Climate Change Will Reshape Russia

When U.S. policymakers ponder Russia’s trajectory, they tend to focus on the leadership and longevity of President Vladimir Putin and the nature of his regime, on the Kremlin’s growing authoritarian tendencies at home and the poisoning of opposition figures, on Russia’s nuclear arsenal and cyber capabilities, or on Russia’s projection of power abroad, from election interference to military interventions in Ukraine and Syria. Rarely does climate change make the shortlist. Yet it is climate change, as much as any one politician or set of policies, that will exert the strongest force on Russia’s strategic future, reshaping its politics, economy, and society for decades to come.

Russia is warming 2.5 times faster than the rest of the world. In 2020, regions across Russia have experienced the hottest temperatures on record, contributing to forest fires that burned through acreage the size of Greece and emitted one-third more carbon dioxide into the atmosphere than in 2019 (Russian forests account for one-fifth of the world’s total). Flash floods in Siberia destroyed entire villages and displaced thousands of residents. Snow coverage was at a record low in 2020, and Arctic sea ice coverage shrank to its second-lowest extent in over 40 years. 

Permafrost, which covers nearly two-thirds of Russian territory, is rapidly thawing. More dramatic freeze-thaw cycles in the subsoil are eroding urban infrastructure in Russia’s Arctic cities, home to over 2 million people, and pose a mounting risk to Russia’s 200,000 kilometers of oil and gas pipelines, not to mention thousands of miles of roads and rail lines bridging some of Russia’s widest rivers. Permafrost thaw recently toppled a diesel storage tank near the Arctic city of Norilsk, spilling 21,000 tons of diesel into the Ambarnaya river and surrounding subsoil. It has been linked to outbreaks of anthrax and the discovery of vast methane craters. At its current rate of thaw—about 1 degree Celsius per decade—Russia’s permafrost layer will stop freezing completely in three decades. This could result in a potentially catastrophic, one-off release of carbon into the atmosphere which will no longer be Russia’s problem alone. According to one study, a 30 to 99 percent reduction in near-surface permafrost would release an additional 10 to 240 billion tons of carbon and methane into the atmosphere and potentially put the globe “over the brink” by 2100. Russia is already the fourth-largest emitter of greenhouse gases, accounting for 4.6 percent of all global emissions. Its per capita emissions are among the highest in the world—53 percent higher than China, and 79 percent higher than the European Union.

Dramatic shifts in global weather patterns, accelerated by warming Arctic waters and a diminishing ice cap, are expected to increase droughts in Russia’s rich southern agricultural “bread basket” regions encompassing Stavropol and Rostov. This could pose food security risks and threaten a primary Russian export: wheat. Though climate change will expand arable land in Russia in its northern latitudes, the northern topsoil tends to be thinner and more acidic than in Russia’s most productive southern regions and would not make up for its losses. In fact, arable land shrank by more than half to just 120,000 acres in 2017. In June of this year, regional officials in Stravopol, one of Russia’s major wheat regions, projected a remarkable 40 percent decline in wheat crop in 2020 as a result of droughts. This too has global implications: Russia is a core part of global food chains, accounting for 20 percent of global wheat exports, so climate disruption to Russian agricultural output will have strong effects well beyond Russia’s borders and budget coffers. As agriculture shifts north, scientists are concerned that the cultivation of carbon-rich soils will create a separate carbon feedback loop and expedite global warming.

The Economics of Climate Change in Russia

The threat to the Russian economy from climate change is twofold. An increase in droughts, floods, wildfires, permafrost damage, and disease could lower GDP by 3 percent annually in the next decade, according to Russia’s Audit Chamber. Climate damage to buildings and infrastructure alone could cost Russia up to 9 trillion rubles ($99 billion) by 2050, according to Deputy Minister for the Development of the Russian Far East and Arctic Alexander Krutikov.

Meanwhile, Russia’s overreliance on hydrocarbon production is a conspicuous vulnerability as the world shifts toward low-carbon sources of energy and carbon neutrality. Natural gas and Arctic liquified natural gas may serve as bridge for Russia into a lower-carbon future, but global demand for gas is expected to be in sharp decline by mid-century. Russia’s top-down federal policy strongly favors state-led and managed industrial oil and gas giants. Though Russia has immense potential as a source of renewable energy, the share of renewables in Russia’s energy mix is negligible—under 0.1 percent for wind, solar, and geothermal—and there are no clear plans to invest significantly in their growth. Nor do current strategy documents foresee a major growth in nuclear and hydropower, which currently account for 36 percent of Russia’s electricity mix but under current plans will only climb to 43 percent by 2050. (To limit global warming to 1.5 degrees Celsius, renewables must account for 70-85 percent of global electricity by 2050.)

