Abstract

The high energy intensity of the Russian economy has made it one of the world's largest emitters of atmospheric carbon. Macroeconomic models are used to assess the costs of reducing carbon dioxide emissions in Russia. The costs would be high, and would require major structural changes in the Russian economy.

Introduction

Growth in global fossil fuel consumption has led to the degradation of the atmosphere. Two particularly important strategies to counter these negative environmental trends may be identified: (1) a reduction of the energy intensity of the economy (the ratio of total energy consumption to gross national product, or GNP) and (2) a decrease of the share of energy consumption associated with fossil fuels, especially coal.

In the United States, Japan, and several other industrialized countries during the past two decades, energy consumption per unit of GNP has decreased on average by 1% to 2% annually. In the USSR and other countries where industrialization is in its initial phases, however, energy intensity has declined at a much slower rate. By 1990, consumption of primary energy per unit of GNP in the USSR was approximately 2.2 times higher than in the United States and 3 times higher than in Western Europe and Japan.

At least half of the reduction in energy intensity achieved in the United States and Japan can be attributed to structural changes in the economy that did not occur in the USSR (Kononov et al., 1992).