Sharp Drop in Russians’ Incomes Possible Due to Global Energy Transition

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Russians’ real disposable income may fall by 14 percent as countries strive to achieve carbon neutrality by 2050, according to German Gref, President, Chairman of the Board of Sberbank, during the session held within the framework of the Eastern Economic Forum, Vedomosti writes.

“What repercussions can we expect by 2035? These have budgetary and revenue implications,” he said.

“The population’s income, regrettably, we estimate that if nothing changes, up to 14 percent, and approximately 5 trillion rubles are budget losses, overall budget losses of the Russian Federation,” said the director of the credit institution… According to his presentation, 5 trillion rubles are budget losses from oil and gas earnings.

According to Sberbank researchers, Russia’s energy export losses may total $ 179 billion by 2035. At the same time, by 2050, output of oil and gas condensate will be reduced by 72%, gas by 52%, and thermal coal by 90%.

Previously, at the end of July, Anatoly Chubais, the President’s Special Representative , stated that losses to the Russian economy due to the refusal of the world’s leading countries to use raw materials based on hydrocarbons could amount to 10% of GDP.

He stated at the time that the “global energy transition” – “reduction of CO2 emissions in the economy” – is linked with an improvement in efficiency, particularly energy efficiency, for the majority of states.

At the same time, it is a question of survival for Russia, whose federal budget earnings from hydrocarbons surpass 40%, without the participation of presently essential industries. In this regard, the Russian economy is “far more susceptible,” he said.

Simultaneously, Chubais said that the global energy transformation is linked with new opportunities for Russia. To begin, he claims that the nation has “great possibilities” to expand hydrogen supply in contrast to other states at the cost of production capacity and the pipeline infrastructure. Second, he said, Russia has a significant quantity of climatic resources for hydrocarbon sequestration.