Investing.com - Financial Markets Worldwide

Please try another search

EconomyDec 10, 2021 11:31AM ET

© Reuters. FILE PHOTO: A participant stands near a logo of World Bank at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo/File Photo

MOSCOW (Reuters) – The Russian economy can easily weather the carbon border tax as proposed by the European Union in July 2021, the World Bank said on Friday, calling on Moscow to take cooperative action along the global path to a green transition.

The EU proposed a Carbon Border Adjustment Mechanism (CBAM), or CO2 tariff, on polluting goods from 2026, which think-tanks said could lead to increased fee charges on products from Russia, mainly on metals and fertilisers.

“Even if Russia continues its current growth model, the economy-wide macroeconomic effect of EU CBAM would be negligible to small depending on its design,” the World Bank said in a report on risks and opportunities of the green transition.

“Even if the U.S. joins the EU in introducing a carbon border adjustment, Russia’s losses will increase only negligibly.”

The World Bank lowered Russia’s economic growth forecast earlier this month, highlighting risks related to the green energy transition among others, including geopolitics and the COVID-19 pandemic.

After shrinking by 3% in 2020, its sharpest contraction in 11 years, the Russian economy is set to grow 4.3% this year, according to the World Bank, but momentum will likely wane in the next few years.

“The low-carbon transition efforts of the EU and other large trading partners create a fresh incentive for Russia to catch up with overdue diversification and modernisation of its economy,” the World Bank said.

Russia is the world’s fourth-largest emitter of greenhouse gases and relies heavily on fossil fuel exports – but President Vladimir Putin has ordered the government to work towards cutting emissions.

Russia’s plan to reduce its carbon footprint by 2050 will require investments of between $13.6 billion and $54.5 billion per year, the central bank said last month.

($1=73.4600 roubles)

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Original Source