Nature-Based Offsets in Russia: Key Challenges and Conditions for Success

— The article discusses the key problems and conditions for the successful development of the industry of nature-based offset projects (NBOP) in Russia. Taking into account the state and prospects for development of external markets for carbon units from NBOP (voluntary carbon markets, national carbon markets, implementation of projects under Articles 6.2 and 6.4 of the Paris Agreement), the conditions for successful entry of carbon units from Russian NBOP to the global market are determined. The key limitations for the domestic market of carbon units from Russian NBOP are presented: the lack of internal economic incentives for companies to acquire carbon credits and invest in Russian NBOP, the lack of national methodologies for implementation of NBOP, legal restrictions, the lack of available tools for assessing the potential of territories for implementing NBOP, and the lack of carbon market regulations based on a case study of the Sakhalin experiment. The limitations of the departmental approach to developing the NBOP sector are shown, which leads to uncoordinated and inconsistent decisions that do not correspond to real conditions in global markets. To remove these restrictions, it is necessary to create a center of competences for the entire range of issues related to implementing NBOP: from specific methodologies for individual projects to scientifically based assessments of their potential at the Russian level. Two scenarios for using NBOP for decarbonization of the Russian economy are considered: (1) predominantly the sale of Russian NBOP carbon units in foreign markets with maximized export earnings in the medium term; (2) development of the NBOP sector primarily for the domestic market to achieve carbon neutrality by 2060. A realistic and balanced strategy presupposes that export-oriented Russian companies should become the key buyers of carbon units from Russian NBOP at the first stage, which can then use these units to reduce the carbon footprint of their output and implement corporate climate strategies.