“In the medium-to-long-term, and with the necessary political backing, it would be important to increase fuel excise taxes and differentiate tax rates by the social and environmental cost of fuel use. Exploring the use of carbon taxes or other forms of carbon pricing harmonized within broader trade and technology agreements with prospective trading partners would also help,” the World Bank analysts say.
According to them, this could include, among other things, “eliminating nontransparent subsidies to producers and consumers, which can be regressive and distort incentives for efficient consumption, and replacing them with more targeted cash transfers to the poor and vulnerable.”
The World Bank notes that Russia can also engage more proactively in international climate policies to access support (technology, finance, and access to market) for asset diversification, as well as leverage such cooperation to facilitate global market access for knowledge-intensive and environmentally sustainable goods and services made in Russia. The recent adoption of the Paris agreement by Russia is a welcome step in this direction, the report says.
This year, Anatoly Chubais, chairman of Russian tech firm Rusnano, said on the sidelines of the St. Petersburg International Economic Forum that it was necessary to introduce a carbon tax in Russia to encourage industrial enterprises to reduce emissions.
Under the Paris Agreement, Russia plans to limit greenhouse gas emissions by 2030 to 70% of the 1990 level.