Russia’s greenhouse gas emissions: trends and long-term projections

Historically, Russia has been one of the largest sources of carbon emission in the world. During Soviet era, Russia emitted about 1/5 of global CO2 emissions from energy consumption, so Russia is responsible for a large share of cumulative anthropogenic carbon emissions into the atmosphere.

Even after the economic collapse of 1990s and sharp drop of industrial production, Russia is still one of the leaders in greenhouse gas (GHG) emissions. According to IEA estimates, Russia is the fourth largest emitter of CO2 from energy sector after China, USA, and EU.

Russian GHG emissions dropped down by 40% from 1990 to1998 following a dramatic decline in energy consumption and industrial production. In 1999-2007 emissions have grown by 10% up to 66% of 1990 level.

According to recent expert estimates (official data are not available yet), the global financial and economic crisis of 2008-2009 led to decline of Russia’s emissions by 7-8% down to -37% or even lower of 1990 level.

As has been the case in practically every aspect of Russian policy, the global economic crisis has had a major impact on the national energy efficiency plans and programs.

On one hand, the crisis affected the government’s approach to energy efficiency reform. Unlike the business-as-usual approach seen in previous years, more aggressive policy measures were adopted. For example, the government’s anti-crisis plan included requirements for recipients of funds from the stimulus package to have an energy efficiency plan.

On the other hand, the crisis forced substantial reductions in corporate investment programs, including modernization of energy infrastructure and energy transportation networks. This is particularly true of the electricity sector, which saw a 4.5% drop in demand in 2009 as well as the other sectors affected by the global decline in demand, such as metallurgy and the chemical industry.

One of the most important potential sources for carbon emissions reduction is energy efficiency improvement. According to IEA estimates, energy efficiency can contribute to 40% of GHG emissions reduction by 2050 (24% end use fuel efficiency, 12% end use electricity efficiency, 7% power generation efficiency and fuel switching).

Russia’s potential for energy efficiency improvement has been estimated by various domestic and international organizations. According to recent estimates by the World Bank together with the Russian Center for Energy Efficiency (CENEF), Russia can save up to 45% of its total primary energy consumption if it were to implement a comprehensive reform program. According to their calculations, with the right policy measures Russia could save:

• 240 billion cubic meters of natural gas,
• 340 billion kWh of electricity,
• 89 million tons of coal,
• 43 million tons of crude oil and petroleum products (measured in crude oil equivalents).

In total, Russia could achieve savings equivalent to all energy produced and imported (net of exports) by France or the UK. And the Russian economy could benefit from $120-150 billion in energy cost savings and increased gas exports annually .

Russia consumes almost 1,000 mln tons of coal equivalent of gas, oil and coal per year. According to the estimates, around one-third of the consumption could be substituted with economically competitive renewable energy. The technical potential is 25 times higher than current consumption of fossil fuels.

The economic potential estimates don’t include tidal power plants (it’s around ¼ of power generation in Russia), and – what is most important ‑ the provided estimates are for the current economic conditions. But prices of gas and electricity will most likely grow several times in the next decade. This will make more energy sources competitive and should significantly increase competitiveness of renewable energy.

There are few cases of renewable energy technologies implementation and/or investment efficiency estimate in Russia. All the projects are very efficient in comparison to conventional technologies currently used. Pay-back periods of investments in renewable energy technologies sometimes are shorter than a year. These experience and estimates confirm competitiveness of renewable energy use in Russia, and show that economic efficiency of renewables could be much higher than conventional technologies based on fossil fuels combustion. It is worth to assume that increasing fossil energy prices will make renewable energy technologies even more competitive, and will increase economic potential of renewables.

In the most optimistic scenario, when Russian economy would recover within 2010-2011 and return to high growth (6,5% per year GDP growth, so desirable by the government) in 2012 through 2020, continuing the historic trends of 2000-2007, the national carbon emissions would be growing and reach 79% of 1990 level by 2020.  Of course, if GDP would be growing slower than 6,5% per year, emissions would unlikely reach this level, and stay around 70-75% as in case of growth of 4,5% per year.

On the other hand, in the last 1,5-2 years, President Medvedev and Russian government dramatically scaled up their priorities in favor of modernization, energy efficiency improvement, technological progress, lowering dependence in oil and gas sector, etc. So it would be hard to expect that Russian historical trends of 2000-2007 would continue if the recent political decisions would be realized effectively.

It is extremely hard to quantitatively estimate impacts of the policy making in the modernization and, innovation-based development and other measures, so widely used in presidential and governmental rhetoric of the last year. However, if we only focus on one major target set by President Medvedev in June 2008 of improving energy efficiency of national economy by at least 40% by 2020, we may conclude, that in case of high economic growth (6,5% per annum in 2012-2020), and relatively stable energy balance, Russian emissions would have to reach maximum 73% of 1990 level.

