Does Russia have its head in the sand about the future of fossil fuels?

In this episode, Lauren Sneade speaks to Professor Thane Gustafson for a second instalment on how the Russian oil industry affects the country's attitudes towards climate change, given the country's distinguished history of climate science. They cover how climate change has affected the country so far, and how Russian policymaking has responded, raising questions around the political will of Russian political figures to tackle the crisis.

Further reading:

Igor Makarov, Henry Chen & Sergey Paltsev (2020) Impacts of climate change policies worldwide on the Russian economy

Thane Gustafson, Klimat: Russia in the Age of Climate Change. Harvard University Press

Tynkkynen, V. (2019). The Energy of Russia: Hydrocarbon Culture and Climate Change. United Kingdom: Edward Elgar Publishing.

Gordon, D. (2021). No Standard Oil: Managing Abundant Petroleum in a Warming World. United States: Oxford University Press.

Find all our latest investigations, features and interviews at www.landclimate.org

Transcript

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00:07
Lauren Sneade
Hello. You're listening to the Economy, Land and Climate podcast. I'm Lawrence ned and this episode we have Than Gustafson on for the second time. To continue our conversation about Russian oil, we'll be talking about how climate change affects Russia and the political factors in the Russian discussion on hydrocarbons. 

 00:24
Prof. Thane Gustafson
Near term consequence of the invasion is that the Russian government is desperate for money and it is increasing taxes on the oil and gas industry in particular. That means that whatever those companies are earning through export revenues, an increased share of that is being preempted by the state. That leaves less for investment in the future of oil and gas. 

 00:50
Lauren Sneade
Last time we spoke about how Russia's reliance on its oil exports trumped attention to climate change in its policy making, I asked Professor Gustafson how climate change affects Russia. It's a country with immensely varied landscapes, deserts, frozen coastlines, tall mountains, giant marshes, and what's more, wealth equality in Russia is extreme the top 1% and 20% to 25% of the national income. We know that economic realities vastly affect a community's capacity to deal with climate change. So how are Russians affected? 

 01:21
Prof. Thane Gustafson
In my book on the impact of climate change on Russia, I divided that question in two parts, internal and external. The internal part is still fairly remote as far as Russia as a whole is concerned. The big questions would be, for example, food supply, grain exports, things of that sort. At the same time, the biggest internal impact will be in the form of permafrost melting, the melting of permafrost. That is huge for Russia, because 70% of Russian territory is covered by permafrost. The melting will have an enormous impact, damaging in the near term, but at the same time, it will open up some opportunities for Russia and the big one is along the coast of the Arctic Ocean. And so the Kremlin is very aware of that, has been for quite some time. One of the big ambitions of the russians going forward is to take advantage of the melting of sea ice to open up the Northern Sea Route, as they call it, which runs from the western coast of Russia on the Arctic and then runs all the way to Asia. 

 02:41
Prof. Thane Gustafson
This would be a key part of Russia's ambition to pivot to the east in its exports of oil and gas. Particularly the new player in the equation is liquid natural gas, or LNG. The impact there consists of the positive opportunities created by global warming in the Northern Sea Route, but at the same time, the larger damage caused by melting permafrost all across that vast territory. Now, there's been some speculation in the western media about how that would play out in the next century. Well, of course, that's too far to know anything for sure. The idea being that global warming will turn that vast expanse into an area that would be suitable for agriculture. That's very unlikely. Russian soil scientists have been looking into that. The key point here is that permafrost, once it melts, it's a mixture of sand and ice and very little organic material. 

 03:49
Prof. Thane Gustafson
The idea that this could be a fertile area simply doesn't work from the standpoint of soil, let alone, of course, the remoteness and the unavailability of labor and the vast capital that would be required. The impact of permafrost is overwhelmingly negative. Much for the internal, and we can come back to the agriculture in a bit. The external is really the dimension on which climate change has the greatest impact for Russia. Because of Russia's dependence on hydrocarbon exports, oil, overwhelmingly. In the last normal year, oil made up over 50% of Russian exports, and then gas made up another 10% or so. Add all that up and you've got a Russian budget that is enormously dependent on hydrocarbon exports. Anything that happens to those exports and the revenues from them is really the key answer to your question about the impact of climate change on Russia. It's the external, first and foremost that the russians themselves are worried about. 

