Financial Journal Vol.14 No.5 2022
I.A. Yakovlev, L.S. Kabir, S.I. Nikulina
The National Strategy for Financing the Energy Transition: Assessing Opportunities and Finding Solutions, p. 9-24
This article examines the current trends and the state of development of the energy transition in the Russian Federation. This process presents many challenges and requires a country to develop a strategy for success. At the same time, the successful implementation of the energy transition requires a balanced solution for its organization and implementation and a clear economic calculation. The main purpose of the study was to systematize information on the organization and instruments of for financing the energy transition in the Russian Federation. Presented among the results of the planned modernization transformations of the economy, the energy transition must be considered in the system of existing relations to determine its role and place in this process. The article analyzes government decisions on the energy transition organization, describes key aspects of the modern energy agenda, and summarizes information on the main instruments of energy transition financing. The author concludes that Russia is shaping its energy transition agenda on the basis of competitive advantages and socio-economic development priorities. Regarding energy transition, the country currently adheres to the Paris Agreement, adapting cross-border carbon regulations. The system of organization of relations within the energy transition framework is only being formed in Russia today, while with regard to the funding mechanism there is some experience and groundwork formed in the organization of the financing process of the green economy. Financial flows are reoriented to sectors of the economy which ensure energy security, technological sovereignty and sustainable economic development of Russia.
Keywords: energy transition, organization of energy transition, financing of energy transition, cost of energy transition, government regulation, strategy, sustainable development
JEL: F64, O44, Q54, Q42
For citation: Yakovlev I.A., Kabir L.S., Nikulina S.I. (2022). The National Strategy for Financing the Energy Transition: Assessing Opportunities and Finding Solutions. Financial Journal, vol. 14, no. 5, pp. 9–24 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-9-24.
© Yakovlev I.A.. Kabir L.S., Nikulina S.I., 2022
Financial and Economic Conditions of the Energy Transition for the National Economy, p. 25-42
This study reveals the financial conditions and drivers of the energy transition in the world and in Russia. The purpose of the study is to characterize the essence, content and financial conditions of the energy transition for the national economy. The objectives of the article are to study the features of the energy transition models for developed and developing countries; to consider the impact of "sustainable financing" on the energy transition process; to identify the specific financial conditions and risks. It was found that two major concepts of the energy transition have been formed, reflecting the vision of the goals and timing of completion, conditions and financing formats. The analysis of global investments in the energy transition showed high investors’ optimism: the renewable energy sector is the most attractive; the Asia-Pacific region has become the largest region in terms of investment volume; more energy transition financing programs are implemented in the European Union. The author reveals relationship between policies to achieve carbon neutrality and the phenomenon of "sustainable financing" subject to the principles of ESG, which was expressed in the refusal of the world's leading financial institutions to finance any fossil fuel projects, which could lead to higher demands and direct pressure on the energy and oil and gas sector in developing countries. The main financial risks and financial losses that the Russian economy may face in process of energy transition are outlined. Russia, as the largest exporter of hydrocarbons, will have to adapt to the new conditions despite the unprecedented sanctions pressure on the financial system and the withdrawal of major investors from the oil and gas and electric power sectors. First of all, this is cooperation in the BRICS format — both in the energy and in the financing of infrastructure projects, including within the framework of the BRICS New Development Bank activities. State loans, subsidies, grants, tax incentives, etc. may be used as financial measures of state support for the energy transition.
Keywords: energy transition, sustainable finance, climate agenda, decarbonization, BRICS financial cooperation, ESG-risk
JEL: F65, H23, L94
For citation: Dovbiy I.P. (2022). Financial and Economic Conditions of the Energy Transition for the National Economy. Financial Journal, vol. 14, no. 5, pp. 25–42 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-25-42.
© Dovbiy I.P., 2022
Zh.A. Mingaleva, M.V. Sigova
Financial Aspects of the Implementation of the Fourth Energy Transition, p. 43-58
The key issue of successful implementation of any project, program or development strategy is the problem of sufficiency and timeliness of financing of all planned activities. The purpose of this study is to analyze the financial aspects of the implementation of the fourth energy transition in terms of assessing the potential and actual opportunities for financing various activities within the framework of the energy transition. The relevance of the topic of the article is determined by the fact that in the process of the energy transition carried out in the Western countries, primarily in the countries of the European Union, a contradiction has developed and is rapidly deepening between the main areas of financing of various groups of measures to implement the energy transition and the effectiveness of these investments. To achieve the goal of the study, traditional methods of economic analysis were used, including bibliographic, statistical, comparative and factor analysis, methods of graphical representation of data, as well as methods of formal and logical analysis. In the course of the study, the specifics of financing of the modern energy transition were investigated; an analysis of the main sources of financing was carried out, as well as an in-depth analysis of the features of financing activities to create new generating capacities and to achieve the goals of the European Green Deal. The authors identify the main problems and difficulties in financing of the energy transition, primarily related to the ability to accumulate financial resources in the required amount, to the achievement of economic efficiency of investment projects, as well as to the availability of sufficient funds for the implementation of major energy transitions.
