Burning Too

20190824_WOM905.png

Take a long hard look at this map, especially the upper right-hand corner, and then tell me why Brazilian President Jair Bolsonaro deserves a dressing-down from leaders of some of the world’s most powerful countries, while Russian President Vladimir Putin, guilty of the exact same indifference towards the forest wildfires raging over what, as the map suggests, is a much larger area in Siberia and the Russian Far East, has been criticized only by Greenpeace Russia and rank-and-file Russians living in the line of the fires and the enormous smoke clouds generated by them.

What has Putin ever done to deserve this indulgence?

When you have puzzled that one out, try and explain how four [ahn-TEE-fuh] musicians from Washington, DC, wrote the anthem for the summer of 2019 way back in 1989, that is, exactly thirty years ago, when many of today’s hottest climate changers were not even a gleam in their parents’ eyes.

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

We are consumed by society
We are obsessed with variety
We are all filled that anxiety
World would not survive

We gotta put it out, put it out, we gotta put it out
The sky is burning
We gotta put it out, we gotta put it out, put it out
The water’s burning
We gotta put it out, put it out, put it out
The earth is burning

Outrage
But then they say…

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

The world is not our facility
We have a responsibility
To use our abilities
To keep this place alive

We gotta put it out, put it out, put it out
The sky is burning
We gotta put it out, we gotta put it out, put it out
The water’s burning
We gotta put it out, put it out, we gotta put it out
The earth is burning

Right here
Right now
Do it
Do it
Now
Do it
Now
Do it
Now
Do it

Lyrics courtesy of Genius.com

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Greenpeace Russia: Siberian Wildfires Are Planetary Disaster

49754589_303A satellite view of the forest fires in Siberia, July 21, 2019. Courtesy of Deutsche Welle

Wildfires in Siberia becoming a planetary-scale disaster
Gismeteo
July 29, 2019

Grigory Kuksin, the head of Greenpeace Russia’s firefighting project, called wildfires in Siberia and the Far East a planetary-scale disaster.

Smoke from fires usually moves east or north, but this time it is moving west. Thus, the smoke has engulfed Siberian cities and has reached the Urals. The smell of burning is reported in the Volga Region and Tatarstan.

The wind that changed its direction is expected to bring the smoke to Kamchatka. It may even reach other continents across the ocean, which means it will become a planetary-scale disaster.

Kuksin believes that the smoke will continue to affect the region for a few more weeks. Heavy rain is needed to extinguish such a large fire, but no precipitation is expected.

The expert believes it necessary to reconsider the area of control and implement special measures to avoid similar situations in the future.

_________________________________________________________

Why There Are So Many Forest Fires in Russia
The scale and aftermath of the disasters are exacerbated by the consumerist mindset of authorities and the lack of resources in a weak economy
Vladimir Ruvinsky
Vedomosti
July 29, 2019

Dense smoke from forest fires has covered cities in Siberia, the Urals, and the Volga region. The fires could have been dealt with at an early stage, but regional authorities avoid fighting fires when they can avoid it due to a lack of money and means.

According to Greenpeace Russia, the fires have encompassed over three million hectares of forest, an area comparable in size to Belgium. The total for the spring and summer of 2019 is eleven million hectares, an area larger than Portugal. During this century, 2003 and 2012 saw worse fire seasons, but Grigory Kuksin of Greenpeace Russia says the records set during those years will probably be beaten this week. Usually, the smoke from the fires drifts towards the sparsely populated east and north. This year, however, the fires have attracted more attention since the smoke has drifted westwards, towards Novosibirsk, Yekaterinburg, Chelyabinsk, and Kazan.

The current fires are largely a consequence of decision-making by Russian authorities. More than 90% are the burning fires are located in so-called monitoring zones, areas where regional authorities may not fight fires if the expenditures on extinguishing exceed the damage they cause. This regulation was adopted in 2015 when Russian federal authorities basically legalized what had been an implicit rule during Soviet times. But the Soviet authorities had, in fact, fought fires in remote areas. Nowadays, regional governors are not officially obliged to fight them. They take advantage of this, especially because they lack money and equipment.

While Russia has lots of woodlands, its economy is too week to fight all forest fires. Kuksin argues that the gigantic monitoring zones could be decreased while increasing prevention measures and using available resources to better effect. Most fires are caused by people: they are mainly sparked when loggers burn residue wood in logging areas.  Such fires could definitely be put out immediately, but local authorities have made a practice of refusing to fight them. They are the major cause of the biggest fires, which have turned into insoluble problems that only the rains can solve.

