Analytics
EUREN Brief 10
T
Drivers of EU-Russian cooperation on
environmental issues: the view from Russia
The EU and Russia have a record of cooperation
on environmental issues. However, their current cooperation regarding the role of the environment in
the global economy and policy is not strong enough – even though it would be in the interests of
both Russia and the EU (see EUREN Brief no. 9 by Georgios
Kostakos & EUREN Brief
no. 11 by Oldag Caspar). This area of potential cooperation is mutually beneficial and may
contribute, under certain conditions and responsible policies, to the economic development and
resolution of environmental problems.
Natalia Piskulova
Moscow State Institute of International Relations (MGIMO-University)
Moscow State Institute of International Relations (MGIMO-University)
January 2020
Drivers of cooperation for
Russia
For Russia, the important drivers of cooperation
with the EU are rich natural resources (and all other environmental resources); the need to solve
environmental problems caused by an inefficient economy; the orientation towards economic
modernization, exports diversification and integration in the global economy.
Russia has
the largest environmental resource base in the world, the largest territory and forest areas, as
well as many types of mineral resources, such as oil, natural gas, timber, iron, copper, lead, zinc,
nickel, tin, mercury, potassium salts, gold, platinum, palladium, silver, diamonds, etc. It also
holds over 20% of the Earth's water resources and possesses the largest untouched areas in the
world. Its ecosystem services provide the world with nearly 10 percent of its biosphere
sustainability.
Russia's vast resources have stimulated a material intensive and low
efficiency type of economy, thereby causing many environmental problems, including air pollution,
water and soil contamination, as well as a depletion of natural resources. Hence, in 2018 Russia
ranked only 52nd in the Environmental Performance Index, which assesses 180 countries on
24 performance indicators, measuring environmental health (air quality, water and sanitation) and
ecosystem vitality (biodiversity, forests, fisheries, climate and energy, air pollution, water
resources, and agriculture). According to this index, the most serious environmental problems Russia
faces are in the areas of fisheries, biodiversity, climate and energy. [1]
Russia is currently number five in the world with regard to greenhouse gases emissions. If the
amount of emissions is measured per capita, however, Russia is not amongst the global top ten. The
economic sectors with the highest emissions are the energy sector, transport and other industrial
combustion sectors. Addressing the emission of greenhouse gases requires joint solutions. This could
form the basis for a coordinated policy between Russia and the EU. Moreover, Russia and the EU have
common land and sea borders and interconnected biosystems. Therefore, many environmental issues have
a trans-border character and can only be resolved by unified efforts.
Costs related to the
solving of environmental issues while developing a traditional economy a real ready very high, and
may further increase in the future. For example, the costs associated with a decrease in the quality
of the natural environment are estimated to be 4-5 percent of GDP p.a. – without taking into
consideration health issues. Health-related costs due to air and water pollution, over the course of
some years, amount to 3-6 percent of GDP. [2]
This means that the total cost of the deterioration of the environment could reach as high as 7-11
percent of GDP. This offers enormous potential for the economy, subject to it being restructured so
that it treads the "green path".
For Russia, the important drivers of cooperation
with the EU are rich natural resources (and all other environmental resources); the need to
solve environmental problems caused by an inefficient economy; the orientation towards economic
modernization, exports diversification and integration in the global economy
Russia's economy needs modernization. Currently,
it has relatively low economic development rates, which is due to both internal and external
circumstances, including the financial and economic crisis of 2008-2009, the recent economic crisis
and Western sanctions. A substantial proportion of the economy is based on outdated technologies,
which means that resource usage efficiency is relatively low. According to preliminary data, 47
percent of fixed assets in 2018 were worn out, which affects greenhouse gases emissions and the
general environmental situation. [3]
Since 1990, Russia's energy intensity has decreased by 1.4 times due to a change in the GDP
structure (the increase in the economy's share of non-energy industries, including services, trade
and the financial sector), the growth of natural gas in the energy balance, and the increase in
energy efficiency. However, it is still substantially above the global average, by 1.7 times, [4] not
to mention the average of more developed countries. This is mainly due to the cold climate and the
structure of the national economy.
The modernization of the economy would enable Russia to
achieve not only economic development, economic diversification and increased competitiveness, but
also to improve its ecological situation. The ecological path of economic development, through a
more active ecological policy, including the introduction of carbon regulations, could reduce costs
and stimulate economic growth. This would more than outweigh the negative economic consequences.
The costs associated with the implementation of environment protection measures would be
substantially lower than the costs of environmental deterioration. For example, for Russia to build
water purification facilities, some 125 billion rubles (about 2 billion EUR) of private investments
are required. [5]
Necessary investments into the replacement of outdated oil pipelines, which cause 95 percent of oil
spillage, should be in the range of 1.3 trillion rubles (about 28 billion EUR). [6]
Russia's environmental
policy
Russia's environmental policy evolved from
Soviet policies, which prioritized industrial development and were characterized by fragmentation,
poor public participation and environmental agencies having little role in political decisions on
economic development. During the Perestroika years, special state institutions were created in the
area of environmental protection, the most important of which was the State Committee for the
Protection of Nature, established in 1988. In 1994, the Russian Federation adopted a State Strategy
for Environmental Protection and Sustainable Development. However, the sharp decline in industrial
production (20-40 percent in different industries in the 1990s) and financing weakened the
incentives to upgrade production and improve its efficiency.
