In connection with the situation in Ukraine, the new German Defence Minister Christina Lambrecht spoke in favour of toughening personal sanctions against Russia. And the new head of the German Foreign Ministry, Annalena Baerbock, announced the impossibility at the moment to approve the Nord Stream 2 gas pipeline.
For the newspaper Public Opinion (Vedomosti), Yuri Kofner, economist at the MIWI-Institute, on 20 December 2021 commented on possible countermeasures of Russia and the consequences of the climate policy of the new German government for the Russian economy.
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Potential counter measures
“In addition to hydrocarbons, Russia is an important supplier of various metals and chemical compounds. 5 to 27 percent of German imports of ammonia, platinum, copper and nickel come from Russia. At a time when supply bottlenecks for raw materials are already causing serious problems, an export ban on these raw materials could upset the German economy.”
“However, sanctions and counter-sanctions are a double-edged sword. Such export bans would probably damage the Russian economy more than the German one. In addition, Moscow should do everything it can to maintain its image as a reliable supplier of energy and raw materials.”
Consequences of the Green Deal
“Various studies show that the implementation of the European “Carbon Border Adjustment Mechanism” (CBAM) will hit Russian export industries such as metals, cement and fertilizers particularly hard and cost between 0.1 and 0.2 percent of GDP. The Kremlin must prepare for this by switching to the export of cheap hydrogen made with hydropower and nuclear energy.”
“However, Russia could also benefit from the EU-Green Deal if it could participate in a common emissions trading market and carbon sink programs, in which case revenues could boost the Russian economy by 0.5 percent.”
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Economists professor Dr. Hans-Werner Sinn from the ifo Institute and Dr. Vasily Astrov from the Vienna Institute for International Economic Studies (wiiw) also participated in the interview.
Source: Public Opinion (Vedomosti)