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№ 2

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OVERVIEW

pdfJohn Laitner

8-17

 

Abstract

There is increasing evidence that climate change is a growing social and economic burden. Moreover, the 17 Sustainable Development Goals (SDGs) are at risk of falling short of their intended tar­gets. The difficulties will only be made worse as the climate and economic burdens grow. A growing literature suggests that the problems largely stem from the non-productive use of resources which erode our social and economic well-being—especially over the long haul. These huge inefficiencies include the non-productive use of capital, materials, water, food, and especially energy. One as­sessment notes that, depending on how we ignore global ecosystems or, more hopefully, how we might build up a more healthy and resilient environmental capacity, “the global value of ecosystem services can decline by $51 trillion/yr or increase by $30 trillion/yr” by the year 2040 (with values in 2007 dollars). At the same time, moving to a smarter and more productive use of all resources requires a larger number of institutional changes. Such changes range from the use of new metrics to assess future opportunities to an array of policies and perspectives that promote these changes. In this special issue we review a number of different ways that institutional changes might create opportunities in which all resources might be managed more productively. While no single special issue can cover all elements of the necessary institutional changes, nor can even a series of books on the topic, this is another step forward to open up thinking more along the lines of human and cultural dimensions toward a better understanding of how resources might be more productively used for social and economic benefits.

Keywords: resource productivity, energy productivity, energy and climate policies, institutional change.

JEL: O21, O31, Q20, Q43.

John A. “Skip” Laitner. Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation);

Economic and Human Dimensions Research Associates (5751 North Kolb Road, Unit 23203, Tucson, AZ 85750, USA).

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ROLE OF NEW METRICS

pdfStepan P. Zemtsov, Vera A. Barinova, Vera M. Kidyaeva, Tatiana A. Lanshina
18-47

 

Abstract

Climate change as well as ecological and social problems requires new goals and instruments of economic policy, based on the principles of sustainable develop­ment. However, over the past 20 years, an increase in energy prices has resulted in the raw material growth model prevailing in Russia. Has this growth led to sustainable regional development? We propose an approach to evaluating eco­logical efficiency of the Russian regions as the ratio of the output of non-primary goods and services to the input of resources (labor, capital, raw materials, and environmental costs). This is a new indicator of the quality of economic growth. The sustainable development model, combining growth of GRP per capita and ecological efficiency, has been observed for more than half of the period in most regions. The eco-efficiency of the average region has been growing since 2003, except crisis periods, following an increase of the services sector share and the closure of inefficient pollution-intensive factories. According to the econometric results, ecological efficiency was growing faster in densely populated regions with a high share of high-tech services, investment attractiveness and intensive tech­nology implementation (Moscow; Saint Petersburg; Sverdlovsk, Tomsk, Belgorod and Kaliningrad regions etc.); it decreased in most northern and Siberian regions. Great potential for raising eco-efficiency remains in most regions. In general, the results of regional development in Russia do not contradict the principles and goals of sustainable development (SDGs), although it was largely achieved due to the system of inter-budget transfers, distributing the oil rent surplus among the regions. In the future, an increase in investments in the non-primary sector, en­ergy efficiency and public transportation will be required. Corresponding changes can be accelerated in the context of an emerging economic crisis caused by the pandemic and falling oil prices.

Keywords: regional development, sustainable development, Russian regions, envi­ronmental problems, data envelopment analysis, Kuznets curve.

JEL: R11, Q57, O49, Q32.

Stepan P. Zemtsov, Cand. Sci. (Geogr.). Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Vera A. Barinova, Cand. Sci. (Econ.). Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Vera M. Kidyaeva, Cand. Sci. (Geogr.). Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation); Lomonosov Moscow State University (GSP-1, Leninskie Gory, Moscow, 119991, Russian Federation).

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Tatiana A. Lanshina, Cand. Sci. (Econ.). Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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pdfMarine Cornelis
48-67

 

Abstract

Policies, especially in the European Union, encourage government and privately funded programs to engage in “energy efficiency first” strategies. Those policies lead to the moderation of energy demand and are long-term solutions that not only protect households from price fluctuations and energy poverty, but also allow people to reduce their environmental footprint and save money in the long term. Energy poverty usually occurs when a household is unable to secure a level and quality of domestic energy services—space cooling and heating, cooking, appliances, information technology etc.—sufficient for its social and material needs. In the Global North, energy poverty is generally attributed to internal and external factors such as low incomes, energy-inefficient homes and high energy prices, while in the Global South, the infrastructural lack of access to more technologically advanced energy carriers is the main culprit. Energy poverty in developing countries is gaining interest thanks to the seventh Sustainable Development Goal: Affordable and clean energy. Still, so far, in the European Union and in the rest of the world, little has been done to sew together the two concepts and include the most vulnerable part of the population in an approach that reconciles environmental and climate risks with social issues. In practice, energy poverty and efficiency agendas are rarely coordinated. Energy efficiency and a better pooling of the resources (known also as “sufficiency”) could lead to higher resiliency to the social and climate crisis.

