Introducing elements of a cyclical economy as a tool for a sustainable climate

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The Stockholm Declaration of the UN Conference on the Human Environment, which proclaimed the need for a common approach and shared principles for the world community to preserve and improve the human environment, celebrated its 50th anniversary this year. It was on 15–16 June 1972 that the concept of sustainable development was first discussed.

Fifty years later, the principles of sustainable development have touched virtually every corner of the globe and gained support even from countries that in previous decades preferred to remain on the sidelines.

Long-standing predictions of ecologists, biologists, climatologists on the growth of risks for the economy in case of ignoring the laws of nature, harming its components and human needs for favorable environment are increasingly confirmed every year by the facts of man-made accidents and natural anomalies. And let us be objective: the greater the concentration of population, the faster the growth of production capacity, the more noticeable the changes.

The growing influence of “green” parties and the active expansion of their electorate in developed and developing countries, stock exchange reports on the growth of private investors’ contributions to sustainable development projects, and the increased attractiveness of eco-labelled products for buyers — all this indicates that man-made accidents and natural anomalies are not ignored by the public, including in Russia.

The individual trends that have developed into a sustainable trend have set new directions for the global economy, highlighting the following:

  • Low- and high-carbon economies (with and without climate change measures);
  • “Green” (including a set of measures to protect the environment);
  • “Blue” (including a mix of ocean protection and water conservation measures).

All ‘coloured’ economies are based on the Sustainable Development Goals, which are further anchored in the Paris Agreement on Climate (adopted on 12 December 2015 following the 21st Conference of the Framework Convention on Climate Change (FCCC; 1992) in Paris) and provide, to varying degrees, controls and limits on economic growth to achieve the ‘sustainable’ development of economies in the long term.

By Decree No. 1228 of 21 September 2019 of the Government of the Russian Federation, our country made commitments under the Paris Agreement on Climate:

  • to develop national plans for emissions reduction, technology upgrading and adaptation to climate change (under the Paris Agreement — provisional nationally determined contributions) and revise them upwards every five years;
  • to reduce systematically atmospheric CO2 emissions as part of a national strategy to transition to a low-carbon economy;
  • to establish an international exchange of green technologies for energy efficiency, industry, construction, agriculture, etc.

Highlights from the text of the Paris Agreement:

“This Agreement, by enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change in the context of sustainable development and efforts to eradicate poverty, including through:

(a) Keeping the increase in global average temperature well below 2 °C above pre-industrial levels and making efforts to limit temperature rise to 1.5 °C, recognizing that this will significantly reduce the risks and impacts of climate change;

(b) Improving adaptive capacity to the adverse effects of climate change and promoting climate resilience and low greenhouse gas emission development in ways that do not threaten food production;

(c) Aligning financial flows with the trajectory towards low-emission and climate-resilient development.

“The Conference of the Parties serving as the meeting of the Parties to this Agreement shall hold a first global stocktake in 2023 and every five years thereafter, unless the Conference of the Parties serving as the meeting of the Parties to this Agreement decides otherwise.”

An order of the Government of the Russian Federation approved the operational and long-term adaptation measures in the transport sector, fuel and energy complex, construction and utilities, agriculture and fisheries, nature management, healthcare, the Arctic zone, civil defence and emergency situations, industrial complex and foreign trade, as well as sanitary and epidemiological well-being of the population.

To assess climate risks and develop adaptation measures, methodological recommendations of the Russian Ministry of Economic Development No. 267, dated May 13, 2021, were used.

Sectoral adaptation plans have been developed in accordance with the National Action Plan for the first phase of adaptation to climate change. The assessment of climate risks and the ranking of adaptation measures contained in these plans will help to reduce losses and increase benefits associated with observed and projected climate change.

The National Action Plan for the first phase of adaptation to climate change for the period up to 2022 is a system of government measures aimed at reducing the vulnerability of the national security system, economic actors and citizens due to changes in the planetary climate and climate on the territory of Russia, the territories of neighbouring states and the adjacent areas of the World Ocean. These measures will be implemented by the federal executive authorities and the authorities of the country’s constituent entities.

