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To raise or not to raise? Impact assessment of Russia's incremental gas price reform

Heyndrickx, Christophe; Alexeeva-Talebi, Victoria; & Tourdyeva, Natalia. (2012). To raise or not to raise? Impact assessment of Russia's incremental gas price reform. ZEW Discussion Papers 12-052.

Heyndrickx, Christophe; Alexeeva-Talebi, Victoria; & Tourdyeva, Natalia. (2012). To raise or not to raise? Impact assessment of Russia's incremental gas price reform. ZEW Discussion Papers 12-052.

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The growing momentum for gas price liberalization in Russia is increasingly constrained by fears of potentially strong adverse impact that market-based price setting principle will have on the economy. Based on a novel multi-regional, multi-sector and multi-household computable general equilibrium (CGE) model of the Russian Federation, this paper presents a simple yet a flexible framework for evaluating gas price reform. We found that the reform is feasible at low economic cost, without greater disparities in terms of increased inequity within and between country's federal districts. Large redistributive impacts can arise from specific mechanisms to recycle revenues. In terms of global environmental credentials, gas price liberalization can bring Russia on a substantially more sustainable path. The potential to foster adoption of energy efficiency measures by exploiting the revenue-recycling effect is, however, limited.




RPRT

ZEW Discussion Papers 12-052


Heyndrickx, Christophe
Alexeeva-Talebi, Victoria
Tourdyeva, Natalia



2012




12-052







12-052




2291