How Is the Russian Government Responding?

Russian climate policy at the federal and regional level is nascent and is handicapped by thinly stretched budgets. The need to respond to more environmental disasters with less money is becoming a growing friction point between regional governments and Moscow. An expected increase in extreme weather events and infrastructure degradation requires proactive planning and significant long-term investments into infrastructure modernization and resilience, forest management, and other adaptive measures, but regional governments are chronically under resourced and heavily in debt (some regions have begun to fall into bankruptcy). A reduction in international hydrocarbon demand will further constrict the federal budget just as the material costs of climate change will begin a parabolic ascent. This shrinking budget is abetted by chronic corruption and public service mismanagement—issues which, unlike climate change, are politically front and center in the minds of Russians. All of these dynamics fuel a very public blame game between regional political elite, business, and federal authorities over who bears the financial and moral responsibility for managing the consequences of climate change.

Putin himself has offered mixed messaging on global warming, acknowledging for the first time only in October 2019 that global warming was a result of human activities, but just a month later he cast doubt on the prospects of a global shift to renewable energy, stating, “When these ideas of reducing energy production to zero or relying only on solar or wind power are promoted, I think humanity could once again end up in caves, simply because it won’t consume anything.”

Though a growing chorus of officials are voicing concern about the economic consequences of a changing climate for Russia, the prevailing view remains one of passive resignation or misguided optimism. Some officials recognize the reality of climate change but contend that it is beyond Russia’s means to resolve and that Russia should therefore extract revenue from its abundant hydrocarbon resources while there is still global demand. Others believe Russia will benefit economically from warmer temperatures by way of an increase in arable land and greater use the Northern Sea Route for commercial shipping—a bet that makes dangerous assumptions about the ability of Russia to replace energy exports with agriculture and presumes as-yet-unproven sustained commercial interest in an Arctic shipping route.

This policy ambivalence is encapsulated in Russia’s approach to the Paris climate accord. Russia signed on to the agreement in 2019 in an apparent recognition of the threat, but because it used 1990 as its benchmark, a year when the country was still part of the Soviet Union and emitted nearly 2.4 billion tons of carbon, Russia can effectively increase its emissions over the next decade and still meet its 30 percent reduction target. Russia’s emissions are set to rise through the next decade, according to a Ministry of Economic Development strategy document published in March 2020.

Legislation introduced in 2019 as part of Russia’s ratification of the Paris Agreement would have instituted emissions quotas and carbon pricing, but lobbying efforts by the influential Russian Union of Industrialists and Entrepreneurs significantly diluted the bill, resulting in weaker provisions on emissions reporting and the elimination of a national carbon trading system and penalties for polluters.

How Is Russian Society Responding?

The environment is front of mind for Russians. According to a January 2020 survey by the independent Levada Center, environmental degradation was named the biggest threat to humanity in the twenty-first century (48 percent), followed by international terrorism (42 percent) and wars (37 percent). Of Russia’s environmental challenges, respondents viewed air pollution as the most important in a year that set new records for instances of hazardous air quality in Russia, due in part to wildfires and industrial pollution.

Yet the immediacy of local environmental challenges in Russia—from air pollution to waste management practice to wildfires—has not translated into broader apprehension about global warming or activism to change public policy. An April 2020 Ipsos survey found that only 13 percent of Russians ranked climate as the most important environmental issue facing their country—well below the world average of 37 percent. Russians were also comparatively less concerned about future energy sources and choices and held the lowest overall levels of support for government action to combat climate change. One contributing factor to this seeming contradiction is likely the tightening of Russia’s civic space. The imposition of “foreign agent” laws has hollowed out environmental nongovernmental organizations (NGOs) in Russia and muffled voices sounding the alarm on global warming. Public support for environmental NGOs has declined in recent years even as a growing number of Russians are ready to protest over local environmental issues.