At the same time, Russia, being one of the leaders in fossil fuel extraction and industrial production, should certainly take into account the specifics of the national economy and the high risk of additional limitations of its development when participating in decarbonisation projects in the absence of preliminary studies, analysis of the current situation and unsystematic measures to introduce emission limitations for individual enterprises or spheres.

The territory of Russia is vast, passing through several climatic belts, and the specifics of economic activity in sparsely populated northeastern regions differ significantly from economic activity in large cities; the impact of emissions on the climate is more noticeable the higher the density of economic entities and population (a good example: Moscow, which has its own microclimate).

Large cities are large industrial facilities, and large industry has a significant impact on the environment. Quite often, however, when it comes to reducing CO2 emissions into the atmosphere, the focus is on gas treatment systems and monitoring plant emissions, often forgetting that the source of carbon dioxide is also waste storage and disposal facilities.

The Federal Environmental Protection Act provided for the disclosure of information on the state of the environment, but it is now the responsibility of state and municipal authorities to make this information publicly available (on their websites or through state information systems).

According to the norm introduced by the Federal Law № 39-ФЗ of 9 March 2021 “information on the state of environment (environmental information) — information (messages, data) regardless of form of presentation on environment, including retrospective, current and predictable state of environment, its pollution, processes and events occurring in it, as well as on environmental impact of current and planned economical and other activities and on conducted and planned events in the sphere of environment protection”. At the same time, environmental data cannot be classified as a commercial secret (such references are excluded from both the law on environmental protection and the law on commercial secrecy).

In particular, from 2021, regional and federal authorised bodies are obliged to publish information on stationary sources, on the level and (or) mass of emissions, discharges of pollutants, and on the management of production and consumption waste. Therefore, it seems that the transition to a carbon-free economy and reduction of emissions in the coming years is closely linked to the introduction of closed-loop economy mechanisms and the reduction of the amount of waste sent for disposal.

However, the goals of the cyclical (circular) economy and the existing sphere of production and consumption waste management in Russia have significant differences. Waste disposal is the final stage of the existing linear economy model (creation, use, disposal of waste). At the same time, the cyclic economy assumes the production of secondary material resources (hereinafter — SMR), rather than waste, as the last and simultaneously the first stage of the cycle. At present, the principle of formation of environmental legislation in the field of production and consumption waste management is focused on the linear economy and does not see the commodity in the place of waste.

At the same time, the cyclical economy at the current stage needs a partner and guarantor in the person of the state, rather than a controller. The current trends of introducing elements of the cyclical economy into the existing linear scheme do not lead to the formation of an independent and competitive cyclical economy in Russia.

It must be recognised that it is a strategic mistake to view the introduction of a cyclical economy in Russia solely as a tool for transition to zero-waste production. One of the most important goals of a cyclical economy is resource renewal. Among other things, this means switching from fossil fuels to renewable energy sources. The principles of the circular economy are to a large extent in line with the global climate agenda and have led to a significant reduction in greenhouse gas emissions. The reasons for the reduction of CO2-eq. in Russia’s cyclical economy are:

  • increase in the share of renewable energy sources;
  • reduction in the share of dirty processing industries (mining, beneficiation, sintering) due to increased use of SMR;
  • reduction of biogas emissions (over 70% are accounted for by CO2 and methane emissions) from municipal solid waste landfills (hereinafter, MSW) due to reduction of disposed waste;
  • reduction of vehicular emissions due to avoidance of non-renewable energy sources.

In Russia, legislation on the cyclical economy and greenhouse gas emission reduction is in its formative stages, and strategies in these areas involve significant technical upgrading of enterprises and changes in a number of technological processes. Given this fact, the correlation between the requirements of the cyclical economy and the climate agenda will reduce costs for enterprises and create uniform rules for industrial development.

