Russia is expected to deliver fast ratification for the global climate agreement deal agreed to in Paris in December. Unlike in the U.S., the climate change deal has encountered little or no political resistance within Russia.
The central thermal power plant in Baikonur. Photo: Sputnik
This past December was very unusual across Russia. The weather was so warm that several temperature records were broken in rapid succession. In some Russian regions, flowers started blooming. As thermometer indicators remained firmly above zero Celsius in many cities, people faced the terrifying prospect of a New Year’s celebration without snow. Mercifully, the temperature fell sharply in the final week of the year, but the warm December made climate change a significant topic of conversation in a country accustomed to long and cold winters.
The unusual weather was a timely reminder of why Russia joined 194 other countries in Paris for the COP21 Conference in December 2015 to sign an agreement on global climate change.
The meteorological aberration may be dismissed as an insignificant one-off event, but it was a flag that climate change is happening here and now. In fact, Russia’s abnormally warm December weather was a manifestation a bigger global event: meteorologists determined that 2015 was the warmest year on record around the globe.
What’s next for the Paris Climate Agreement?
The Paris Climate Agreement was signed with much fanfare on Dec. 12, 2015. But the document will remain a non-binding handshake until it is ratified and implemented at the national level by the various countries, including the U.S., China and Russia. For the climate agreement to formally take effect, it has to be ratified by at least 55 nations. Russia is not expected to delay the process.
Despite the Russian government having a few distractions in places like Ukraine and Syria, fighting climate change remains high on the national agenda. In a recent press conference dedicated to implementing the Paris Climate Agreement, the Russian Minister of Natural Resources and Environment announced that the Climate Agreement ratification process will start in April and may be concluded later this year.
Once the Duma, Russia’s parliament, ratifies the agreement, representatives of Russia’s four main political parties with seats in the Duma will have to agree upon legally binding legislation that would spell out what will be required from Russia’s government, businesses, and consumers to meet the greenhouse gas reduction targets agreed to in Paris.
The measurement and evaluation of the results will be important. Will the reduction of greenhouse gas emissions be spread across all industries and regions? Or will it favor or penalize any particular sectors? It is only after the details of the climate change legislation are confirmed that one can judge how decisive and effective Russia’s climate change action will be. How will compliance with the regulation be achieved? Will there be penalties, incentives, or both? Perhaps most importantly: How will Russia resolve the dilemma that Russia’s hydrocarbon industry is both the main source of the government tax revenue and the largest contributor to Russia’s CO2 emissions?
As Russia moves to implement the climate change deal, the Russian government faces another complicating factor: the dramatic fall in the price of oil.
The Paris climate deal was hatched during the years when oil was $100 a barrel. Surely, preventing climate change was a universal and noble goal, but the high price of traditional fossil fuel energy served as a practical economic incentive to look for alternatives to oil and gas. Now, if the price of oil settles to around $30 a barrel, it reduces the competitiveness of alternative energy, and makes climate change action less appealing to businesses. Already there are signs that investor interest in the alternative energy sector is cooling down in Europe.
A climate change deal ties in with Russia’s economic modernization initiatives
Russia has been affected by the oil price drop to a much greater extent than most countries.
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Ironically, the pain of the decline of the price of oil was exacerbated by Russia’s liberal monetary policies that eschew capital market controls. The Russian currency exchange rate fluctuates more or less freely against the dollar. The oil price decline has led to the significant devaluation of the ruble from 30 rubles per dollar in 2014, to an all-time low of 80 rubles per dollar in January 2016.
The decline of the ruble has inflicted pain on many businesses and individuals, especially those who borrowed funds in dollars or euros. The Russian government aims to reduce the sensitivity of the Russian economy and financial markets to oil price swings. And it turns out that the efforts to ensure macroeconomic stability are complementary to Russia’s program to flight climate change.
The head of Russia’s Central Bank, Elvira Nabiullina, said recently that the best way to reduce the ruble’s volatility is to diversify Russia's economy away from oil and gas. Moving its industries away from hydrocarbons would also help Russia meet its commitments under the Paris Climate Agreement.
Increasingly, Russia sees its future in the low carbon world, and this is consistent both with Russia’s plans to combat climate change and with Russia’s broader aim to make its economy and financial system more modern. Energy technologies, including energy storage, hydrogen technologies and green transport, are among the top priorities at Skolkovo, Russia’s high tech hub. Investments in solar panels, battery storage, and energy saving technologies have been a relatively bright spot on Russia’s otherwise bleak investment landscape.
The impact of renewable energy development is not limited to big business. It can be seen in small daily life details on the streets of Russian cities, such as street lamps on solar panels and free solar-powered Wi-Fi in public parks. There is a Tesla club in Moscow, and the recently opened highway that connects Moscow and St. Petersburg comes with electric vehicle charging stations.
But there is another reason to be optimistic that climate change action will move forward in Russia – the absence of political resistance to the climate deal in Moscow.
Political climate vs. climate politics
While the Paris climate talks were criticized by a few presidential candidates in the United States, no serious Russian politician has come out against the climate change agreement. The climate change deal is likely to have an easier time in the Russian Duma than in the U.S. Congress.
There are two reasons for Russia’s broad domestic support for the international initiative to combat climate change.
First, unlike in America, climate change is not a political issue in Russia. It is a matter that is left to scientists, not politicians or lawyers, as in the U.S. Once the implementation of greenhouse gases regulation impacts businesses, Russia will surely see some controversy and debate over costs and benefits, but it will probably not be a part of Russia’s political discourse.
In fact, it would be unthinkable for a Russian newspaper to come out against the climate change deal on ideological grounds. That is what the Wall Street Journal did in an editorial, criticizing the governments’ interference with the private markets and dismissing the Paris agreement’s “legacy of smoke.”
Second, the embrace of the Paris accord is a sign of Russia’s keen desire to reengage with the world. Russia wants to overcome the economic sanctions as soon as possible, and while holding the line on the issues that are critical to Russia (NATO expansion, the status of Crimea), the Kremlin seems to be interested in finding common ground with the West in other areas: the Iran nuclear agreement, fighting terrorism, and now, fighting climate change. Later this month, Moscow will host the third National Climate Forum where representatives of Russian civil society and the government will discuss the implementation of the Paris Climate Agreement.
While Russia is moving forward, the U.S. seems to be sliding back. Several days ago, the U.S. Supreme Court blocked Obama’s administration initiative to limit carbon emissions from power plants. Should the Paris accord be derailed by politics, it is fairly certain that the culprits will not be found in Moscow.
However, let’s stay optimistic for now. Hopefully Russia will ratify the greement later this year, and America will follow Russia’s lead. The ratification process has already started: the Republic of Fiji became the first country to ratify the Paris climate change deal.
The opinion of the authors may not necessarily reflect the position of Russia Direct or its staff.