It will require investments of $1.1tn to reduce greenhouse gas emissions from the Russian economy by 50% before 2060, says VTB Capital.
VTB Capital has analysed the cost of reduction, capital expenditures and the pressure on prices in individual sectors, as well as how emissions can be reduced in the least costly way and, accordingly, where the bulk of these investments can be directed.
According to VTB Capital, a 25% reduction in emissions will cost Russia 43 trillion rubles ($575.1 bn, or 1.3% of GDP annually). To reduce emissions by 50%, it will come at a cost of 86.6 trillion rubles ($1.1 tn or 2.7% of GDP annually). Reducing emissions by 100% by 2060 would require costs in the amount of 479.8 trillion rubles ($6.41 trn or 15% of Russia’s annual GDP).
The least costly option for decarbonisation per unit of emissions includes waste disposal, methane emissions reduction, decarbonisation of the electric power supply as well as forestry projects. Together, these industries account for 59% of the total emissions in Russia, and their decarbonisation will cost 102.7 trillion rubles ($1.4 tn). Transport remains the most expensive sector for decarbonisation, followed by the cement industry and the production of iron ore and steel.