Keywords: energy transition, green energy, green economy, Green Deal investment plan, financing of energy transition programs
JEL: Q54, Q56, Q58, Q52
Funding source: the article was prepared as part of the implementation of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) of the strategic academic leadership program Priority 2030.
For citation: Mingaleva Zh.A., Sigova M.V. (2022). Financial Aspects of the Implementation of the Fourth Energy Transition. Financial Journal, vol. 14, no. 5, pp. 43–58 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-43-58.
© Mingaleva Zh.A., Sigova M.V., 2022
L.D. Petrenko, B.Sh. Safarov
Prospects for Nuclear Energy in the Framework of Implementation of the Sustainable Development Concept, p. 59-70
The need to create an effective global energy structure that meets the current challenges of sustainable development and the growing demand for electricity implies an expansion of the use of nuclear energy potential and necessitates a more detailed study of the prospects for its development, taking into account the economic efficiency, high technology, environmental friendliness and safety of this method of power generation. The purpose of the study is to reveal features of, and identify opportunities for, the global nuclear power development in the conditions of increasing influence of the concept of sustainable development. The study substantiates the necessity and identifies features of the global nuclear power development, characterized by both intensification of capacity obsolescence processes and high degree of their significance in the overall energy structure under conditions of decarbonization. Given the need to achieve the Sustainable Development Goals, the authors justify the necessity of development and implementation at national levels of financial and economic measures in the design of energy markets, taking into account clean energy and the attributes of energy security of lowcarbon technologies, including nuclear energy, supported by the expansion of direct and indirect state participation. The issues considered have practical significance and social implications in terms of solving socioeconomic and environmental problems.
Keywords: global energy industry, nuclear power, sustainability, green energy, decarbonization
JEL: Н54, O13, P28, Q42, Q56
For citation: Petrenko L.D., Safarov B.Sh. (2022). Prospects for Nuclear Energy in the Framework of Implementation of the Sustainable Development Concept. Financial Journal, vol. 14, no. 5, pp. 59–70. https://doi.org/10.31107/2075-1990-2022-5-59-70.
© Petrenko L.D., Safarov B.Sh., 2022
S.S. Sudakov, S.S. Lazaryan, A.I. Votinov
EU’s Carbon Border Adjustment Mechanism: Assessment of Future Payments for Exporters, p. 71-88
Starting in 2026, the EU will introduce the Carbon Border Adjustment Mechanism (CBAM). Under this mechanism imports of certain products to the EU will be subject to a special fee based on the carbon intensity of these goods. This article is devoted to the quantification of payments under this mechanism for several countries in the Eurasian region: the EAEU member states, Georgia, Tajikistan and Uzbekistan. These countries were chosen due to the relatively high share of the EU in their exports. CBAM payments have a dynamic nature because certain parameters of the mechanism vary on an annual basis under the influence of a number of factors, for example, due to the annual change in the CBAM rate. According to the estimates obtained, the lowest aggregate CBAM payment accrues to imports from Armenia to the EU. Between 2026 and 2035 it is estimated 95.8 million euros (single CBAM pass-through rate into final prices in EU). The largest payment is estimated to come from Russia: it amounts to 97 billion euros over the same period (zero CBAM pass-through rate). The largest share of payments in exports to the EU is observed for Uzbekistan, Georgia, Tajikistan and Belarus. The largest share of payments falls on imports of metals (ferrous and non-ferrous), fertilizers, electricity and oil. However, the conclusion on products requires additional verification, since for a number of countries in the Eurasian region there are no high-quality and detailed data on the carbon intensity of certain goods.
Keywords: carbon border adjustment, trade policy, climate policy, export, sanctions, CBAM, EAEU
JEL: F13, H23
For citation: Sudakov S.S., Lazaryan S.S., Votinov A.I. (2022). EU’s Carbon Border Adjustment Mechanism: Assessment of Future Payments for Exporters. Financial Journal, vol. 14, no. 5, pp. 71–88 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-71-88.