The implementation of the circular economy and the climate agenda does not require the introduction of new quality standards for the components of the environment. The existing level of environmental legislation allows for the oversight of the effectiveness of the implementation of the cyclical economy and the reduction of greenhouse gas emissions. At the same time, it seems appropriate to expand the authority of the Russian Ministry of Industry and Trade and the Russian Ministry of Economic Development to provide economic and technological incentives to enterprises, as well as policy formulation, taking into account the interests of the market and domestic producers.

The President of Russia’s Address to the Federal Assembly on 21 April 2021. Putin’s message to the Federal Assembly of 21 April 2021 identifies the following strategic objectives, among others: to meet the challenges of climate change, to ensure the transition to a so-called circular economy, to reduce emissions into the atmosphere, to create our own technologies and standards in the areas that will shape the future.

The proposed tools of the circular economy not only can, but should, be applied to a variety of tasks. Several programmes, experiments and strategies are currently being implemented simultaneously with regard to environmental quality, resource efficiency and the green modernisation of the country’s industry.

“For the government, environmental, nature conservation and climate issues are a priority agenda,” said Victoria Abramchenko. — The President has set us a task to achieve one of the national goals ‘Comfortable and Safe Environment for Life’ by 2030. The Government of the Russian Federation Order No. 2816-r of 6 October 2021 approved a list of initiatives for socio-economic development of the Russian Federation until 2030. The List has a section “Environment”, which is represented, among others, by the initiatives “General Cleaning”, “Closed Loop Economy”, “Low-Carbon Development Policy”.

“The circular economy involves creating a system for recycling material resources and reducing the generation of solid municipal and industrial waste by a multiple,” explained Victoria Abramchenko.

On 2 July 2021, Federal Law No. 296-ФЗ on Limiting Greenhouse Gas Emissions was enacted in Russia. It establishes a system of state accounting of greenhouse gas emissions and mandatory reporting for large organizations emitting more than 150 thousand tons of CO2-eq. per year until 2024 and more than 50 thousand tons after 2024. The law also provides for companies to implement “climate projects” and issue “carbon units” for their implementation.

Back in 2017, a list of 12 major industrial cities (centres) with the highest air pollutant emissions was drawn up and included in the federal Clean Air project: Bratsk, Krasnoyarsk, Lipetsk, Magnitogorsk, Mednogorsk, Nizhny Tagil, Novokuznetsk, Norilsk, Omsk, Chelyabinsk, Cherepovets and Chita. By Russian Government Decree No. 1852-r of July 7, 2022, 29 more cities with high levels of air pollution were added to the list of participants in the emission-quota experiment. For the new participants, the project will start on 1 September 2023. The aim of the experiment is to halve the amount of hazardous pollutant emissions by 2030 compared to 2020.

In order to reach the level of the quotas, industrial enterprises in these cities will have to undergo modernisation. The cities participating in the experiment will also take measures, with financial help from the federal centre, to reduce emissions from the public utilities and transport sectors. Plans include converting residential buildings from wood and coal heating to gas or electric, repairing tramways and trolleybus networks, and buying more environmentally friendly models of public transport.

A comprehensive, balanced approach to decarbonisation, without the categorical over-reliance on strict limitations on industry alone, is the recipe for realising national policy objectives in adapting to climate change. In other words, when it comes to an individual city, emission reduction measures should not be aimed at increasing the contribution of a large enterprise to the treasury to compensate for its impact on the environment, nor at a dead-end situation for the enterprise to introduce the best available technology “here and now” or suspend activities, but at instilling a culture of green practices in the city by all economic actors, including through the introduction of elements of the cyclical economy.

As Jakob Michaelsen of Nordea Bank’s investment arm notes, ‘the greatest climate impact can be achieved not by forcing ... to become ‘super green,’ but by making dirty companies a little less dirty and perhaps a little ‘green.

Images: author's illustrations
Cover photo: Petr Kovalev / TASS

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