convention in reference to the city, selected for its endorsement and signature).

On May 23, 2001, in the course of the Conference of Authorised Representatives for Endorsement and Signature of Stockholm Convention on POPs, representatives of 110 countries signed the Final Act of the Conference, while the Convention itself was signed on behalf of 92 countries. Besides that, the representative of Canada submitted also the ratification note of the Government of Canada.

Five CIS countries were among the delegations, that signed the Convention - Armenia, Georgia, Kazakhstan, Moldova and Ukraine. The representative of the Russian Federation signed only the Final Act, due to unsettled issues, associated with reaching agreement on signature of the Convention.

Below, the most substantial aspects and details of Stockholm Convention are described, pertaining to economic implications of its signature and subsequent ratification.

First of all, it is necessary to note, that the fact of signature of the Convention by a country does not entail any legal and economic consequences - it is a declaration of the country's intentions for co-operation in addressing this relevant problem. A country, that has signed the Convention, will bear responsibility for non-compliance with provisions of the Convention only after ratification of the Convention, and provided that the Convention is operational, as a result of its ratification by at least fifty countries.

A country, that failed to sign the Convention on the date of its endorsement or till May 22, 2002, cannot be considered eligible for provision of technical and finance assistance for developing countries and economies in transition, stipulated by the Convention itself and Resolution "On Capacity Building and Assistance Network".

If a country delays its procedure of signature of the Convention, it will have less chances for a rather substantial assistance. It would be enough to remind, that the chief managers of the Global Environmental Facility (GEF) stated in the course of Stockholm Conference, that GEF will immediately allocate up to $500 thousand for development of national action plans for implementation of the Convention to each of 12 developing countries and economies in transition, which have signed the Convention.

According to the Convention, persistent organic pollutants are defined as substances, that possess toxic properties, resist degradation, bioaccumulate and are transported, through air, water and migratory species, across international boundaries and deposited far from their place of release, where they accumulate in terrestrial and aquatic ecosystems.

Preamble of the Convention emphasises the need to take global actions to address POPs problems and recognises that the Arctic ecosystems and indigenous communities are particularly at risk because of the biomagnification of persistent organic pollutants and that contamination of their traditional foods is a public health issue.

The Convention reaffirms that according to the United Nations Charter and principles of international law, sovereign states bear the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment or development of other States or of areas beyond the limits of national jurisdiction.

The main responsibilities of the Convention Parties in the sphere of management of persistent organic pollutants are defined by Article 3 "Measures to reduce or eliminate releases". The Article stipulates implementation of measures for elimination and use of the following chemical compounds: aldrin, chlordane, dieldrin, DDT, endrin, heptachlor, hexachlorobenzene, mirex, toxaphene, PCBs. In the case of Russia, only provisions on HCB, DDT and PCBs are of some relevance, because other chemical compounds (mainly pesticides) are not produced and used in the Russian Federation.

Due to the insistence of the Ministry of Defence of Russia on continuous use of hexachlorobenzene, the Russian Federation registered (by written notification of the Secretariat) the specific exemption for production and use of hexachlorobenzene as an intermediate product.

Due to the fact, the Public Health Ministry of Russia insists on the need to provide a possibility for use of DDT as insecticide against vectors of malaria and encephalitis, the Russian Party incorporated the entry on further production and use of DDT into the Register of Specific Exemptions.

As for unintentional generation and releases of PCDD/PCDF, HCB and PCBs, the Convention stipulates implementation of measures for reduction of overall releases of these POPs from anthropogenic sources for their continuous minimisation, and elimination, if feasible.

The Convention does not stipulate specific targets and timeframes for reduction of unintentional POP generation and releases. The task should be accomplished in the process of replacement of obsolete and outdated production equipment and switching to new technologies.

In the light of Stockholm Convention, the problem of polychlorinated biphenyls is almost the only problem, that pertains to the Russian Federation. The problem is associated with the following - In our country, PCBs were produced from 1939 to 1993, however, at the time being, power supply networks of fuel and power industries, facilities of ferrous and non-ferrous metallurgy, chemical and petrochemical facilities, paper mills, engineering facilities, etc. incorporate 7200 transformers and about 360000 capacitors, containing PCBs as dielectrics. According to results of inventory works, which were carried out in 1999-2000, overall amount of PCBs, contained in electric equipment and installations was estimated as 30 thousand tons. Replacement of PCBs by environment-friendly dielectrics (as old transformers and capacitors will be decommissioned), according to Russian JS Company "United Power Systems of Russia" should be completed by 2025, while completion of elimination of PCBs would require three additional years. These deadlines are in full compliance with the terms, stipulated by the Convention.