© Sudakov S.S., Lazaryan S.S., Votinov A.I., 2022
Divergence of ESG Ratings: Foreign Regulatory Trends, p. 89-104
Studies show that correlations of ESG ratings provided by various rating agencies are fairly weak. The challenge related to disparities in ESG ratings often referred to as “divergence” of ESG ratings is widely discussed in academic and professional community. This divergence may lead to investment decisions made based on misleading information and thus, distort the re-orientation of capital flows into sustainable business. For this reason, there is a growing legislative and regulatory focus on ESG related issues, including the activities of ESG rating providers. The purpose of this article is to conduct a preliminary assessment of the approaches of foreign regulators in addressing the issue of divergence of ESG ratings through an in-depth exploration of this phenomenon and its sources. A careful study of the underlying factors of ESG rating disparities allows us to consider the identified foreign regulatory trends in the context of their focus on eliminating these factors. The methodology of the article is based on the review of the available academic literature and empirical research, study of ESG rating methodologies and analysis of adopted or proposed foreign regulatory requirements. A number of regulatory trends has been identified, which together shape the premise for the development of the regulatory framework of ESG ratings in the future. These trends include a strong focus on corporate ESG reporting and increasing transparency of ESG rating methodologies. However, elimination of the main sources of divergence are not among the tasks of the foreign regulators.
Keywords: ESG regulation, ESG ratings, sustainable finance, investment analysis, financial market, reporting
JEL: G11, G24, Q01, Q56
For citation: Khachatryan H.V. Divergence of ESG Ratings: Foreign Regulatory Trends. Financial Journal, vol. 14, no. 5, pp. 89–104 (In Russ.).
© Khachatryan H.V., 2022
S.A. Vasiliev, I.A. Nikonova, O.S. Miroshnichenko
Banks, Financial Platforms and Big Data: Development Trends and Regulation Directions, p. 105-119
The introduction of Big Data technology into banking activities is aimed at improving the efficiency of banks, improving business processes, however, it creates new risk factors and determines the need to transform regulatory approaches. The purpose of the article is to develop recommendations on the use of Big Data technology in banking, including the bank transactions using a financial platform, taking into account the need to ensure the stability of the banking sector at the macro and micro levels, and the development of the financial market. It has been established that Big Data technology is used in the management of banking risks, in the development of relationships with customers, the development of personalized products; in cost reduction. The use of Big Data defines new requirements for staff competencies. As a result of the analysis, the need for cooperation between banks, operators of financial platforms with specialized providers of cloud services, software, as well as fintech companies is substantiated. It was revealed that the implementation of Big Data technology increases the importance of model, reputational risks, third-party risks, unethical behavior, and cybersecurity. When using Big Data technology, banks are recommended to separate the data management function; the regulator — to expand the regulatory principles and approaches to the use of data in the construction, validation, adjustment of banking models based on Big Data technology, to the exchange of data and their protection, to the use by banks, operators of financial platforms of Open data, to the certification of specialized suppliers, interacting with banks; the legislator is recommended to develop a legal framework that regulates the formation and use of open data by economic agents.
Keywords: Big Data, bank, financial platform, fintech, open APIs, model risk, Open banking
Funding source: The article is being issued as part of the implementation of the strategic academic leadership programme “Priority 2030” at the Russian Presidential Academy of National Economy and Public Administration (RANEPA).
For citation: Vasiliev S.A., Nikonova I.A., Miroshnichenko O.S. (2022). Banks, Financial Platforms and Big Data: Development Trends and Regulation Directions. Financial Journal, vol. 14, no. 5, pp. 105–119 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-105-119.
© Vasiliev S.A., Nikonova I.A., Miroshnichenko O.S., 2022
The Evolution of Foreign Exchange Regulation and FX Control in Russia and the Prospects for Continued Liberalization of FX Legislation, p. 120-137
After thirty years of continuous evolution, following the conceptual reform in 2004–2007 and subsequent easing, the Russian system of FX controls has come to a point where many administrative barriers have already been removed, the residents’ duties to repatriate proceeds from export of goods, except for FX proceeds from raw materials, are being cancelled, and bureaucratic procedures have been streamlined. At this point, the question is raised of what other steps in the field of liberalization of FX controls can be taken in the first place to achieve the ever more urgent goal of developing nonresource exports. The article analyzes the purposes of regulation, describes the evolution of the system, examines experts’ opinions regarding the course of reforms, and concludes with a view of the rational prospects for reforming the system. The central problem is the continuation and expansion of the automatic exchange of financial information between the tax authorities of Russia and foreign countries, which, in particular, would help limit fiscal risks when eliminating the remaining residents’ repatriation duties.
Keywords: FX controls, liberalization, repatriation, foreign accounts, exchange of fiscal information
JEL: F38, O23, O24
For citation: Cherkasov V.Yu. (2022). The Evolution of Foreign Exchange Regulation and FX Control in Russia and the Prospects for Continued Liberalization of FX Legislation. Financial Journal, vol. 14, no. 5, pp. 120–137 (In Russ.). https://doi.org/10.31107/2075-1990-2022-5-120-137.
© Cherkasov V.Yu., 2022