Diversification and Cooperation in a Decarbonizing World: Climate Strategies for Fossil Fuel-Dependent Countries

Abstract

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

Security implications of climate change: A decade of scientific progress

“…For example, a rapid decarbonization of energy systems will affect demand and rents of high market value resources, such as oil and gas, which are known to affect conflict risks (Ross, 2015). This could challenge the stability of resource-dependent states that are poorly prepared for such transformation in the medium term (Peszko et al, 2020). Assessing security risks – but also long-term benefits – that may result from increased efforts to curb climate change, including a transition to more diversified low-emission energy systems, is therefore an important task.…”

Does resource abundance require special approaches to climate policies? The case of Russia

“…As the 'Resource Curse' hypothesis suggests, an abundance of natural resources can lead to the dominance of rent-seeking behaviour rather than to pro-development activities (Auty 2001;Ross 2015). The same can be true for climate policies: in fossil-fuel dependent countries, the interest groups that aim to protect the status quo are especially strong and e cient in confronting the green transition (Peszko et al 2020).…”

“…Exports specialization of Russia and its focus on fossil fuels and carbon-intensive goods is not only its own choice but also is a re ection of high consumption in the West. Peszko et al (2020) divides possible international incentives for fossil-fuel dependent countries into negative and positive. The former include border carbon adjustment of all types.…”

“…The core of this group consists of fossil-fuel-dependent countries (FFDC). They generate about 20% of global emissions, and 80% of global emissions are embodied in fossil fuels which they extract (Peszko et al 2020). Russia is the largest of these countries, responsible for 5% of global emissions (Climate Watch 2018).…”

“…Similar to other FFDC, Russia worries that an active climate policy within the country may undermine its economy's signi cant competitive advantages (Peszko et al 2020). At the same time, decarbonization worldwide is also a signi cant challenge as it poses a threat to the income originating from hydrocarbons exports (Makarov et al, 2020).…”