In practical terms, the problem of PCBs for our country is associated with the need to resolve 4 major problems:

1. Development and production of an alternative dielectric to replace PCBs

Production of PCBs was cancelled in 1993. At production association "Orgsteklo" in Dzerzhinsk (Nizhny Novgorod Oblast) production installations were completely disassembled, while at production association "Orgsintez" in Novomoskovsk (Tula Oblast) installations were tailored to production of new products. Since 1993, replacement of obsolete transformers and capacitors was made with use of accumulated stocks or with use of alternative dielectrics of "Middle" brand (UK, etc.). In late 1980-s - early 1990s, domestic environment-friendly dielectrics AZI-3 and AZI-3H were developed and pilot batches of them were produced by "Altaikhimprom" facility. The new dielectrics were used in transformers and capacitors and successfully met requirements of pilot tests in electric engineering industry. Therefore, it would be wrong to associate economic assessments of termination or reorganisation of PCB-producing facilities, estimates of profit losses of specific producers and other estimates in connection with the switch to alternative dielectrics, with Stockholm Convention. It is necessary to stress, that the switch to alternative dielectrics, as it was made long ago in industrialised countries, should be made, based on interests of protection of the environment and health of citizens of Russia, in line with Law of the Russian Federation on Environmental Protection.

2. Cleaning of transformers from PCBs

According to Russian Science Centre "Applied Chemistry" and Research and Production Association "Petrokhimtekhgologia" (S.-Petersburg), that conducted pilot testing of installations for cleaning of transformers from PCBs, we may conclude that in order to clean 7200 transformers we would need to assemble 10 installations with unit cost of $500 thousand - i.e. $5 million totally. At operational costs of cleaning of an average transformer of $500, cleaning of 7200 transformers from 20000 thousand tons of PCBs would entail costs of $3.6 million - therefore, accounting of capital investments, overall expenses for cleaning of the transformers from PCBs within the period of 25 years would amount to $8.6 million

3. Destruction of PCBs after cleaning of the transformers.

It is obvious that destruction of PCBs should be made after completion of cleaning of the transformers, so parallel deployment of installations for cleaning and PCB destruction should be stipulated. In order to destroy 20000 tons of PCBs (additional 10000 tons are contained in capacitors) we would need 10 installation (with average unit cost up to $2 million), therefore, capital investments would reach $20 million. Operational costs of PCB-destroying installations, according to specifications of operational domestic high-temperature installations for PCB destruction in cyclone furnaces, reactors of rocket-engine type and other installations, are estimated to reach up to $1000 per 1 ton of PCBs destroyed (including transportation and storage costs), as a result, costs of destruction of 20000 tons of PCBs would reach about $20 million.

Therefore, total costs, associated with destruction of 20000 tons of PCBs from transformers, including capital investments into manufacturing of the installation, would reach $40 million

In the case of use of 10 installations for destruction of PCBs, unit loads would reach 2000 tons per unit for 25 years, i.e. only 80 tons per unit per year. Therefore, provided that maximal capacity of an installation reaches 1000 tons per year, it would be loaded for only 10% of its full capacity. So highl excessive capacity should be used for destruction of obsolete pesticides, pharmacological waste and other highly toxic industrial wastes. Provided sound organisation of collection and destruction of these wastes at the PCB-destruction installations, costs, directly associated with destruction of PCBs, could be reduced in several times.

4. Destruction of PCB-containing capacitors.

Destruction of PCB-containing capacitors would require to assemble 5 installations with unit costs up to $10 million (or $50 of total costs). According to preliminary estimates, operational costs, associated with destruction of about 360000 capacitors (with overall weight of 36 thousand tons) within 25 years, would amount to $10.8 million. Therefore, overall costs of assembling the installations and destroying the capacitors, would reach $60.8 million.

In the case of use of fewer installations, transportation costs would be higher (delivery of capacitors for destruction). In the case of 5 installations with overall capacity of 10000 tons per year, a unit load would reach only 5% of full capacity of an installation. Extra capacity could me used for destruction of banned and obsolete pesticides, hazardous industrial waste and other wastes, thus substantially reducing the costs, directly associated with destruction of capacitors.

Therefore, according to preliminary estimates, overall costs, associated with clearing of transformers from PCBs, destruction of PCBs and destruction of PCB-containing capacitors, would reach maximally $109.4 million for the period of 25-28 years, or, $4.0 - 4.5 million annually for all facilities of fuel and power industries, chemical and petrochemical industry, ferrous and non-ferrous metallurgy and paper and pulp industry.

