real reasons
First, the action plan for Russia’s low‑carbon development, prepared by the Ministry of Economic Development, marked a pivotal step toward the goal of reaching net zero greenhouse gas emissions by 2060. The document was delivered to the Russian government in October 2021, signaling a formal commitment to a cleaner, more sustainable energy transition and aligning with broader global climate objectives acknowledged by many economies in North America and beyond.
Second, the climate debate between wealthy Western nations and the developing world culminated in December 2023 at the 28th Conference of the Parties in Dubai. The gathering underscored a continuing gap between ambitious Paris Agreement targets and real progress on reducing global greenhouse gas emissions. Wealthier regions pressed for rapid decarbonisation while developing economies emphasized the need for financial support to adapt and grow. Despite the rhetoric, many major emerging economies continued to see rising emissions as they strive for growth, while Russia affirmed its adherence to Paris goals and pursued national objectives within that framework.
Third, the Ministry of Economic Development has, over the year, publicly signalled openness to carbon‑pricing policies, while also stressing that any such move would be discussed with business and government stakeholders. Deputy Minister Ilya Torosov noted that a carbon fee could be a necessary policy tool, but one that would require broad consensus before adoption. This stance reflects a cautious approach that many governments in North America and Europe also follow when considering new environmental mechanisms.
Shortly after, a discussion on carbon regulation took place during the Russian Business Week organized by the Russian Union of Industrialists and Entrepreneurs. The Climate Forum brought together business leaders, ministry officials, and industry experts to weigh fiscal options. While some participants expressed concern about including a carbon payment mechanism in the draft plan, others urged careful analysis before moving forward. Alexander Shokhin, president of the union, emphasized the need to assess whether the proposal has an objective basis and cautioned that the outcome remains uncertain as discussions continue.
At the start of February, the Central Bank of Russia released a report outlining preliminary stress‑test results on how climate transition risks could affect the economy. The scenarios suggested that without proactive adaptation, a significant share of large firms could face financial strain by 2030–2040. A more ambitious domestic climate policy would likely intensify those pressures earlier, underscoring the delicate balance between policy ambition and economic resilience.
Even as brown sectors such as oil and gas, metallurgy, mining, transport, and chemical production explore new business models for a low‑carbon world, the reality remains that internal carbon pricing could impose costs beyond export emissions. If implemented, these firms might face charges on emissions from production activities themselves, widening the impact footprint beyond traditional boundaries and affecting competitiveness in domestic and international markets.
hopes
European discussions about carbon pricing have shaped a narrative where reducing energy dependence and stimulating domestic industry could be achieved through mechanisms like the European Union’s cross‑border carbon regulation. Known as the TUR framework, this approach taxes greenhouse gases embedded in products sold within Europe, creating potential incentives for exporters to align with European standards.
The logic behind this is straightforward: if a carbon tax near Europe’s level—around one hundred dollars per tonne of CO2 equivalent—applies broadly, there could be exemptions for some foreign producers under certain conditions. Yet, given the EU’s sanctions framework and geopolitical considerations, neutrality toward Russia is unlikely. The net effect would be a pressure on exports; Russia could see reduced demand if European buyers seek lower‑cost options elsewhere, complicating the trade landscape for many sectors.
Some analyses suggest that fiscal revenues from carbon regulation in Russia could reach more than 4% of GDP by 2030, a prospect that would have wide economic implications. Domestic energy prices would face upward pressure, potentially elevating inflation and reshaping consumer costs. The overall effect would depend on how the policy is designed and implemented, along with the responses from trading partners in North America and other regions.
As climate payments enter early discussions in several countries, including Russia’s main trading partners, the path remains unclear. The debate includes whether to pursue a European‑style TUR or to develop distinct approaches tailored to national contexts. In places like India and South Africa, there are signs of disagreement with European carbon measures, signaling a broader appetite for policy experimentation on a global scale. The outcome will hinge on multinational dialogue, trade dynamics, and the ability to harmonize environmental goals with economic vitality.
So far, the European Union remains the clear example of a high carbon price. Other regions have hesitated or adopted more modest positions. The question for major exporters is where demand will come from as carbon costs rise. If European buyers gravitate toward cheaper options with higher footprints, producers in Russia and neighboring economies may adapt by improving efficiency or seeking alternative markets. Many experts believe substantial developments in carbon payments are most likely in the 2030s, giving Russia time to study options and craft a climate‑policy model that supports its development trajectory while remaining aligned with global climate aims.