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EconomyDec 10, 2021 11: 31AM ET
© Reuters. FILE PHOTO: A participant stands near an emblem of World Financial institution at the International Monetary Fund – World Financial institution Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo/File Listing
MOSCOW (Reuters) – The Russian financial system can without distress weather the carbon border tax as proposed by the European Union in July 2021, the World Financial institution said on Friday, calling on Moscow to derive cooperative action along the global course to a green transition.
The EU proposed a Carbon Border Adjustment Mechanism (CBAM), or CO2 tariff, on polluting items from 2026, which mediate-tanks said can also lead to elevated rate fees on merchandise from Russia, totally on metals and fertilisers.
“Even supposing Russia continues its most trendy growth model, the financial system-wide macroeconomic obtain of EU CBAM might perhaps well perhaps be negligible to little depending on its make,” the World Financial institution said in a order on risks and opportunities of the golf green transition.
“Even supposing the U.S. joins the EU in introducing a carbon border adjustment, Russia’s losses will expand most attention-grabbing negligibly.”
The World Financial institution lowered Russia’s economic growth forecast earlier this month, highlighting risks associated to the golf green vitality transition amongst others, including geopolitics and the COVID-19 pandemic.
After petrified by 3% in 2020, its sharpest contraction in 11 years, the Russian financial system is space to develop 4.3% this yr, according to the World Financial institution, but momentum will seemingly wane within the next few years.
“The low-carbon transition efforts of the EU and diversified mountainous procuring and selling companions derive a contemporary incentive for Russia to do away with up with gradual diversification and modernisation of its financial system,” the World Financial institution said.
Russia is the arena’s fourth-ultimate emitter of greenhouse gases and relies closely on fossil gas exports – but President Vladimir Putin has ordered the governmentto work in opposition to cutting emissions.
Russia’s belief to slit its carbon footprint by 2050 would require investments of between $13.6 billion and $54.5 billion per yr, the central bank said closing month.
($1 = 73.4600 roubles)
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