Most of the 2000s was
characterized by a decline in the activities of national environmental agencies. This was partly due
to the transfer of most of their functions to regional authorities and the weakening of federal
agencies' control over the implementation of environmental laws. In the same period, economic growth
was mainly based on resource-intensive production, which contributed to the accumulation of
environmental problems. It has also made relevant the issue of increasing production efficiency to
improve the competitiveness of Russian products. This was reflected in the 2008 the Presidential
Decree "On Raising Energy and Environmental Efficiency" [7]
and the Federal Law "On Energy Efficiency". [8]
Other fundamental conceptual documents and laws were adopted in the areas of socio-economic
development, environmental development and energy policy. [9]
Despite its serious economic problems, Russia clearly states its commitment to the green development
path and its environmental policy has become more active in recent years. New environmental laws and
bylaws have been adopted, creating new economic stimulus in the environmental sphere. For instance,
a 2014 federal law stipulated a comprehensive reform of the environmental management system and the
introduction of Best Available Technology (BAT) principles to the environmental regulation of
economic activity, which is a tool of the state's environmental and industrial policies. [10] The
"National Project Ecology", adopted in May 2018 along with other national projects, aims to
strengthen environmental protection by 2024. Its implementation implies drastic changes to the air
and water quality, maintenance of biological diversity, improvement of waste treatment and the
introduction of the best technologies available.
Moreover, the Russian government is
working to introduce a comprehensive system of managing municipal solid waste, eliminate illegal
dumps all over the country, and create an effective system that will monitor and control the quality
of air. To improve the quality of drinking water, there are plans to modernize the water supply
system and build new wastewater treatment facilities that employ advanced technologies.
Many problems persist in Russia's environmental
policy. Environmental issues are still not a priority in Russia's economic policy and the
interests of resource-intensive industries remain dominant
Russia joined the Paris Agreement in 2019 and
committed to reducing greenhouse gas emissions to 70-75 percent of the 1990 emission levels by 2030.
However, in 2017 Russia's greenhouse gas emissions were only at 68 percent of the 1990 emission
levels due to the economic downturn in the 1990s. Hence, Russia's envisaged targets have already
been met, and emissions can even be increased. For the time being, the implementation of the Paris
Agreement does not imply high costs for Russia.
The share of renewable energy sources in
Russia's power balance is currently very low, at about 1 percent. Moscow is looking into increasing
the potential of renewable energy sources. It is also carrying out a state program of targeting
energy saving and increasing energy efficiency, which is a key factor in reducing the energy
intensity of the GDP as well as emissions. This area of activity can form an important base for
cooperation with the EU.
One important incentive for the greening of the economy and for
fostering economic collaboration with the EU is Russia's growing integration in the global economy
and the necessity for Russian companies to comply with international standards. This is particularly
the case with companies that operate in the global market and work in "dirty" industries (such as
oil, metallurgy, transport, wood and paper, etc.).
The introduction of climate policy
measures in other countries (standards, subsidies for the producers of renewable energy and other
measures) will lead to a reduction in demand for traditional energy goods. This will threaten
Russian exports, as the share of carbon-intensive industries continues to exceed 60 percent. The EU
plans to introduce border carbon adjustments to countries with no emission reduction targets. The
harmonization of environmental standards with the EU's norms would be highly beneficial for Russia.
At the same time, many problems persist in Russia's environmental policy: Environmental
issues are still not a priority in Russia's economic policy and the interests of resource-intensive
industries remain dominant. There is a lack of cooperation between the state, private businesses and
the public on the development of key environmental laws. Attention payed to environmental education
is still insufficient, although the level has recently increased. Environmental programmes are
chronically underfunded due to economic problems.
Collaboration between Russia and the EU
in the environmental field: past and present
Russia and the EU have collaborated in the
environmental field for more than 25 years. Since 1991, the EU has provided technical assistance to
Russia under TACIS and other support programmes, including for environmental projects.
Despite the general deterioration of political relations between Russia and the EU since 2014,
environmental cooperation has never entirely ceased.
Since 2000, Russia and the EU have been
working to harmonize environmental state standards and help Russian authorities to improve
environmental legislation (the cost of which was €2.5 million). [11]
The Cross-Border Cooperation (CBC) project supports sustainable development between the EU and
neighborhood countries, including Russia. In the new round of CBC programmes for 2014-2020, the
environment is one of the priority areas. There are seven CBC land-border programmes that involve
Russia. These are in the Arctic, Karelia, South-East Finland-Russia, Estonia-Russia, Latvia-Russia,
Lithuania-Russia, Poland-Russia. [12]
There are other important projects, such as the €100 million Civil protection project which aims to
protect the environment and population by increasing the country's resilience to numerous external
factors; cooperation in the Arctic Council, environmental protection and preservation projects in
the regions of northwestern Russia and northeastern Europe, the Northern Dimension, etc. [13]
Russia and the EU have collaborated in the
environmental field for more than 25 years. Despite the general deterioration of political
relations between Russia and the EU since 2014, environmental cooperation has never entirely
ceased