Keywords: energy poverty, energy efficiency, Sustainable Development Goals.

JEL: Q56, Q49.

Marine Cornelis. Executive Director, Next Energy Consumer (Via Sant’Agostino 17, 10122 Turin, Italy).

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pdfJoshua Browne, Diego Villarreal, Klaus Lackner, Sarah Brennan
68-85

 

Abstract

Top-down approaches to reducing global carbon dioxide emissions have so far met with limited success, even though most countries accept the urgency of mitigating climate change and have en­tered into various agreements that should help reduce emissions. This article does not dismiss the importance of such “top-down” agreements for developing rational strategies to achieve declining total emissions, but it suggests a complementary approach to encourage immediate “bottom-up” progress on climate goals that do not need to wait for global cooperation. This paper develops a framework to identify free-riding behavior among countries that use three readily measured pa­rameters of the country’s economy: carbon intensity, rate of change of the carbon intensity, and per capita GDP. It then goes on to propose a simple formula to calculate trade sanctions against a free-riding country that could be used in bilateral actions to incentivize carbon emissions reduc­tions. The paper argues that the value of the goods, the difference in carbon intensity between the importer and exporter, and the cost of carbon removal can be used to calculate the unfair trade ad­vantage of a free-riding country. The dynamics of the proposed framework are tested through three case studies, highlighting current free-rider behavior—based on historic emissions for the period 1991–2012; an alternate, hypothetical scenario whereby a subset of countries follow aggressive carbon emission reductions; and a 450 ppm stabilization scenario.

Keywords: climate policy, carbon pricing, free-rider, emissions trading, climate change.

JEL: Q38, Q41, Q56, Q54.

Joshua B. Browne, PhD (Earth & Environmental Engineering). Adjunct Professor, Department of Mechanical Engineering, Columbia University, (220 S.W. Mudd Building, 500 W. 120th Street, New York, NY 10027, USA).

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Diego Villarreal, PhD (Environmental Engineering). Bravos Energia (Iztaccihuatl 25, Hipodromo, Cuauhtemoc, 06100, Mexico City, Mexico).

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Diego Villarreal, PhD (Environmental Engineering). Bravos Energia (Iztaccihuatl 25, Hipodromo, Cuauhtemoc, 06100, Mexico City, Mexico).

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Sarah Brennan. Lenfest Center for Sustainable Energy, Columbia University (1038 S.W. Mudd Building, 500 W. 120th Street, New York, NY 10027, USA); Huron Street Solutions, LLC (149 Huron Street, Brooklyn, NY 11222, USA).

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EXPLORING NEW OPPORTUNITIES

pdfJohn Laitner, Oleg Lugovoy, Vladimir Potashnikov
86-105

 

Abstract

With the new Paris climate agreement, 185 of 197 nations have committed to lower emissions of planet-warming greenhouse gases. The intent is to limit global temperature growth within 2 degrees Celsius (°C), with a hopeful target of 1.5°C. At the same time, a special report from the International Panel on Climate Change (IPCC) indicates that large emission reductions, in fact, must be achieved by 2030 if the temperature increase is to remain below 1.5°C. This goal requires every country to radically cut their greenhouse gas emissions by rebuilding both their energy supply and end-use sectors. Even bigger challenges confront those countries which export fossil fuel resources, as they must also find new sources of economic activity to replace revenues that will be lost from the significantly reduced energy sales. The overall economic impact of this transformation is hard to quantify. On the one hand, decarbonization requires an initial set of large-scale policy, program, and research and development expenditures. It will also entail higher upfront investments in energy efficiency and alternative energy resources. Based on conventional wisdom, these outlays will create an initial burden on the economy. On the other hand, the additional infrastructure investments will also stimulate economic activity, reduce future energy expenditures and also provide an array of other non-energy benefits. In this paper, we propose a thought experiment that explores the idea of prospective positive net economic impacts of decarbonization strategies for an energy-producing nation. Our results suggest that the positive productivity benefits of decarbonization strategies can overcome negative costs in both the short and long terms. We also note additional effects that are consistent with the officially announced long-term goals of modernization and reducing the Russian economy’s dependence on revenues from energy and raw material exports.

Keywords: economy, climate change, energy efficiency, renewables.

JEL: Q50, Q54, Q49, Q20.

