Transmission to a low-carbon economy and its implications for financial stability in Russia

Burova A., Deryugina E., Ivanova N., Morozov M., Turdyeva N.

Energy transition and climate policies associated with it are one of the major challenges for the Russian economy. We presented an approach to assess consequences of climate policy in Russia and evaluate the associated transition risks for the country’s financial system. In doing so we used a CGE model for the Russian economy and a financial model based on firm-level data. We show that both international and domestic climate policies effect financial stability of the Russian Federation. Effects of the international climate actions, summarized in NGFS’s Net Zero 2050 scenario, are bigger than effects of introduction of a domestic emission trading system with a reduction goal of the Intensive scenario of the Russian state strategy of low-carbon development.

Transmission to a low-carbon economy and its implications for financial stability in Russia