02sep

In July 2021, the Russian President Vladimir Putin approved a new National Security Strategy of the Russian Federation, one of the goals of which in the field of environmental safety and rational use of natural resources is "to set up a system of a state regulation of greenhouse gases emission, to ensure an implementation of projects reducing greenhouse gases emission and to increase their absorption".

Due to farming activities as well, a significant amount of greenhouse gases gets into our atmosphere, and as a result we observe climate change and global warming. As the demand for food rises and, as a consequence, the further intensification of farming, the trend towards anthropogenic depletion and pollution of soils and an increase in air pollution emissions will only grow.

The main idea of the Agrofinmost project is to intensify the production and export of Russian agricultural products, and to promote the growth of food security in the Middle East. Today, more and more countries are talking about the need to impose so-called carbon tax on imported goods. And if Russia quickly engages in this global battle for climate, we will be able not only improve the quality of our soil and farming, but also earn good money in global carbon markets and strengthen the competitiveness of our export.

The Agrofinmost project team in cooperation with the researchers from the HSE-Skolkovo Institute for Law and Development, BRICS Competition Law&Policy Centre, and the Center for Technology Transfer prepared a report entitled "Battle for Climate: Why Russia Should Bet on Carbon Farming", which was presented on May 26 this year at the TASS press center.

The issues of global warming and climate change have been raised for more than a dozen years. Attempts to come to some kind of consensus aimed at climate change control and reduce of the greenhouse gases emission into the atmosphere were back in 1997 at the UN conference on climate change in Kyoto and in 2015 at the climate conference in Paris.

Traditionally, the United States is the driving force if one can say in matters of global warming. Joe Biden, the new American president, makes an announcement of the creation of a large carbon market. The prerequisites for such statements were significant soil depletion. Huge financial investments are required for their restoration, and in order to avoid additional expenses from the state budget, the country’s leadership makes a systemic decision: those enterprises which carry out carbon emissions should pay for them itself. The program of the new US president provides the imposition of a new carbon tax in relation to importing countries which do not fulfill their obligations on climate and environmental protection. Thus, we are talking about carbon imperialism rather than about preserving the environment.

The other way was chosen by Europe. In December 2019, the European Union adopted the "European Green Deal" strategy aimed at achieving zero greenhouse gas emissions by 2050, including by imposing a border carbon tax on goods imported in the EU. At the beginning of 2021, the European Commission published some kind of instruction on the implementation at the state level of carbon farming mechanisms in the EU countries. This voluminous document also puts a significant emphasis on the quick and painless adaptation of the farmers themselves to the new conditions.

In February 2021, China imposed its national carbon trading system. Although back in 2010, the country, which is the world’s largest emitter of greenhouse gases, loudly declared that this issue was not a priority for them.

From one hand, humanity did experience a serious problem of climate change on the planet. Industrialization has led to a significant increase in emission of greenhouse gases into the atmosphere. From the other hand, we are talking about a huge trade war by erecting new trade barriers, and carbon protectionism. And it is very likely that in the future, agricultural products will somehow fall under the corrective mechanisms of the EU, the USA, China and many other countries which declare plans to impose carbon neutrality. Thus, if Russia does not revise its carbon strategy, it will negatively affect Russian export, including export of agricultural products.

Someone may rightfully mention that, for example as of grain, we mainly sell it to Egypt, Turkey and Saudi Arabia, which today are not particularly concerned about carbon neutrality. However, all these countries, like Russia, are part of the world trade system. And if tomorrow in Europe or America, where Egypt plans to supply gas and oil, a carbon tax will be imposed, then Egypt will be forced to accept the new rules of the game and to become part of the new carbon system. And then the situation may develop in such a way that Egypt will be forced to buy grain from Europe in exchange for carbon quotas exporting its goods to the EU countries. And now a new lever of economic pressure in a world trade appears — "carbon barter".

As mentioned above, farming is one of those activities which foremost pollutes the atmosphere and the environment. Therefore, it is not possible to continue to work on our fields using the old methods and at the same time to be eligible for carbon sequestration. Today, both a change in approaches to farming and a change in the thinking of the farmers themselves are required. Russia has enormous macroeconomic potential in the form of forests and arable land. In addition, from 40 to 80 million hectares of farmland are out of use. With a smart transition from simple to regenerative agriculture, we could achieve good results, both in the global carbon market and in the battle for climate in general. I would like to remind you that regenerative or conservation agriculture is aimed primarily at restoring the upper soil layers, which allows you to complete the carbon cycle, to reduce the emission of greenhouse gases into the atmosphere, to increase productivity and strength to climate changes.

Therefore, I consider it important and necessary to move from discussions to the development and implementation of real mechanisms for carbon farming. If earlier farming was perceived as one of the causes of negative climate change, today we are talking about the fact that farming could become a source of technologies that ensure the sequestration of greenhouse gases from the atmosphere. And it depends on us whether we will be active participants or even trendsetters of a new carbon order, or Russia will passively accept the new rules of the game.

However, for the successful solution of the set carbon tasks, first of all, it is required to create effective market mechanisms inside our country, and it expects to cooperation and cohesive work of all involved government establishments and scientific institutes. It is an extensive work to create a set of measures for educational, legislative and financial support of the carbon market participants.

The presentation of the report "Battle for Climate: Why Russia Should Bet on Carbon Farming" was held on May 26th, 2021 at the TASS press center.

The report "Battle for Climate: Why Russia Should Bet on Carbon Farming" is published on the official website of the HSE — Skolkovo Institute for Law and Development.