John A. “Skip” Laitner. Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation); Economic and Human Dimensions Research Associates (5751 North Kolb Road, Unit 23203, Tucson, AZ 85750, USA). E-mail:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Oleg V. Lugovoy, Cand. Sci. (Econ.). Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation); Environmental Defense Fund (257 Park Avenue South, New York, NY 10010, USA). E-mail: olugovoy@ ranepa.ru

Vladimir Yu. Potashnikov. Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation). E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

pdfVladimir Kh. Berdin, Alexey O. Kokorin, Vladimir Yu. Potashnikov, Grigory M. Yulkin.
106-135

 

Abstract

The paper discusses the support mechanisms of renewable energy sources (RES) and the progress made in leading countries as well as identifies the primary eco­nomic and social goals of the given process. It is shown that RES development co-benefits with national long-term goals on CO2 emissions in the energy sector and contributes significantly to their achievement. An analysis of Russian activi­ties leads to the conclusion that the country has been undertaking considerable efforts in keeping up in line with the global trend but it has fallen well behind better performing economies in the scale of RES support and manufacturing. A number of disadvantages of the current national system of RES support by 2024 have been identified and followed by proposals of further improvement aimed at ensuring competitiveness of Russian equipment on the domestic market, and later global market. The system of support should be focused on effectiveness of power generation; include support for export contracts; and prioritize large production volumes, thus reducing prices and facilitating localization. Long-term develop­ment prospects of the Russian solar and wind generation have been estimated for the period up to 2040–2045. The RU-TIMES model has been used to calculate the effects for two versions of government support: introduction of a fixed extra charge to the market price of generation (feed-in premium), and subsidies for investments in construction. According to the model estimates, an extra charge of 1.0 ruble/kWh would allow an increase of the total installed capacity of solar and wind power plants by 40 GW within 5–10 years. Their share in electricity genera­tion could be brought up to 20%, and up to 35% by 2040–2045. The same result could be achieved by subsidizing investments at the rate of about 300 USD/kW (considering government spending of less than USD 15 billion, covering 20–25% of capital investments). Each of the support options reduces the total CO2 emis­sions from all types of fossil fuel combustion by 100–150 MtСО2/year.

Keywords: renewable energy sources, climate policy, UN Paris Agreement, CO2 emis­sions.

JEL: Q54, Q58, Q47.

Vladimir Kh. Berdin. International Sustainable Energy Development Centre Under the Auspices of UNESCO (ISEDC) (str. 2, 8/1, Kedrova ul., Moscow, 117292, Russian Federation).

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Alexey O. Kokorin, Cand. Sci. (Phys. and Math.). International Sustainable Energy Development Centre Under the Auspices of UNESCO (ISEDC) (str. 2, 8, Kedrova ul., Moscow, 117292, Russian Federation).

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Vladimir Yu. Potashnikov. Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Admi-nistration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Grigory M. Yulkin. International Sustainable Energy Development Centre Under the Auspices of UNESCO (ISEDC) (str. 2, 8/1, Kedrova ul., Moscow, 117292, Russian Federation).

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pdfMichael Brody, Bahtiyor Eshchanov, Alexander Golub
136-147

Approaches to Optimize Uzbekistan's Investment in Irrigation Technologies

ENSURING INSTITUTIONAL SUCCESS

pdfBenoît Lebot, Meagan Weiland
148-167

 

Abstract

In 2018 businesses, households and government enterprises throughout the global economy spent an estimated €7.4 trillion to meet the many demands for various energy services. Current projec­tions suggest that the present scale of annual expenditures may increase by more than 60 per­cent to €12.0 trillion by 2050 (with all costs expressed in real 2018 values). Although the global economy derives important benefits from the purchase of many energy services, the inefficient use of energy also creates an array of costs and constraints that burden our social and economic well-being. Among these costs or constraints are increased health costs, air pollution, climate change and a less productive economy—especially over the long term. Yet there is good news within the countless energy markets throughout the global economy. Whether improved lighting in homes and schools, transporting people and goods more efficiently, or powering the many industrial processes within any given nation, there are huge opportunities to improve the productive use of energy in ways that reduce total economic costs. And those same energy efficiency upgrades can also reduce greenhouse gas emissions that drive climate change, as well as lessen other impacts on both people and the global environment. However, as this manuscript suggests, it will take an adequately funded set of smart policies and effective programs, including a skilled work force, to drive the optimal scale of energy efficiency investments.

Keywords: energy efficiency, economy, energy policy, program costs.

JEL: Q49, D12, Q48, D24.

Benoît Lebot. Ministe're de l’Environnement (246 Boulevard Saint-Germain, 75007 Paris, France). E-mail:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Meagan Weiland. SCIENCE Magazine (1200 New York Avenue, N.W., Washington, DC 20005, USA). E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it