Economic Ecology – or Laws against the Rich – in Action

Economic Ecology – or Laws against the Rich – in Action

The “сarbon tax,” the introduction of which is scheduled as early as 2021 and 2022, might put Russian companies working for export into losses in the amount of 33 to 50 bln euros in the period up to 2030.

Major Issues of “Economic Ecology”

If a product has a large carbon footprint, i.e., it was manufactured by a plant causing a large greenhouse gas emission, or if materials, components, energy or services triggering a large greenhouse gas emission are used in its production, the exporter will have to pay an additional tax. This money will be transferred to a global fund that finances various climate programs. The so called “heavy industry” and energy are the most important and vulnerable items in Russian exports. It can be assumed that Russia and China will always have a much larger carbon footprint rather than countries with less production and smaller energy sector. It turns out that this law does not concern climate changes only, but also affects market redistribution.

All these above-mentioned facts are already commonly known. Today, many people write articles on this acute issue where they try to assess the repercussions of the “carbon tax” for the Russian and world economy. At the same time, it is assumed that everything is correct as Russia is one of the parties to the Paris Agreement. There should be fight against climate change, and the reduction of greenhouse gas emissions should be reduced, too. It doesn’t matter if this is the essential cause of climate change or not.

It is necessary to consider this issue from a completely different perspective. Russia is the country with the richest ecosystem on the Eurasian continent and the world's donor of ecosystem services. It ensures the sustainability of both highly transformed ecosystems of European countries and the ecologically poor landscapes of Central Asia. At the same time, instead of gaining recognition of Russia’s role in the world ecological process, and all the preferences associated with it, the country finds itself “guilty” and obliged to pay for its “insufficiently ecofriendly production.” Moreover, the money received from this “carbon tax” will be used to improve the ecological conditions anywhere but in Russia. In other words, the country will finance its own increasing ecological underperformance. Thus, the focus will be placed on the interests of Europe's low-power ecosystems, rather than on the ecosystems of Siberia and the Arctic that are much more important on a global scale. This segregation in ecology is the law which was created by the minority and for the minority.

And here is the most important question. How come Russia has not paid due attention to the changes of rules in the global economy? And what can it do in the current situation?

How did it happen?

In Russia, environmental issues have never been the subject of either political or economic discussions. Until now, ecology has been perceived by many as a research subject in academic science that has no practical value. If there is any doubt, take a look at the financing of environmental studies and protected areas. For example, recall the Ekologiya [Environment] national project that was announced in 2018. It almost completely ignored all key issues of the world environmental agenda. Moreover, even the Ministry that was expected to implement it did not pay proper attention to it. In early 2020, the Accounting Chamber assessed the implementation of this project as “unsatisfactory.”

In contrast, the environmental issue started being raised in the European political arena back in the 1970s of XX century. The problems of reducing pressure on the environment and creating a system for controlling the human impact on the environment were highlighted in the programs of a number of politicians who realized the power of this “green” agenda in public opinion. Thanks to this fact, by the end of the XX century, Europe had turned its industrial “bad lands” into high-tech and relatively “clean” production facilities that are comfortable for urbanization. This has really improved the life conditions for millions of people. Thus, in the last decade, the environmental agenda has become one of the most powerful political tools. However, until recently, its economic impact has been mediated and, more likely, caused by the increasing political influence of “green” forces.

However, after the Paris Agreement was signed, the situation began to change. The pressure of “green” forces on the economy started growing. First, in the form of “environment-related” requirements at any cost, and then, in the form of legislative initiatives. The “carbon tax” which is currently in the spotlight was the first shot. In the immediate future, there will be the Convention on Biological Diversity (CBD) in Kunming in 2020 and conventions on water conservation and sustainable urban development. Sooner or later, all these global initiatives will turn into new economic realities that cannot be ignored.

Thus, the subject of ecology has expectedly moved from a purely political instrument to a tool of competition for economic supremacy. Those experts who are well-informed in terms of the environment and can gain points with the help of their knowledge are laying down the new rules of this “environmental game.” It is reasonable to expect that these legislators will inevitably adopt standards working in their favor.

