Hot air is the term used to describe the part of an industrialised country's assigned amount that is likely to be surplus to its needs without the country making additional efforts.
air that has been heated and tends to rise
Term commonly given to the part of an Annex I Party's Assigned Amount of emissions that is most likely to be surplus to its needs even without that Party making additional efforts, beyond existing policies in 1990, to reduce its emissions. This surplus is likely to be made available to other Annex I countries through Emissions Trading or JI. Russia and Ukraine are widely seen as having the most 'hot air' to sell.
Countries like Russia and Ukraine have low emissions today as compared to 1990 because of their economic collapse after the demise of the Soviet Union. Since they have agreed to stabilize at 1990 levels, which they are unlikely to reach by 2010, they can easily sell off these emissions--called "hot air"--which they would not emit until 2010.
A situation in which emissions (of a country, sector, company or facility) are well below a target due to the target being above emissions that materialized under the normal course of events (i.e. without deliberate emission reduction efforts). Hot air can result from over-optimistic projections of growth. Emissions are often projected to grow roughly in proportion to GDP, and GDP is often projected to grow at historic rates. If a recession occurs and fuel use declines, emissions may be well below targets since targets are generally set in relation to emission projections. If emissions trading is allowed, an emitter could sell the difference between actual emissions and emission targets. Such emissions are considered hot air because they do not represent reductions from what would have occurred in the normal course of events.
In Kyoto, some countries (including Russia and Ukraine) were allocated more emissions allowances than they are expected to need (as a result of the breakdown in the industries after 1990). This so-called "hot air" can be sold in the emissions trading system – with the result that emissions trading with these countries leads to more emissions, and real reductions are not made.
Hot air is the amount by which Russia's Kyoto Protocol target (for 2008-2012) exceeds its probable emissions in 2012 even without any abatement actions. In other words, even if Russia undertook no actions to reduce their GHG emissions, they would still be below their Kyoto Target. Under some proposed trading schemes, the hot air could be traded and might be worth a lot of money.
