Gref said Sberbank had drafted and sent to the government a stress scenario of possible events in the Russian economy up to 2050 against the background of a world transition to a carbon-neutral economy and the introduction in Europe of a cross-border carbon tax.
In accordance with that scenario, Russia’s export losses could total about $4 trillion, oil production could fall to one-third of previous levels, oil exports could plunge to one-quarter or one-sixth of previous levels, the price of Urals oil could sink to $26 a barrel and the price of gas could be halved. Gross domestic product could decline by a third.
“A fall in revenues of 20 % for the export of hydrocarbon-intensive goods is possible by 2035. The energy transition would hit Russian exports, cutting them by $4.4 trillion over the next 30 years in the scenario of NZE (net zero emissions) 2050 – from $7.4 trillion to $3 trillion,” Gref told the Congress, organised by the Russian central bank.
“The decline in revenue from oil and gas to the 2035 federal budget could reach 63 %. As a result of lower demand and prices for oil and gas, the budget would see a shortfall of $97 billion in 2035.”
“If we stand by the current path of development, the country would be threatened by obsolete technologies and a loss of competitiveness. Over the next 30 years, up until 2050, Russia may need a minimum of $657 billion and up to $1 trillion in investment.”
On the other hand, Gref said, the world-wide energy transition offered new opportunities to Russia – one of which could be trade in carbon units that would allow the country to draw in up to 46 % of the needed investment.
“If the necessary measures are introduced to develop ESG (environmental, finance and corporate governance) financing, and create an internal market for carbon units, the earnings from sales of emissions quotas would form an alternative source of investment, which could be targeted on financing the decarbonisation process,” Gref said.
“And given the current price of carbon of $62 a tonne it is our estimate that about 46 % of the national programme for decarbonisation could be financed by payments for carbon units.“