It would be strange for the EU to turn a blind eye to the interest of European producers when developing its environmental strategy. That is why the new European environmental strategy considers the negative impact of carbon combustion, but absolutely does not consider the absorption of CO2 by millions of ha of Siberian taiga and swamps or the contribution to the conservation of natural carbon, which is made by the Russian Arctic zone.

Russia is practically not involved in this process. Moreover, it is not involved voluntarily. The country itself ignores changes in the global rules of the game in terms of environmental legislation. Russia does not participate in the global programs of long-term environmental monitoring. It does not defend its interests on international platforms. Take a look at the composition of Russian delegations to the events at the UN Center for Sustainable Development. After all, its initiatives have already resulted in the appearance of the Paris Agreement. It is possible to say that Russia’s inactivity and passivity confine it to playing by other countries’ rules in the world economy. Moreover, to play with a stripped deck.

So what can be done there?

Of course, there is always an option to simply ignore these solutions. For example, the USA has withdrawn from the Paris agreement, and that’s it. However, this is a dead-end method. The environment around us is changing. This is a fact. It doesn't matter why. What matters is that it is changing. It is impossible to ignore the environmental issue or the strong interest of the entire international community in it. This is a new reality that must be reckoned with, because this problem directly affects the lives of all people.

However, in order not to be among the outsiders, Russia needs to develop its own competencies in environmental issues within a short period of time. It will have to create an effective state system of environmental monitoring and regulation, to prove the enormous importance of our ecosystems in the global environmental field, and to initiate international environmental programs that take into account Russia's political, social and economic interests. Otherwise, Russia might face significant risks not only in terms of national economic security, but also in terms of losing influence in global politics in the 21st century.

The only way to maintain leadership on the global “environmental scene” and to stay in the group of countries that are forming new rules of the game is to have a sufficient evidential base for advancing arguments on the environmental issue and to be more than just a spectator but an active participant in all key ecological platforms, starting with the UN.

Unfortunately, it can be stated that Russia is significantly lagging behind as regards the accumulation of its own long-term environmental data. This makes the thesis about Russia’s significance on the environmental scene rather questionable. The latter can be easily illustrated by the example of the FLUXNET global network providing the points for long-term ecological observations.

In the most developed countries, there are hundreds of the observation points of this kind. Countries that have plans to create their own competence in environmental regulation have been developing their own networks extremely fast in the last decade. For instance, China. Even the U.S., the superpower that does not formally take part in many global environmental initiatives, implements them on its own territory and coordinates its activities with the world network. At the same time, there are few sites of this kind in Russia.

It is necessary to develop a system of comprehensive environmental measurement sites in Russia, including tools for instrumental and remote (space) observation and for analysis of environmental information. Additionally, it is essential to participate more actively in international programs. All this set of measures aims to achieve explicit recognition of the role and place of the Russian ecosystems in the global network of ecosystem services. Perhaps, this activity should become one of the new initiatives of the Ekologiya [Environment] national project for which funds have been already allocated. It is difficult to overestimate its value for protecting Russia's interests in the new environmental reality.

Simultaneously, it is necessary to purposefully ensure that highly qualified Russian experts with a sufficient scope of powers should be present on all platforms where new conventions and new environmental standards are being developed. As for the “carbon tax,” it is already necessary to discuss plans and stages of its implementation, as well as Russia’s participation in the distribution of finances from the fund where money will be remitted. Perhaps, in this way, it will be possible to reduce its impact on the country's economy, as well as to attract additional money for modernization and repair of water treatment facilities of the Russian largest enterprises.

It is obvious that ecology is turning into a new instrument in the fight for world influence, and Russia has all chances to use it. It is necessary just to attract the right expertise and funding. However, Russia has both.

New Way to Take Money Away from Russian Pensioners Gold Miners Are at Odds Over Company and its Moscow’s Branch