Low-Carbon Exports Reduce CO2 Emissions
Researchers at the HSE Faculty of Economic Sciences and the Federal Research Centre of Coal and Coal Chemistry have found that exporting low-carbon goods contributes to a better environment in Russian regions and helps them reduce greenhouse gas emissions. The study results have been published in R-Economy.
Yuri Simachev and Anna Fedyunina from the HSE Faculty of Economic Sciences, in collaboration with Sergey Nikitenko from the Federal Research Centre for Coal and Coal Chemistry, analysed the impact of Russian regions' trade in low-carbon goods (LCGs) on CO₂ emissions. LCGs include solar, wind, and hydrogen energy systems, energy-efficient industrial equipment, electric vehicles, and more.
The researchers analysed data from the Federal Customs Service, Rosstat, and the Central Bank of Russia from 2016 to 2021, examining the structure of international trade, CO₂ emissions across regions, gross regional product (GRP), investments, and other economic development indicators. For the study, the regions were categorised into quantiles based on the volume of low-carbon goods exported and imported.
The greatest volumes of LCG exports were found in regions with advanced industrial development, including the Ural Federal District (3.2% of total exports), the Siberian Federal District (2.1%), and the Southern Federal District (2.2%). The Far Eastern Federal District (1.6%) and the Central Federal District (1.1%) were identified as leading importers of LCGs.
The analysis revealed a nonlinear impact of low-carbon goods trade on CO₂ emissions, forming a U-shaped relationship between trade volume and emission reductions. In the initial stages, increased exports help reduce emissions by introducing innovative technologies and enhancing energy efficiency. However, over time, the trend changes, and emissions decrease at a slower rate.
Regions with low export levels, classified in the first and second quantiles, include the republics of the North Caucasus, the oil-producing regions of the Urals, and southern Russia. In these regions, a 1% increase in LCG exports results in a 0.13–0.19% reduction in CO₂ emissions.
In regions with advanced manufacturing industries, such as the Ulyanovsk and Novgorod regions, Tatarstan, and Bashkortostan, this effect is most pronounced, with each percentage increase in exports associated with a 0.23–0.29% decrease in emissions. Once per capita exports of low-carbon goods in a region exceed approximately 2,500 roubles, the reduction in emissions slows to 0.18%, as seen in Moscow, St Petersburg, and the Sverdlovsk region. The reason is that an excessive volume of LCGs in the export structure leads to market saturation in the long term, while further increases in trade are not matched by equivalent investments in the modernisation of production facilities.
In contrast, LCG imports have little to no effect on emissions. Only in regions with the highest share of LCG imports in trade turnover does a 1% increase in imports lead to a 0.19% reduction in CO₂ emissions.
Thus, the study highlighted significant regional differences that should be considered when developing industrial policies. To optimise the impact of emission reductions, it is essential to encourage the export of low-carbon technology goods in regions with a strong industrial base, promote innovative production, and consider the specific characteristics of the regional economy. The state is already actively supporting this sphere.
Anna Fedyunina
The co-authors have begun analysing measures to regulate international trade in non-carbon technologies, with tariff regulation being the most common approach. They emphasise that in Russia, these measures should consider the country's specific characteristics. 'Russia actively imports technological equipment for the production of low-carbon goods; therefore, trade liberalisation measures are focused on reducing the tax burden on imports. This includes expanding the list of imported equipment exempt from value-added tax. Additionally, Russia's priority is to increase export competitiveness. In this regard, subsidising after-sales services has become the primary tool for supporting exporters,' explains Anna Fedyunina, Assistant Professor at the HSE Faculty of Economic Sciences.
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