One controversial scheme under the agreement allows industrialised countries which are comfortably below their emissions targets to sell the difference to other industrialised nations, in a trade which is not necessarily related to any emissions cuts.

According to available data, Russia may have more than 800 million tonnes of carbon dioxide rights, called Assigned Amount Units (AAUs), to sell at the end of Kyoto's first commitment period (2008-2012).

This is more than the estimated AAU demand of every other Kyoto signatory country combined.

Alexander Khanykov, head of Russian clean energy project developers Carbon Project Group, told Reuters on Friday that he believes Russia will save most of its AAUs past 2012 instead of selling them and possibly flooding an already precarious carbon market.

"Russia can sell a huge amount, but nobody will buy this much. The market would be destroyed." he said.

"I think Russia doesn't want to sell until the targets of the second commitment period are clear."

Last month, Japan and Russia held preliminary talks about a prospective AAU transaction, but a bilateral deal was not reached, said Alexander Averchenkov, a World Bank consultant.

"Japan is the only country to approach Russia, as far as I know," Averchenkov said on the sidelines of a carbon markets conference in Germany.

The World Bank's Moscow office is consulting Russia on its AAU portfolio.

Averchenkov also believes Russia will bank most of its AAUs until after 2012, so it can continue to enjoy the benefits under any new emissions targets set out in a Kyoto successor pact.

KYOTO II

With Kyoto's end quickly approaching and major emitters like the US, China, and India wary about committing themselves to greenhouse gas targets, doubts are surrounding the new pact.

Last month, Vsevolod Gavrilov, the official in charge of Russia's Kyoto obligations, said Moscow would oppose binding emissions cuts under a new treaty for the "foreseeable future", arguing that the emerging middle class and industry needed to use more energy.

"Perhaps what the Russians are saying is that if other major industrialised countries don't take action to limit their emissions, then why should we?", Yvo de Boer, head of the United Nations' climate change secretariat, told Reuters in an interview.

"There's some sense in that."