In case of lower GDP growth, for instance 3-4% per annum, the Presidential target would require energy consumption to decline in absolute terms, so that GHG emissions would unlikely exceed 65% of 1990 level by 2020.

Here are not considered the impacts of other decisions, such as the governmental decree aiming at an increase of  the share of renewables’  in the energy balance from <1% to 4,5% by 2020, which may have a marginal impact on national emissions in the near term, but may play a substantial role in longer-term renewable energy policy though learning-by-doing, boost of technologies, etc.

After all, the main conclusion regarding Russian commitments on post-2012 and domestic mitigation policies and measures is that -10-15% of 1990 level is a very weak commitment, which can be easily fulfilled by Russia. The level of -20% is possible to reach just continuing the recent trends in sectoral development. But active policy in energy efficiency, modernization, innovation spheres would likely lead to emission stabilization at -27-35% of 1990 level by 2020 .

The recent announcement by President Medvedev about the possibility to accept a new commitment of -25% of 1990 level by 2020 is fully supported by the available projections of GHG emissions by 2020 and on.

Many scenarios point towards stabilization and even reduction of emissions in the longer run, especially if the current policy on energy efficiency and renewable energy would be effectively implemented in Russia.

Moreover, an active involvement of Russia in the global carbon market would provide additional incentives to reduce emissions domestically, and lead to further 10-15% reduction of emissions (of the currently projected levels), specifically in the energy and other carbon-intensive sectors (metallurgy, pulp-and-paper, etc.).

Hence, it is in the interests of both Russia and international community to establish the global carbon market scheme that would allow Russia to actively cooperate rather than isolate Russia from it by setting barriers and limiting Russian carbon trading by JI and similar mechanisms.

Dr. George V. Safonov is Director Center for Environmental and Natural Resource Economics, State University – Higher School of Economics, Moscow

The essentials in Copenhagen

Rather than getting every small detail of a new global climate treaty done in Copenhagen, UN climate chief Yvo de Boer hopes the conference will reach agreements on four political essentials.

The UN climate conference in Copenhagen in December this year may not yield a new global climate treaty with every minor detail in place. But hopefully it will close with agreements on four political essentials, thereby creating a clarity the world – not least the financially struck business world – needs.

The wish for clarity is expressed by Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), in an interview with Environment & Energy Publishing (E&E). According to Yvo de Boer, the four essentials calling for an international agreement in Copenhagen are:

1. How much are the industrialized countries willing to reduce their emissions of greenhouse gases?
 
2. How much are major developing countries such as China and India willing to do to limit the growth of their emissions?
 
3. How is the help needed by developing countries to engage in reducing their emissions and adapting to the impacts of climate change going to be financed?
 
4. How is that money going to be managed?

“If Copenhagen can deliver on those four points I’d be happy,” says Yvo de Boer.

He sees a need to get something signed and agreed in Copenhagen, but he thinks it will be very difficult to get every final, small detail of a whole new treaty done. The new climate treaty will be replacing the Kyoto Protocol which was adopted in Kyoto, Japan, in December 1997 and entered into force on 16 February 2005.
 
The Kyoto Protocol which sets binding targets for the reduction of greenhouse gas emissions has been signed and ratified by 184 parties of the UN Climate Convention. One notable exception is the United States, and Yvo de Boer is “really happy” to see the US back in the international climate change process and that the US is also engaging domestically in the process.

“My big lesson from the Kyoto era is that it's really important that the government delegation that represents the United States is in close touch with the Senate, with the elected officials on what's acceptable and what's not,” says de Boer, and he adds:

“I think that a major shortcoming of Kyoto was that the official delegation came back with a treaty they knew was never going to make it through the Senate. And this time I have the feeling that the communication is much stronger, that the Senate Foreign Relations Committee, through John Kerry, is really expressing strongly what they feel needs to be done in Copenhagen.”

Yvo de Boer thinks the Kyoto Protocol was rejected by the US for mainly two reasons. Firstly, because it did not involve action on the part of major developing countries. Secondly, because it was felt by the Bush administration that Kyoto would be harmful to the US economy.

Copenhagen will be a whole different scenario, and de Boer feels confident that President Barack Obama can successfully engage China and India and convince them to sign the next treaty.

“I think that Secretary of State Clinton's visit to Beijing was a really important and encouraging step to get us moving on that road,” says Yvo de Boer.

Asked about the global recession, de Boer thinks it will certainly have an impact on the negotiations in Copenhagen.
 
“You see already that investments in renewable energy projects are going down, partly because of the oil price going down and partly because of the economic activity going down,” he says.

But even though greenhouse gas emissions are expected to slow down as a result of shrinking industrial activities, de Boer does not believe it will lessen the pressure on countries to act and sign a new treaty.

“I get the impression talking to business people that they still want clarity from Copenhagen. If you're making investments now, for example in the energy sector, in power plants that are going to be around for the next 30 to 50 years, you can't really afford to keep waiting and waiting and waiting for governments to say where they're going to go on this issue.”