Russia Needs an Up-To-Date Climate Policy

11 january 2016

The Analytical Center has published a new Energy Bulletin titled 'New Climate Policy Goals'. The Bulletin topic is the adjustments to be made to Russia’s climate policy in the light of the Paris Agreement. The Bulletin analyzes the new global agreement on climate change, discusses the progress made so far and the problems with the development of the natural gas motor fuel market in Russia as well as the OPEC’s current actions.

The obstacles holding back the development of a modern climate policy in Russia include the slow Government's response to climate challenges, the lack of awareness among the general public about the climate change and, as a consequence, the lack of a sense of danger among people. At the moment, the country’s Government is miles ahead of the general public in understanding climate challenges as can be seen from the speech the Russian President delivered at the UN General Assembly. Business is adapting, albeit slowly, to the new trends as well. What is needed in this situation is some kind of a link between climate change problems and the challenges faced in every specific region of Russia so that an overall strategy could be developed for adaptation to  the resolutions passed in Paris.

The new climate change agreement signed by 195 countries represents the absolute maximum that could be achieved under current circumstances.  The problem is that the lack of binding goals and clearly-defined implementation mechanisms cast doubt on the eventual success of the deal. In effect, under the Paris Agreement it is expected that countries should each on its own implement the global goal of slowing down climate change.

One promising way to reduce emissions and diversify types of fuel is to expand the use of gas motor fuel but this field has seen the considerable stagnation in recent years.  Businesses should be given transparent access to gas fuel so they can build filling stations for vehicles that run on gas engines.

The oil markets are currently demonstrating that a 1-2% glut in supply (1-2 million barrels per day) can drive the price down by a factor of three in just 18 months.  Exporters are seeing their budgets evaporate but the Arab OPEC members, especially the four Persian Gulf kingdoms that account for half of OPEC’s oil production do not want to reduce output for fear of losing market share.  We are seeing a most interesting market theory phenomenon where multiple suppliers are undercutting each other by driving down the price and losing money, completely unable to cooperate because of conflict of interest, lack of trust and a potential threat from antimonopoly regulations.

More details in the Bulletin 'New Climate Policy Goals'

Other issues of the Energy Bulletin in the Publications section