Greenhouse gas emissions regulation in fossil fuels exporting countries: opportunities and challenges for Russia

A carbon price is considered the most cost-efficient greenhouse gas emissions reduction tool often used as part of a climate policy. However, Russia and the other countries rich in fossil fuels tend to have weak incentives for proactive climate policies including carbon pricing which may lead to falling revenues in emitting industries. Can the carbon price be implemented as part of the development strategy in fossil fuel exporting countries, including Russia? The paper analyzes the variety of existing approaches to applying the carbon price across various energy exporting economies. The paper contributes to the existing literature with the analysis of challenges and opportunities of carbon pricing in these countries and proposes key principles of a viable carbon pricing system in Russia. These principles are (a) balanced emissions coverage and support of vulnerable industries and social groups, (b) fiscal neutrality, (c) gradualness of implementation and (d) use of carbon offsets.