Dynamics of Carbon Markets in Russia and Southeast Asia: Nature-based Carbon Projects

Abstract

Russia and Southeast Asia are striving to accelerate economic growth and increase the manufacturing capacity within ecological and climatic constraints. For reaching carbon neutrality, both regions enforce nature-based potential by means of globally widespread market mechanism, i.e. carbon markets, which are interpreted in ideologically different ways, i.e. from totally free markets to the markets with rather high degree of intervention of the government and various institutions through governing and methodological regulations.

This article pursues two purposes. The first is to compare current approaches to using nature-based potential for achieving carbon neutrality in Russia and Southeast Asia. The second purpose is to locate these dynamics in the context of conceptual debates about the efficiency of carbon markets and nature-based offsets in dealing with the danger of climate change.  

The comparative analysis concerns the evolution and dynamics of carbon markets in Russia and Southeast Asia and reveals a number of similar features and outlines in forming demand and supply on nature-based offsets. Experience of both regions demonstrates that carbon unit trading is a rather politically and ideologically determined, depends on economic modernization, and far from being a neutral market mechanism, requiring considerable state participation. Emission reduction units’ issuance is far from being significant, that doesn’t allow to reduce total GHG emissions and seriously mitigate climate change. But if to take into account limited feasibility of non-market-based alternatives, then carbon markets appear to be the important factor of stabilization of emissions in the frame of the countries with significant state’s participation in economy, that refers to Russia and many Asian countries.