 05:05
Lauren Sneade
Have they got their priorities right, then, if they're more concerned about the external impacts of climate change than those that are internal? Because the melting of the permafrost sounds like, a, it's accelerating quicker than anyone thought that it would, and B, if 70% of Russia is permafrost, would the consequences of that melting not be more catastrophic than they're saying? 

 05:31
Prof. Thane Gustafson
It adds to costs. Much of this vast area is largely uninhabited, and the areas where the oil and gas comes from the coast of the Arctic Ocean, permafrost is a nuisance. It adds to costs. It has all kinds of awkward side effects. The ground shifts that causes buildings to collapse sometimes, it causes roads to fracture, it causes pipelines to twist and break. All of that adds to cost. In the end, it's not totally debilitating. It doesn't spell the end of the industry by any means. 

 06:13
Lauren Sneade
Are there some policymakers, then, who are arguing that the melting of the permafrosts will be a good thing or a net positive for the Russian economy, especially if it comes hand in hand with opening up the Arctic northern border? 

 06:29
Prof. Thane Gustafson
I think that might have been the initial reaction of the leadership maybe ten years ago, or even five. The remarkable thing on the eve of the invasion was that the message from Western consultancies and climate scientists and authoritative bodies of all kinds, that message had reached Russia. Now, the reactions of various Russians were very different. You're talking about a spectrum of reactions with Putin somewhere in the metal. The first thing to bear in mind is that the russians themselves had a long tradition of distinguished climate science, so they were among the first to call attention to the phenomenon of global warming and the impact that might have on the Arctic regions. The russians from the 1970s on were part of the global conversation that was then took the form of the United Nations organizing the intergovernment Metal Panel on Climate Change. The russians have been members of that from the beginning. 

 07:36
Prof. Thane Gustafson
One contribution to the conversation inside Russia from the Russian scientists themselves on the whole, they've been quite pessimistic about the impact for Russia then the transmission of the Western conversation into Russia. One interesting figure is the head of the Russian national oil company rosneft Igorcetchin. He's one of the conservatives. He believes that there will be oil demand for the foreseeable future, that it will continue to grow, that the world oil industry is making a great mistake by cutting back on investment in the oil upstream. We Russians will make no such mistake and we will be prepared for the world of continuing strong growth in demand and we'll be fine. The gas industry until recently took much the same position, and particularly because of the rise of LNG as a new export product by the gas industry. Those are the conservative voices. We'll be fine going forward. 

 08:40
Prof. Thane Gustafson
At the other end of the spectrum, you've had people who have really bought the message and who understand that Russia could indeed be in difficulty and that it's necessary to make a transition. Renewables would be part of that. That was promoted in particular by some, shall we say, prominent figures in Russian politics and past figures in Russian politics. There was a man named Chubais who was as much as anything the father of Russian privatization back in the 1990s and played a major role in reconstructing and privatizing the Russian electricity sector under Putin. Shubais has now emigrated and has vanished from the scene. He, as much as anyone, was the big promoter of renewables in Russia. So there's the spectrum for you. The Minister of Energy, a man named Novak, Alexander Novak, has definitely heard the message. The message that he is conveying to Russian industry is we do need to do something about emissions. 

 09:54
Lauren Sneade
You were saying that essentially parts of climate science originated in Russia. Up until the 1970s, and or particularly during the 1970s, russia was very vocal in global climate conferences. When did Russia start to gain a reputation for climate denial? 