Economic realities also contribute. Years of anemic economic growth, the dual shocks of Covid-19 and low oil prices, and a tight-fisted approach to fiscal stimulus has reduced the average Russian’s household wealth. The Kremlin is prioritizing jumpstarting the economy by supercharging its hydrocarbon and industrial model. For many Russians who are just getting by financially, issues such as price hikes, unemployment, and inequality supplant concern over climate change.

Despite a more repressive political climate, there has been an uptick in environment-related protests in recent years. In April 2019, thousands turned out in the Arctic region of Arkhangelsk to protest the construction of a new landfill for Moscow’s ballooning waste. That summer, over 2,000 people turned out in the Ural city of Yekaterinburg to protest the construction of a church in one of the city’s few remaining green spaces. More recently, in Bashktorstan, in Russia’s southern Urals region, protests erupted over a local company’s plans to mine a rare limestone hill regarded as sacred by local residents.

In general, the landscape for environmental activism in Russia is more fluid and decentralized than in the West, with informal protest groups springing up around specific, local issues and then dissipating. But though protests have been local, it is not coincidental that Russia’s Arctic, Siberian, and Far East regions—where the impacts of climate change will be concentrated—are also bearing the brunt of chronic economic underdevelopment. Importantly, these same regions are traditionally more independently political minded and less supportive of Kremlin-backed initiatives.

Change Is Coming to Russia Externally

Although many Russian officials will continue to emphasize the economic opportunities of climate change and downplay its consequences for Russia, they are growing concerned about the sweeping changes being made to the climate policies of major export markets, particularly the European Union, with its ambitious plans for a New Green Deal and target for carbon neutrality by 2050. An EU plan to introduce a carbon border adjustment tax, which in a baseline scenario would cost Russian exporters 33 billion euros by 2030, has forced Russian firms to confront the reality of a global shift toward low-carbon development and the rising the cost of their emissions. China, meanwhile, has pledged to be carbon neutral by 2060. A new economic reality is gaining a toehold: in December 2020, Deputy Finance Minister Vladimir Kolychev acknowledged that global peak oil demand may have passed and indicated his ministry was preparing for extended lower budget revenues (oil and gas sales account for roughly one-third of federal budget revenue).

The Russian energy and industrial lobby remain influential voices against carbon emission quotas and are a primary cause of domestic climate policy stasis, but a growing number of Russian companies, including some hydrocarbon producers such as Novatek and more internationally exposed firms such as Lukoil, are moving ahead of the government to cut emissions and address sustainability issues. They have been given a push by international financial institutions and growing investor requirements for environmental, social, and governance (ESG) metrics. Some of Russia’s largest companies are making expensive investments into improving their sustainability ranking as low scores hit others in the pocket. Polyus, Russia’s largest gold producer, and Novatek were upgraded to an ESG ranking of “A” in 2020—ahead of many industry peers.

Change Has Already Arrived

Climate change will continue to compel change within Russia whether its leaders acknowledge the issue or not. The most immediate and significant thrust for change within Russia will come from the outside, as major energy export markets accelerate their environmental policies. This poses an existential threat to Russia’s economic model of hydrocarbon and mineral export, a threat heightened by years of weak domestic growth and a global economy suppressed by the pandemic. But change is also occurring from within, as climate-linked environmental disasters take their toil and as scarce state resources fail to address the growing frequency and magnitude of infrastructure decay, wildfires, local pollution, and other climate-related challenges, fueling protests and increasing tensions between regional governors and Moscow. The Russian Arctic, in particular, will be a case study in how climate change, regional political dynamics, and Russia’s economic ambitions interact, as businessmen, regional officials, and federal ministers, including key members of the Kremlin’s inner circle, jockey for state development resources but defer responsibility for funding disaster recovery and climate resilience. Our research and analysis must determine how climate change and climate policies—both internally and externally—will shape Russia’s future, and, in the near term, how the Kremlin and its fossil fuel export-based economy will—or will not—respond.    

Cyrus Newlin is an associate fellow with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Heather A. Conley is senior vice president for Europe, Eurasia, and the Arctic and director of the CSIS Europe, Russia, and Eurasia Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2021 by the Center for Strategic and International Studies. All rights reserved.

Heather A. Conley

Cyrus Newlin

Cyrus Newlin

Former Adjunct Fellow (Non-resident), Europe, Russia, and Eurasia Program