Outlook and Regulation of the Russian Project-Based Transactions Market Under the Kyoto Protocol

This paper analyses the world market of project-based transactions under the Kyoto protocol and the competitive posture of Russia therein. Russia has the necessary potential to capture the leading position in the climatic investment market. It is proposed that the most efficient way of achieving this objective consists of incorporating a state carbon fund. We then study the impact of this institute on the investment attractiveness of Russia in the world project-based transactions market. Game theory and real options approach are synthesised to develop an economic instrument of project-based transactions regulation. The use of this instrument would ensure an increase in country's welfare relative to the traditional methods of regulation that are being employed at present in Russia and other countries