9 February 2024

The Carbon Unit Game: A New Environmental Monopoly?

The Roscongress Foundation prepared a report entitled ‘Carbon Neutrality: Saving the Planet or an Economic Weapon?’ on the prospects for managing greenhouse gas emissions to achieve the overall goals of combating global warming.

Last year was the warmest year on record for global temperature tracking since 1850. The global average temperature was 14.98°C, which is 0.17°C above the previous record set in 2016. The continued rise in global temperatures is pushing many countries to take stronger action to reduce emissions and achieve carbon neutrality.

However, in the absence of a single internationally harmonized system of transboundary emission control, individual states are implementing their own schemes. They proceed from their economic and geopolitical interests, which may conflict with the interests of other countries. For example, the EU’s border carbon tax may become a new trade barrier for exports – there is a risk of selective, non-transparent application of transboundary carbon regulation and its transformation into a new form of economic competition.

Scientists estimate that to prevent the worst effects of climate change, the increase in global temperature must be limited to 1.5°C above pre-industrial levels. Keeping the rise in annual average temperature within these limits is possible if the world achieves net zero emissions by around 2050.

The net-zero doctrine itself may not deliver the results claimed in international agreements. However, without a net-zero orientation, the warming will be even more severe and could amount to 2.6°C. In any case, mankind will not abandon decarbonization plans in the coming years.

Russia does not yet have a mandatory carbon fee for businesses, but an experiment is underway in Sakhalin Region to quota the amount of allowable emissions. In addition, voluntary climate projects are being implemented to monetize carbon units and achieve the targets stated in the national Climate Doctrine. For example, in September 2023 in Vladivostok, the Roscongress Foundation and the oil and gas chemical company Sibur agreed to transfer carbon units to the Eastern Economic Forum to fully cover for the Forum’s carbon footprint. Thus, thanks to Sibur’s climate projects, the EEF has become Russia’s largest carbon-neutral economic Forum with confirmed international verification.

Further development of such projects will be necessary to combat not only climate change, but also the transitional risks from the decarbonization measures being implemented at the global level. These risks are, in particular, associated with a sharp increase in the costs of developing the global ‘green agenda’ to the detriment of our own economic development.

The full text of the analytical report is published on the website of the Roscongress Foundation and on its Zen Channel.

Read more