Besides that, it is worth to note that implementation of four major actions to resolve the problem of PCBs, first and foremost is necessary in interests of health of citizens and environment of the Russian Federation, in line with Law of the Russian Federation on Environmental Protection. At the same time, addressing the problem of PCBs under Stockholm Convention, would serve as a tool to ensure fulfilment of international commitments of the country for prevention of environmental pollution under already approved agreements on Arctic Region and the Baltic Sea.

Russia is interested in participation of as many countries as possible in the Convention, due to several factors. Two first factors are associated with specific features of geographic conditions of Russia and behaviour of POPs in environmental media. Due to prevalence of eastward-directed air movements in the Northern hemisphere and associated air transport of pollutants (including POPs), the territory of Russia is under trans-boundary impacts of air pollutants, which are released in Western, Central and Eastern Europe, Northern Africa, Middle East and Asia.

It would be enough to note, that according to data of Joint Observation and Assessment of Long-range Air Pollution in Europe, in 1999, almost 1.4 million tons or 57% of total depositions of acidifying substances at the territory of Russia were of transboundary nature, i.e. came from foreign sources. Therefore, reduction of emissions of persistent organic pollutants in other countries, as required by Stockholm Convention, would result in reduction of transboundary pollution and accumulation of POPs in the Russian environment.

In contrast to acidifying air pollutants, POPs may be transported to higher distances. Many of these pollutants tend to migrate permanently from the South to the North, due to their high volatility and re-emission capacity, which decrease in line with decreasing temperature of air and land surface. The above factors suggest that 59.2% of the territory of Russia (permafrost areas), should be considered as the zone of accumulation of POPs, with all accompanying adverse consequences for residents and natural environment of Kola Peninsula, some part of Arkhangelsk Oblast, the Northern Urals, almost all Western and Eastern Siberia and the Far East.

The problems of environmental contamination of the Russian Federation by POPs is of latent nature, because, due to extremely high costs of measurements of POPs' levels in environmental media, the State Committee for Hydrometeorology cannot monitor supertoxicants, in particular dioxins (PCDD) and furans (PCDF) and assess the situation nation-wide. As a result, research studies, made in Russia for identification of these pollutants are mainly of local, selective nature. Nevertheless, these studies revealed dangerous levels of dioxins. Selective studies, made in Bashkortostan, the Komi Republic, Arkhangelsk Oblast, Volgograd Oblast, Moscow Oblast, Nizhny Novgorod Oblast, Samara Oblast, Tula Oblast and some other regions, revealed elevated PCDD levels in ambient air, water and soil, in excess of relevant MACs. The most often these excess levels were identified nearby production sites of facilities of chemical, petrochemical, paper and pulp, electric engineering, and light industries, facilities of non-ferrous metallurgy, utilities, etc.

Stockholm Convention stipulates, than industrialised countries will provide finance and technical assistance to developing countries and economies in transition for implementation of actions under the Convention, therefore our country may be granted the assistance, but only provided its signature of the Convention. The assistance would allow us to resolve the problem of adverse health impacts of persistent organic pollutants - the problem, that must be addressed anyhow, regardless Stockholm Convention.

Signature of the Convention by the Russian Federation would be of major political significance - it would be considered as a real step of our country towards integration into Pan-European and global practical co-operation for protection of health and environment.

The above preliminary cost estimates, associated with resolving the problem of PCBs in the Russian Federation do not suggest too heavy expenses, moreover, these expenses are not expected to be paid from the federal budget - the costs should be covered by numerous facilities and organisations, that use environmentally hazardous dielectrics - in line with Polluter Pays Principle. The cost estimates might be further detailed and refined in the period of time between signature of the Convention and its ratification.

Reference information:

Hexachlorobenzene - a by-product of production of elementary chlorine and chlorinated compounds, including some pesticides. Its toxic effects are associated with suppression of reproductive and immune systems.

DDT - a chlorinated organic pesticide, in the environment DDT is transformed into metabolites - DDE and DDD, which, in their turn, accumulate in fatty tissues of fish, birds and mammals. DDT and its metabolites destroy sex hormones and affect enzymatic system of the liver.

PCBs - polychlorinated biphenyls were widely applied world-wide as dielectrics, additives to hydraulic fluids, in heath-exchangers, as lubricants, etc. Toxic effects of PCBs are associated with suppression of the immune system (both for humans and animals).

Dioxins and furans - by-products of high-temperature processes. Their toxic effects include: disruptions of reproductive functions, suppression of the immune system, carcinogenic effects.

 

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