The Arctic fuel spill is a wake-up call for Russia

If Russia needed to be reminded of the costs of ignoring climate change and the transition to cleaner energy, 2020 has delivered. A devastating Arctic fuel spill appears to have been caused by melting permafrost. A heatwave has rekindled Siberian wildfires, which last year burned through 16 million hectares and choked cities. Oil, meanwhile, is still convalescing after sinking to its lowest price in more than two decades.
Unfortunately, the alarm isn’t ringing yet in the Kremlin. President Vladimir Putin, whose power base relies on hydrocarbons, has vacillated on global warming over the years. He has moved on from outright skepticism, but he remains intrigued by the potential profit from a thawing Arctic and unpersuaded by climate-change prevention measures that would carry heavy short-term costs.
The pandemic hasn’t changed things. Russia’s efforts to stimulate post-coronavirus growth are cranking up, but the country’s fiscal boost is avowedly brown, not green. It’s a choice that stores up environmental, economic and political risks for the future.
The stakes are high. Russia is the second-biggest oil exporter and the fourth-largest carbon emitter. Despite a drop in emissions since 1990, when Soviet industry crumbled, its economy still uses up a disproportionate amount of energy, more than twice the global average per person. More important, the climate crisis is having a profound domestic impact. Permafrost, the frozen layer that covers two-thirds of the country, is thawing, releasing ancient carbon into the atmosphere and threatening roads, railways and homes built on the once-solid base. On top of all this, the recent coronavirus lockdowns have given Moscow a glimpse of economic life without oil demand. Time for a green-tinged stimulus to get the economy out of its rut? Not quite.
In fairness, other countries have a mixed approach to eco-friendly fiscal boosts. While the European Union wants to use its $825 billion Covid-19 recovery fund to foster green spending, the US has extended a helping hand to its oil and coal suppliers. China — which backs international emissions goals — made supportive noises about cleaner coal in Premier Li Keqiang’s speech at the National People’s Congress last month, but there was nothing explicit on the climate.
Russia has, however, been moving more slowly than the pack. A draft low-carbon development plan published in March, the first to take a long-term view to 2050, focuses on energy efficiency without providing for a shift away from fossil fuels. It pledges to cut greenhouse gases by a third by 2030 when compared with 1990 levels, a target that still leaves room for an increase in current emissions.
Domestic pressure for change is minimal. The natural resources industries have huge clout, with entire regions reliant on oil, gas and coal employment. Putin, averse to radical shifts anyway, has been left vulnerable by the Covid-19 crisis, and he’s even more unwilling than usual to risk instability, unemployment or unhappiness among the country’s resource-dependent elite.

—Bloomberg