Path to Net Zero - Russia and the Path to COP26

During the Glasgow conference, Russia could announce a new pledge to reach net zero by 2060. However, this will depend on several important issues, including the recognition of the absorption capacity of Russian ecosystems, technological neutrality for green projects (i.e. the recognition of nuclear and hydro) and the integration of Russian carbon regulations and green financing with international standards. Additional pledges from other countries will also be important for changes in global demand for fossil fuels in the longer term. In our view, the new low-carbon strategy that the Economy Ministry submitted to the government earlier this week will have a very limited impact on the economy in the short and medium terms, but the utilities sector will undergo major changes after 2030.> Russia to become carbon-neutral by 2060 at the latest. This is what President Vladimir Putin said during a recent energy forum in Moscow. The Economy Ministry's draft low-carbon economic strategy through 2050 assumes slightly higher greenhouse gas emissions until 2030 but then an 89% drop from the 1990 level by 2050. > No short- or medium-term implications; electricity bills to rise later. Based on the draft strategy, decarbonization will be gradual at first, with a ramp-up only after 2030. The utilities sector will see the most change, with the addition of substantial renewables, hydro and nuclear capacity, putting a greater burden on electricity consumers.> IEA: World is behind net-zero targets. Under the Announced Pledges Scenario, which takes into account all pledges at the country level, emissions will drop 40% by 2050. However, even this is not enough to limit global warming to less than 2.0 degrees by 2100. Meanwhile, under the Stated Policy Scenario, which includes only already in-place policies and ones currently being developed, the target is even further out of reach. We expect more pledges to be announced at Glasgow.> Technological advances needed to transform energy systems. Because supply and demand on the grid need to be in equilibrium at any moment, a backup must be in place to cover for the vicissitudes of renewable output. New technologies are needed to facilitate both short- and long-term electricity supply. A big part of the emissions reduction in the IEA's Net Zero by 2050 scenario comes from technologies currently at the prototype stage.> Russia could have more time for economy diversification. The need for technological breakthroughs, currently lagging pledges and policies, and the unresolved issue of how to ensure the short-term stability of energy systems, in our view, will give more time for diversification of the Russian economy, a theme we discussed in depth in our June report, "Net Zero by 2050 to Drive Economic Diversification."