1. Sergey Paltsev Massachusetts Institute of Technology Low-Carbon Russia: Myth or Reality? Moscow, Russia January 15, 2015

2. http://globalchange.mit.edu/ Setting 2 Russia’s share in global energy use – 5.5%, in global GHG emissions – about 4%. Low-Carbon Options: Nuclear, Hydro, Wind, Solar, Biomass, CCS 2011 global shares of energy use: Oil – 31%; Coal – 29%, Natural Gas – 21%; Bioenergy – 10%, Nuclear – 5%; Hydro – 2%; Renewables – 1%. 2011 Russia’s shares of energy use: Natural Gas – 54%; Oil – 20%, Coal – 16%; Nuclear – 6%, Hydro – 2%, Bioenergy – 1%.

3. http://globalchange.mit.edu/ Setting: Energy Intensity - Energy Efficiency 3 Source: MIT Energy and Climate Outlook (2014) While energy consumption will increase over time, energy use per unit of GDP generally decreases about 40% from 2010 to 2050. This reflects the improvement in energy-efficiency and rising energy prices caused by resource depletion and carbon policies.

4. http://globalchange.mit.edu/ Why to move to low-carbon? 4 Source: MIT Energy and Climate Outlook (2014)

5. http://globalchange.mit.edu/ Climate goals – which one? 5 Expected GHG Emissions from COP-21 Nature (2014), 514, 30-31. Source: MIT Energy and Climate Outlook (2014)

6. http://globalchange.mit.edu/ Russia’s GHG Emissions 6 Data: 1990-2012 UNFCCC 25% - 2013 President‘s Decree 752 40% - Comparable to the proposed EU reduction for 2030 Reference, Measures, Additional Measures – from Rosgidromet submission to UNFCCC 25 % Reductions from 1990 GHG including Land Use (Forestry change) – from Blue Curve. Land Use and Forestry Change Emissions are more uncertain. Projections for GHG are without Land Use here.

7. http://globalchange.mit.edu/ Projections 7 Pages 153-169 http://www.cenef.ru/file/CB-LCE-2014-rus.pdf 178 pages

8. http://globalchange.mit.edu/ GHG and GDP Growth Projections for Russia 8 GHG Emissions Impact on Russian economy: more expensive energy and reduction in energy exports MIT EPPA Model: Reference Scenario and Climate Stabilization Global, Economy-Wide Model, captures impact on Economy. 2030 Policy Cost: $60 billion Real GDP growth – 5-year average

9. http://globalchange.mit.edu/ Energy Use in Russia 9 Note: These results are based on a stringent climate policy and the same carbon price in all countries (2030 - $75/tCO2, 2050 - $165/tCO2). The results depend on emission burden sharing between countries. With different allocation the impact might be less dramatic, but a direction of the changes is the same. Russia is affected by higher energy costs for consumers and a loss of revenue from oil and gas exports. Reference 2C Climate Policy Source: Paltsev and Kalinina (2014)

10. http://globalchange.mit.edu/ Move to low-carbon energy 10 ~ 3°C Based on AR5 WGIII Figure 6.7 Low climate stabilization scenarios are dependent on decarbonization

11. http://globalchange.mit.edu/ Plenty of carbon in the ground 11 Based on SRREN Figure 1.7

12. http://globalchange.mit.edu/ Rising GHG emissions in no-policy scenarios 12 Based on AR5 WGIII Figure TS.17

13. http://globalchange.mit.edu/ Mitigation requires dramatic changes 13 Based on AR5 WGIII Figure TS.17

14. http://globalchange.mit.edu/ No negative emission technologies in power sector imply more effort in other sectors 14 Based on AR5 WGIII Figure TS.17

15. http://globalchange.mit.edu/ Technology options are affected by policy instruments and cost assessments 15 Based on EPPA results for US CCSP (2007) 2004 – 2007 Optimism about CCS Short-term increase in gas By 2100 coal and gas with CCS and Renewables

16. http://globalchange.mit.edu/ Technology options are affected by policy instruments and cost assessments 16 Based on EPPA results for US CCSP (2007) 2014 – Less optimism about CCS, More optimism on nuclear, renewables and energy efficiency 2050 global shares of generation: 2007 study –- fossil – 75%, renewables – 15% 2014 study –- fossil – 30%, renewables – 50%

17. http://globalchange.mit.edu/ Technology options are affected by policy instruments and cost assessments 17

18. http://globalchange.mit.edu/ Different modeling groups - no dominant technology for de- carbonization 18 Based on AR5 WGIII Figure 7.11

19. http://globalchange.mit.edu/ Some low-carbon technologies can compete with conventional 19 Based on AR5 WGIII Figure 7.7

20. http://globalchange.mit.edu/ Moving to Low-Carbon: Example of the U.S. electricity price increases (relative to BAU) 20 EPPA: Increase in 2050 $60/MWh MIT JP Report 173 (2009)

21. http://globalchange.mit.edu/ How to move to low-carbon energy? 21

22. http://globalchange.mit.edu/ Conclusions 22 Aggressive climate stabilization targets (2-3C) require drastic changes in power generation technology options Future costs and the resulting technology mixes are uncertain Policy: Target emissions reductions from any source, rather than focus on boosting certain kinds of renewable energy.

23. http://globalchange.mit.edu/ Conclusions for Russia 23 Cost of climate policy is higher for a country that relies on fossil fuel exports and has a limited potential for renewable energy than for energy importing countries. Targets for GHG reduction should be milder than for other regions. Policy: Economic diversification (and nuclear energy expansion?). Low carbon Russia: nuclear, hydro, and electric cars? Not a near future. Carbon Policy: Carbon Tax Policy Design: “Хотели как лучше...”

24. Thank you http:// globalchange.mit.edu / Questions or comments? Please contact Sergey Paltsev at paltsev@mit.edu. 24