Towards an Efficient and Low-Carbon Economy Post-2012: Opportunities and Barriers for Foreign Companies in the Russian Market
FCN Working Paper No. 3/2011
48 Pages Posted: 23 Jul 2011
Date Written: February 2011
The purpose of this paper is to gain a broad overview and better understanding of the current and future policies, market trends, prospects and barriers related to Foreign Direct Investment (FDI) in energy efficiency and carbon mitigation in the Russian energy industry. The analysis was conducted by reviewing the relevant scientific and non-scientific literature, and focuses on a variety of theoretical and practice - oriented arguments. In this context, we assess the progress and future potential of Joint Implementation (JI) and the Green Investment Scheme (GIS) as two possible channels for FDI in transnational projects aiming at carbon mitigation and increases in energy efficiency. Based on this assessment, we presume that an Energy Service Company (ESCO), as an important intermediary, can be a well - suited entity for the implementation of the market - oriented mechanisms JI and GIS in Russia in the long term. The compatibility of the main features of JI and GIS with the working procedures under the ESCO model can generate numerous synergy effects and deliver an effective vehicle for overcoming the majority of transaction barriers specific for the Russian energy market. A possibility to overcome these barriers would assist the modernization of the Russian energy industry and improve a “win-win” situation for foreign companies seeking to invest strategically in energy efficiency and carbon mitigation projects.
Keywords: energy efficiency, carbon mitigation, joint implementation (JI), green investment scheme (GIS), energy service company (ESCO)
Suggested Citation: Suggested Citation