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Transition to a low-carbon economy and its implications for financial stability in Russia

Author

Listed:
  • Burova, Anna
  • Deryugina, Elena
  • Ivanova, Nadezhda
  • Morozov, Maxim
  • Turdyeva, Natalia

Abstract

The energy transition and the climate policies accompanying it represent one of the major challenges for the Russian economy. Using a CGE model and a firm-level financial model, we evaluate transition risks for Russia's financial system. Our analysis reveals that the main costs to Russia from global net-zero efforts are largely exogenous, stemming from a decline in the value of its energy products rather than from domestic climate policies. Moreover, the effects of global climate actions in the Net Zero scenario exceed those of implementing a domestic emissions trading system aligned with Russia's low-carbon development strategy. The granular data in the satelite financial models makes it possible to evaluate the concentration of sectoral debt burden and estimate the impact of climate regulations on sectors' equity valuations.

Suggested Citation

  • Burova, Anna & Deryugina, Elena & Ivanova, Nadezhda & Morozov, Maxim & Turdyeva, Natalia, 2026. "Transition to a low-carbon economy and its implications for financial stability in Russia," Emerging Markets Review, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:ememar:v:72:y:2026:i:c:s1566014125001748
    DOI: 10.1016/j.ememar.2025.101425
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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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