Green Finance Architecture in Russia

By Igor Shuvalov

Konstantin Paustovsky, a Nobel Prize nominated Russian author, once said: “Understanding nature, and having a humane and respectful attitude towards it, is one of the elements of morality, and a part of one’s worldview”. In 2020, at the height of the unforeseen COVID-19 crisis which is causing unprecedented challenges for humanity, we gather for the Paris Peace Forum, to speak about what unites, rather than separates, us all. We will discuss past failures, and the lessons needed to be learnt in order to build a more sustainable and resilient future.

The COVID-19 crisis has revealed the weaknesses of the existing international order, characterised by the persistent inequality of ecological, economic and social issues. The world has become fragmented and bogged down by disagreements; we forget that the vitally important things are common in essence.

Humans have always been an integral part of nature, which provides us with air, water and food. All that we have, and all that we have achieved, is thanks to the gifts of the surrounding world.

Throughout the majority of human existence, we have only taken from nature what we needed in order to survive. We treated what we received with respect. However, this all changed dramatically after the “Industrial Revolution” in the 1760s, when consumption became one of the main human values.

This technological progress continued until the end of the 20th century, primarily pursuing explosive economic growth and the creation of consumer products. The focus was to improve people’s quality of life with things previously unavailable to them.

Deforestation, exhaustive mining, river drainage, and both water and air pollution have become a reality, resulting in a considerable climate change, affecting every country on the planet. Climate change destroys economies and devastates lives. Weather conditions are becoming more severe, sea levels are rising, and weather patterns are changing.

In recent years, governments around the world have invested considerable time and effort in developing plans to create a safer and more prosperous future for their citizens. Adopting such strategies as part of recovery planning could help the world to better recover, guided by the Sustainable Development Goals of 2030.

For Russia, environmental protection is becoming a crucial matter. A January 2020 report by the Accounts Chambers of Russia states that 38.6% of Russia’s population breathes polluted air, whilst 88% of the water used in agriculture and manufacturing does not meet decontamination standards. The Russian government is aware of the need to dramatically improve its citizens’ quality of life, and to make a substantial contribution in fighting climate change.

In the 12 National Programs set in Russia in 2018, the Ecology Sector is allocated a sum of 4.0 trillion roubles (roughly 50 billion euros). Only one fifth comes from the budget, and four fifths have to be funded by the private sector, both domestic and foreign. Whilst this is a great effort on the part of the Federal Government, it does not meet the necessary needs.

Russia has entered into the Paris Agreement, and is committed to implementing its provisions. As Russia is a highly industrialized country, it has high pollution rates, green projects are of particular importance for it.

To further contribute to sustainable green recovery, VEB.RF as a Development Corporation in Russia is focusing on creating the environment and stimulus for private investors to participate in programs connected with SDGs, through a wide range of loans and bonds. To accomplish this, a competence centre will be created within VEB.RF in order to maintain and develop a green and sustainable national standard.

Whilst greenhouse gas emissions are projected to decline by about 6% in 2020 due to travel bans and slowing economic growth because of the COVID-19 crisis, this improvement is only temporary. Climate change has not stopped. As the global economy begins to recover from the pandemic, emissions are expected to return to even greater levels.

This period of recovery from the pandemic is a chance to increase our efforts, to address the exceptional challenges posed by the green agenda through record cooperation between countries and across borders despite persisting disagreements, and to pave the way to a more sustainable, inclusive and equitable future.

Views expressed in this publication are the author’s and do not necessarily reflect the views of the Paris Peace Forum.

Igor Shuvalov, Chairman of the State Development Corporation “VEB.RF” (Russia)

Better #governance for a world at peace. Visit: www.parispeaceforum.org

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