Since the Russian state budget is highly dependent on energy export revenues, a major change in this sector will have a negative impact in many other parts of the economy. Although Russia has plenty of potential for renewable energy, the country does not have a heavy focus on the sector at present and is therefore unlikely to pioneer technological development in the wind and solar industries. Perhaps not surprisingly then, although Russia is involved in international climate policy, it does not work to promote it.
Russia’s attitude towards Energy Transition is quite controversial: while acknowledging some of the key trends, the country is refusing to accept the consequences of its main driver—decarbonization—and is focusing only on attempts to develop technological expertise. Nonetheless, one area of competitive advantage in a decarbonizing energy world may be the potential for reforestation across Russia’s huge geography. Either use of reforestation as a carbon offset mechanism, for direct gain or to add “green value” to Russia’s hydrocarbon exports may become a growing theme over the next decade.
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