CASE STUDY: RUSSIA

This case study examines Russia's economic and fiscal dependence on fossil fuels, detailing the sector's contribution to government revenue, the role of state-owned enterprises, and the fiscal implications of energy transition and climate policies.

• Russia possesses significant fossil fuel reserves, accounting for 20% of global gas, 15% of coal, and 6% of oil reserves as of 2018. These reserves are equivalent to 428 GtCO2, which exceeds 2018 global energy-related carbon dioxide emissions by more than 12 times.
• The Russian economy is heavily reliant on fossil fuels, which provided 90% of the total energy supply and 95% of domestic energy production in 2017. In 2018, fossil fuels represented over 60% of the country's export value, making the GDP and the exchange rate of the Russian Ruble (RUB) sensitive to global oil price fluctuations.
• Government revenue is highly dependent on the fossil fuel sector. In 2017, taxes and fees from fossil fuel production and consumption generated 23.6% of general government revenue. Specifically, the Mineral Extraction Tax (MET) and export duties were reported as 40% and 46% of the federal budget in 2017 and 2018, respectively.
• State-owned enterprises (SOEs) dominate the oil and gas sectors, exposing the government to risks of stranded assets. Gazprom accounts for 68% of gas output, while Rosneft and other SOEs produce more than half of the oil. These entities are primary sources of resource extraction, income, and export taxes, as well as dividends for the federal budget.
• Russia's energy policy focuses on maintaining global market shares by continuing trade with Europe and expanding exports to the Asia-Pacific region, particularly China. To offset the depletion of mature fields in the Volga-Urals and Western Siberia, the government is subsidizing the development of higher-cost reserves in the Arctic, the Far East, and Eastern Siberia.
• Russia has committed to limiting anthropogenic greenhouse gas emissions to 70–75% of 1990 levels by 2030 under the Paris Agreement. However, this target may allow for an increase in emissions over current levels, which were 68% of 1990 levels at the end of 2017 (excluding LULUCF) and 51% (including LULUCF).
• The Russian government provides substantial fossil fuel subsidies. OECD estimates place direct budgetary transfers and tax expenditures at 0.5% of GDP (1.5% of general government revenue), primarily benefiting production in the Arctic. IEA estimates for consumer subsidies via regulated prices are higher, at 1.3% of GDP (3.9% of general government revenue).
• The International Monetary Fund (IMF) estimated that the under-taxation of fossil fuel consumption in Russia in 2017 amounted to USD 74 billion regarding climate change effects and USD 422 billion regarding air pollution health impacts. These combined estimates are roughly equivalent to Russia's entire general government revenue.

APA

Gerasimchuk, I., & Oharenko, Y. (2019). CASE STUDY: RUSSIA. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/beyond-fossil-fuels-russia.pdf

Chicago

Gerasimchuk, Ivetta, and Yuliia Oharenko. CASE STUDY: RUSSIA. International Institute for Sustainable Development, 2019. https://www.iisd.org/sites/default/files/publications/beyond-fossil-fuels-russia.pdf.

Wikipedia

{{cite report |last1=Gerasimchuk |first1=Ivetta |last2=Oharenko |first2=Yuliia |title=CASE STUDY: RUSSIA |publisher=International Institute for Sustainable Development |date=November 2019 |url=https://www.iisd.org/sites/default/files/publications/beyond-fossil-fuels-russia.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gerasimchuk2019case, author = {Gerasimchuk, Ivetta and Oharenko, Yuliia}, title = {{CASE STUDY: RUSSIA}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = nov, url = {https://www.iisd.org/sites/default/files/publications/beyond-fossil-fuels-russia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }