Russia Moves Toward Energy Efficiency

Parliament takes first steps to improve the energy-intensive economy. However, Russian authorities are beginning to recognize the unsustainability of an economic model based on natural-resource extraction, and to understand that improvements in energy efficiency would boost long-term economic competitiveness.
It also establishes a general rule that buildings and other structures should meet energy efficiency requirements when commissioned and during their subsequent operation.
It includes tax cuts for energy-efficiency improvements and heavy fines for violating its provisions.
However, the law has been criticized as too general, with detractors noting that it lacks sufficient incentives or publicity to gain industrial and popular support:
1. Weak municipalities. The law focuses on federal-level ministries and, like other aspects of the authorities' modernization agenda, retains a top-down approach. Yet most of the work to improve energy usage in Russia must be carried out by local authorities, in many cases including cities and other small municipalities. Russian municipal authorities lack the expertise, funding and administrative authority to implement energy-efficiency projects.
2. Closed energy markets. Ownership rights for energy delivery and distribution infrastructure are legally complicated and politically fraught. Private consumers can do very little to cut down on consumption and thereby compensate for rising energy costs unless they have the right to decide on energy distribution, insulation and other relevant infrastructure improvements. Absent a more transparent energy market, energy consumers have few options for moving toward greater energy efficiency.
3. Limited incentives. Likewise, incentives for small- and medium-sized enterprises and individual households to implement the new energy standards are lacking. It is often impossible for households to control significantly their energy usage because of a deficient institutional framework, unresolved property rights issues or failing infrastructure. Most Russian housing (both private and state-owned) was built with the assumption that residents would have access to cheap and centrally distributed energy.
4. Low public awareness. Furthermore, public awareness about the importance of energy efficiency is very low. In general, problems related to the environment and energy usage receive little attention on the major TV channels. As such, the government is likely to face difficulties explaining to Russians why they need to pay more for energy-saving lightbulbs, heating, electricity and fuel.

 "Forbes"