Russia’s carbon neutrality: pathways to 2060

There is an opinion both among the skeptics and the optimists, that there is currently no room for long visions of Russia’s economic and decarbonization future. However, all of the countries need a future and visions of the future. As correctly stated in the “Back to the future” movie, ‘The future isn’t written yet’. Matt Myklusch in his “Jack Black and Imagine Nations” makes it even stronger: “The future is not written. It lies in the choices you make. Our future is ours to decide. Always”. To decide on our future, we need a map of pathways that lead to the desired future statuses. To map these pathways, we need to climb a high tree in the thick forest to see what is around us and which directions are available. The time horizon for this study is 2060, so there are about forty years ahead. The history can give us a feeling of what may happen in the next forty years. Forty years ago (in 1982) there was USSR ruled by Brezhnev and the Russians had no vision, that in 10 or 20 years’ time they would live in a very different country. In other words, extrapolation doesn’t always help. One has to have imagination.

Visions of a low carbon future are important, as they affect Russia’s economy, fuels and basic materials exports to the global and regional low carbon markets, where low carbon footprint is becoming critical, while carbon price mechanisms undermine the competitiveness of carbon-intensive products. The future of carbon-intense markets is not bright, in contrast to high-tech products and services in the emerging trillions-of-dollars-worth low carbon markets, which Russia needs to penetrate. Any development should rely on the least-costly technology solutions. It is expected that in the 2020s and 2030s low carbon technologies will become less costly, than the traditional processes. Producers and countries which will be lagging behind will lose the economic development momentum. Many sectors and industries need long-term visions when making investment decisions to avoid having their assets stranded. Any family with children need long-term visions on the potential futures ahead.

Russia has pledged for 2060 carbon neutrality. However, the pathways to this goal are yet to be explored. This is challenging – partly due to the lack of long-term models for the whole economy and for the key sectors working on the time horizon beyond 2050. Therefore, expert and policy-making communities have to stop in 2050, with only intuition and blind search prompting whether carbon neutrality is attainable in the mist of the 2050s.

The first task, which this study was seeking to achieve, was to further develop CENEf-XXI’s model set to extend the time horizon and improve the technological and costs details by sectors. The overall goal was to better capture the effects of key mitigation options, and the potential effects of global low carbon transition and the restrictions that followed Russia’s military operation. This model set is presented in Chapter 2.
The initial purpose of Chapter 3 was to assess the systemic impacts of low carbon transition on the global scale and of Russia’s key trade partners on Russia’s economic development depending on the selected pathways, breaking down this assessment into the effects on traditional Russia’s exports and on its potential to penetrate the emerging low carbon markets. After February 24th, this purpose was modified to also capture long-term impacts of the strong and escalating sanctions.

One lesson from the future is that there is no business-as-usual for the decades to come; instead, business-as-unusual needs to be in the focus. For Russia, there will be no business-as-usual even in the short- and medium-term. The task was to develop visions to embrace the range of uncertainty which greatly increased after February 24. Three sets of scenario storylines were developed to cover the abruptly widening uncertainty zone to draw the pathways which may bring Russia to carbon neutrality in 2060: 4S – Stagnation, Sanctions, Self-Sufficiency, which may be alternatively titled Forward-to-the-Past (as the opposite to the Back-to-the-Future); 4D – Development Driven by Decarbonization and Democratization, which opens the door for Russia to return to the global economy; 4F – Fossil Fuels for Feedstock, which builds upon 4D and allows Russia to use its fossil fuel resources for non-energy use. The story lines for these pathways are described in Chapter 4.
The next three chapters – five, six and seven – present the results of model runs for each alternative conceptual pathway to assess the trajectories towards carbon neutrality and the costs and benefits associated with different low-carbon development pathways. Contributions from different sectors (power and heat generation, industry, transportation, buildings, agriculture, waste management, LULUCF) to the carbon neutrality perspective were assessed, and – building on this evaluation – recommendations were developed for potential sectorial policy goals and instruments.