Risks and Prospects for Russian Regional Export Development in the Face of the Global Energy Transition
DOI:
https://doi.org/10.17059/ekon.reg.2024-4-14Keywords:
export, global energy transition, transitional climate risks, environmental regulation, Russian regions, Gravity ModelAbstract
Export development is a priority for the Russian economy, as it plays a crucial role in ensuring sustainable economic growth. In this context, understanding the determinants of regional export development is essential. In their export activities, Russian companies face a range of limiting factors, many of which have been thoroughly examined, with corresponding mitigation strategies incorporated into export plans. However, the role of the global climate agenda and the energy transition in shaping export development remains largely unexplored for Russian regions. The shift of focus to fulfilling environmental goals creates a new type of economic risk for exporters — transitional climate risks, which intensified after February 2022. This study investigates the comprehensive impact of the global energy transition on export flows in Russian regions and identifies region-specific factors that influence how the energy shift affects export levels. The hypothesis is that the global energy transition creates both risks and opportunities for Russian regions, with varying effects depending on the specific components of the energy shift and the socio-economic and environmental characteristics of each region. Using the gravity equation with the Poisson Pseudo-Maximum Likelihood (PPML) technique, the study finds that the impact of the global energy transition on Russian regional exports is multidirectional. First, environmental regulations in partner countries reduce exports from many Russian regions by 0.3 %, though regions with favorable socio-economic conditions for innovation and active regional environmental policies see an increase in exports—by 0.3 % and 0.7 %, respectively. Second, the production of alternative energy in partner countries decreases Russian exports by 0.2 %. Finally, exports from mineral-abundant Russian regions benefit from the global energy transition. These findings contribute to the literature on Russian export promotion and offer valuable policy insights for addressing the challenges and opportunities posed by the global energy transition.
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