The central bank said on November 25 that Russia’s plan to reduce its carbon footprint by 2050 will require investments of between 1 trillion roubles and 4 trillion roubles a year ($13.4 billion to $53.6 billion).
A serious challenge for Russia, whose economy relies heavily on oil and gas production, as well as mining, is posed by climate change. Some of that infrastructure is built on permafrost, which is vulnerable to rising temperatures.
To cut net emissions of greenhouse gases by 2050 in the main scenario approved by the government, Russia, the world’s fourth-largest emitter of greenhouse gases, will utilize from 1% to 2% of its gross domestic product. The central bank said in a report on financial stability:
“Such investment will require an active financing from Russian banks and the financial sector as a whole.”
The central bank said “green” projects could face difficulties securing loans due to high risks such as insufficient transparency even though the Russian banking sector has sufficient capital.
Russia will not become a zero-emissions economy by 2050, the economy ministry has warned, saying that if it aims at reaching this goal, it runs the risk of losing macroeconomic stability and sustainable growth.
Already starting to implement principles of sustainable development, are the Russian companies with businesses that negatively impact the environment. But, their integration in the global climate agenda remains low. The central bank said:
“This situation has to be changed, otherwise the (Russian) financial sector could face high risks in the medium term.”
($1 = 74.6375 roubles)
