Climate Change: Is it Still a Question of Money?

3 September 2021

Climate Change: Is it Still a Question of Money?

CONCLUSIONS

Government and business are looking for new ways to regulate the impact on the environment

“Seeing ourselves as part of the global business community and being an export-oriented company, we have made ESG, the climate agenda our top priority. Our company has already started developing an environmental strategy. We base emission assessments on the technology that we have now and on the energy sources that we will have in the future,” Yuliya Shabala, Deputy Director General for Sustainable Development and Corporate Affairs, Udokan Copper.

“Federal Law No. 296-FZ On Limiting Greenhouse Gas Emissions specifies in detail the course of action for the government and business and regulates obligatory terms and conditions for business to calculate the carbon footprint of the companies that exceed a certain amount. It is well-harmonized with the European legislation regarding requirements to our manufacturers and regulators,” Roman Panov, First Vice President, Gazprombank.

Different countries should come together to solve climate issues

“Climate doesn’t have national borders. The objective is not to impose tax on, say, Russian export to Europe, but to actually achieve carbon neutrality at about the same pace,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

“Reaching total carbon neutrality depends, of course, on the commitments taken on by the countries,” Ernesto Ferlenghi, Chairman of the Energy Committee, Chairman of the Steering Committee of the Green Initiative Project, Association of European Businesses.

Business needs personnel oriented towards innovative jobs

“These skills will be driven by the importance of the agenda. We do see that the biggest Russian captains of industry are absolutely outstanding professionals – they are young, ambitious, they are highly qualified, and they do a very important job from the point of view of the environmental and ESG agenda,” Andrey Bayda, Vice President for Sustainable Development, VEB.RF.

“This literally happened within the past five years, when all large companies started hiring senior managers focused on sustainable development, climate, and environmental agenda,” Yuliya Shabala, Deputy Director General for Sustainable Development and Corporate Affairs, Udokan Copper.

PROBLEMS

Gap between European and Russian performance due to regulatory differences

“Already more than 120 countries have pledged net-zero, while Russia hasn’t done that. None of the four strategies announced by the Ministry of Economic Development is actually targeted at net-zero,” Mikhail Yulkin, General Director, CarbonLab.

“We have been trying to convince the Government for years that we need to change the methods of evaluation of Russian forest carbon absorption capacity. The methods are the strictest in the world, that’s why they don’t yield the same result as those in the US or in Europe,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

Decreasing demand for non-renewable energy sources

“The problem is a decreasing demand for coal, gas, oil, and oil products, which is a much more significant challenge for the Russian economy than the details of equal conditions of shipping oil refinery products to European markets,” Mikhail Yulkin, General Director, CarbonLab.

“In 2020, the demand for oil decreased by 10%, for coal – by 7%, for gas – by 3%. The only segment of global energy production where the demand rose was renewable energy sources – the demand grew by 1%,” Ernesto Ferlenghi, Chairman of the Energy Committee, Chairman of the Steering Committee of the Green Initiative Project, Association of European Businesses.

SOLUTIONS

Russian regulation and methodology regarding the green agenda need changes

“I hope that the microgeneration law will start actually working. This would mean that all of us as private individuals will have the right to use a solar panel at home. We have analysed the international experience and chose carbon-free certificates. We saw that they are used in 70 countries and drafted a bill,” Pavel Snikkars, Deputy Minister of Energy of the Russian Federation.

“We have prepared taxonomy on green finance which the Government also has. This will help us get the Russian taxonomy and determine which project is considered green and attract investment, including from abroad, for an energy shift,” Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

Partial retention of traditional energy sources

“Our condition is that we will not refuse to use coal, and there will be regions where coal will be used,” Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

“We must correctly evaluate existing carbon absorption capacity of our ecosystems, first of all of our forests. At the same time, we must think about extending these absorption capacities, including through implementation of programmes in this field, such as fighting wildfires, and forestation,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

For more information, visit the Roscongress Foundation's Information and Analytical System at www.roscongress.org.

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