 10:14
Prof. Thane Gustafson
I don't think there is, properly speaking, any climate denial in Russia as a major factor in the Russian political spectrum. The conservatives do not deny the climate science. They simply tend to emphasize the inertia of the world energy system and simply don't believe that the world economy is going to adapt that quickly and move away from hydrocarbons as quickly as some people in the west believe. The kind of polarization that we've seen in the United States over climate science is a very American phenomenon. It practically doesn't exist in Europe or in Russia or in China or india. People are not questioning the research, the competence the sincerity and so on. Unlike the United States, where climate science has become a polarizing political issue that sets us apart from the rest of the world. There is no significant climate denial in Russia. 

 11:20
Lauren Sneade
Russia is saying that it's unlikely that the world will see a decline in demand for oil in the way that it's being projected from players in the EU and the Us. Do you think that they're right in that opinion or in that pessimism? 

 11:37
Prof. Thane Gustafson
Well, call it pessimism or optimism, but in any event, they stick to their guns, so to speak. The threat to Russia comes from another source, the prospect that Russia, first of all, could be considered the bad boy of the world climate debate, and in particular where emissions are concerned. The europeans in particular have been pioneering carbon markets, putting a price on carbon and using the authority of the European Union to drive down emissions. This would have the automatic principal way of doing that is to discourage the consumption of hydrocarbons, which of course, then would have an impact again coming back to the hydrocarbon export revenues of the russians. The russians are part of that debate as well. They tend to take the position for publicity purposes, public relations purposes, that they are as green as anyone else. Their principal means of emissions control is forests reforestation. 

 12:45
Prof. Thane Gustafson
Every time the russians show up at international conferences, that's what they like to talk about is the role of their forests. Are they going to implement a carbon price? Russian industry has resisted that. Very stoutly. Are they going to implement limits on carbon emissions? That, too, has been resisted. Very stoutly. The Russian position is we are very green. To be sure, we use our comparative advantage. We are producers of hydrocarbons, also coal. We are, however, the greenest producer of hydrocarbons because we emphasize natural gas. The future will be natural gas and the future of natural gas will be LNG. We russians are on the side of the angels. 

 13:35
Lauren Sneade
Yeah. That comes at the expense of any policy move or move investment towards renewables. 

 13:43
Prof. Thane Gustafson
That's right. Now, the near term consequence of the invasion is that the Russian government is desperate for money and it is increasing taxes on the oil and gas industry in particular. That means that whatever those companies are earning through export revenues, an increased share of that is being preempted by the state. That leaves less for investment in the future of oil and gas inside Russia and less for investment in LNG, less for pipeline construction, less for the development of new oil resources, such as on the coast of the Arctic Ocean. That tends to exert a drag effect on the future prospects of Russia as an oil and gas producer. 

 14:31
Lauren Sneade
Clearly, the Ukraine invasion has been a turning point in Russian politics. Can you tell me about Russian climate change policy? On the eve of the invasion and then how that changed after the start of the Ukraine war. 

 14:46
Prof. Thane Gustafson
Well, what I've been describing until now is pretty much the situation it was as it was on the eve of the invasion. We haven't talked about public opinion. Public opinion was not terribly worked up about climate change. Most people tended to be aware of local environmental problems, including permafrost melting, where that was a problem, but they were more focused on what you might call pollution issues, air quality, and above all, waste disposal. That was a very big one. That tended to be the extent of the focus of the Russian population on climate change as a global problem. What's been the impact of the invasion? It's been broadly to lessen public attention and also government attention to the broader issue of climate change. The invasion has tended to drive decision making toward the near term. Basically, we need to survive. We need to get by. We need to adapt to sanctions where sanctions have been imposed. 

 15:55
Prof. Thane Gustafson
We have to finance the war somehow. We also need to come up with manpower for the war. Draft, there's been a massive draft of manpower. That's what's on people's minds, and that's what's on the government's minds. 

 16:09
Lauren Sneade
Well, thank you very much for listening. You were listening to Professor Thane Gustafson, political scientist at Georgetown University. If you're interested in the climate debates around Russian oil and would like to know more, check out our recommended breeding list in the information. And if you like what you've heard from us, you can follow us on Twitter @LandClimate or head on over to our website. Thank you very much for listening.