Econonomics of Energy and Environmental Policy

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The Impact of Efficient Carbon and Gas Pricing on the Russian Electricity Market

Abstract:
The paper examines the possible interactions of various policy proposals to introduce carbon taxation, adjust the domestic price of gas to export parity and build a major electricity interconnector, and their impact on carbon emissions and the fuel mix of the Russian electricity supply industry. Without raising gas prices, a carbon tax of �25/tonne CO2 reduces emissions by 13% and the output of coal-fired plant by nearly 50%, with the major impact at �6.3-12.5/tonne. Moving gas prices to export parity substantially offsets this effect, and requires higher carbon taxes to reduce emissions by the same amount, as does building the prospective interconnector "Ural-Siberia". Keywords: Carbon tax, Russian electricity industry, Gas tariffs, Export parity
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JEL Codes:P48: Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies, Q44: , L94: Electric Utilities


Keywords: Carbon tax, Russian electricity industry, Gas tariffs, Export parity

DOI: 10.5547/2160-5890.2.1.5


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Published in Volume 2, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


 

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