Opportunities and risks of the climate policy in Russia

Abstract

The climate agenda involves significant economic dimension and component. This is precipitated, on the one hand, by the climate change impact on the economy and its implications for economic development that necessitate costs for planning and implementing adaptation measures, and, on the other hand, by the imperatives of structural and technological modernization of the economy to strengthen its competitiveness and sustainability of socio-economic development including reduction of industrial greenhouse gases (GHG) emissions and increasing the ecosystems’ carbon sink capacity. The above implies harmonization of ecological, climatic, socio-economic, and technological characteristics to produce an effective national low GHG emissions socio-economic development strategy required by the Paris Climate Agreement. This in turn calls for comprehensive assessment of the impact produced by new low-carbon technologies on economic dynamics using the framework of macrostructural calculations and scenarios of economic development of Russia with different volumes of funding invested in decarbonization. It is argued that the most efficient is a group of so-called moderate scenarios that provide for both GHG reduction and economic growth rates above the global average. More ambitious scenarios involve risks of slowing GDP growth given weighty additional investment which constrains the dynamics of household consumption. The key role of the Russian ecosystems capacity to absorb and sequester carbon in implementation of the low GHG emissions socio-economic development strategy is substantiated and the imperative for the complex of measures to improve the efficiency of land use and forestry resources (LULUCF), primarily the quality of R&D and the national monitoring system development, is emphasized.