The way the authorities see things, the anticipated costs of putting out fires in the monitoring zones are always higher than the damage caused by them. The damage caused by forest fires is primarily calculated in terms of the minimum price of timber. This cost can be written off (and if not, there is no damage), i.e., forest fires often cost almost nothing in terms of official damages. However, as Konstantin Kobyakov, an environmentalist at WWF Russia, points outs, Russia loses three times more forest in fires annually (three million hectares) than the forest industry removes (one million hectares), meaning the country already faces a deficit of woodlands that will only keep growing.

Kuksin recalls that gas and oil industry infrastructure, such as pipelines, is located in the monitoring zones, and uncontrolled blazes are approaching hundreds of villages and small towns. Damage assessment does not account for air and water pollution or the real harm caused to people’s health by acrid smoke, which is harder to calculate but does considerably increase mortality. In addition, stable high-pressure systems have formed over the gigantic fire zone in Siberia, triggering abnormally heavy rains along the perimeter. The fires generate a lot of greenhouse gases and soot, which accelerates the melting of arctic ice and climate change, meaning they increase the risk of more fires in the future.

Translated by the Russian Reader

“I Felt Like Going Up to Him and Spitting in His Face”

“I Felt Like Going Up to Him and Spitting in His Face”
Yevgeny Karasyuk
Republic
July 2, 2019

Torrential rains began falling in the western part of the Irkutsk Region early last week. When they were over, there was no doubt the bad weather had caused local rivers to rise, producing a major flood involving human casualties and large-scale damage.

The flood, which affected over ninety towns and destroyed at least a thousand homes, has been declared the most powerful in the region in the one hundred some years since the weather there has been systematically observed and recorded.

The flood put a crimp in President Putin’s schedule, probably even as he was attending the G20 summit in Japan, which wrapped up on Saturday.

He visited the flooded region the same day, but he had no intention of staying there for long. He never left the airport in Bratsk, a city that had also suffered from the flood, but which had not been inundated as disastrously as other cities and towns.

Putin’s visit to Bratsk on his way home to Moscow from Osaka was a logistical opportunity he could not pass up, of course. The Russian regime’s personification has long ago reached the point the populace regards the president as morally responsible for any high-profile disaster anywhere in the country.

Going where disaster has struck is thus a matter of political instinct. The president last showed his trust in it only six months ago in Magnitogorsk. The critics can accuse Putin of arriving at the sites of tragedies after they are over and visiting fake patients with arms demonstratively in slings, but he knows what he is doing.

He still finds the strength to board a plane so that, a few hours later, he can appear, stern-faced, before the cameras and issue orders at emergency meetings of local and federal officials. This is exactly what the president did late at night in Bratsk.

The speed with which Putin arrives at the epicenter of events, like the amount of time he spends there, matches the alacrity with which Russia’s press reports the news.

“Putin instructed the head of the Emergencies Ministry to fly immediately to Kemerovo.”

“Putin was informed about the tragedy in Magnitogorsk immediately.”

“Putin demanded that immediately, as of today, compensation be paid to the victims [i.e., the residents of the affected districts in the Irkutsk Region] and that an action plan for rebuilding housing and doing it as quickly as possible be outlined without delay.”

All the fuss testifies not to the might of the so-called power vertical Putin has fashioned but, on the contrary, to its weakness. It produces nothing remotely resembling independence, flexibility, and responsibility on the part of local authorities, especially when it comes to the safety of ordinary Russians. Putin continues to run our vast country manually, but the outcome of his administration is quite deplorable, as we can see.

irkutsk.jpegA satellite image, provided by Roskosmos, shows the parts of the Irkutsk Region affected by the flooding. Courtesy of Republic

It does not matter a whit where and when the president arrives, and how long he stays there because it happens after the fact. Russian authorities usually do nothing at the most crucial moments. In a country run by the security services [siloviki], a country where there are more experts in security than anywhere else, a country with a whole emergencies ministry, it can easily happen that you would not be warned of impending disaster.

According to the Emergencies Ministry, four out of ten Russians are still not covered by the early warning system. Its absence goes a long way toward explaining the disaster in Krymsk in July 2012 in which entire houses and their sleeping owners were swept away by flood waters in the middle of the night. While Moscow was fiddling around with modernization and digitalization, towns in Krasnodar Territory did not have radio transmitters at their disposal to sound warning signals and inform residents of the approaching flood.

Seven years have passed since the disaster in Krymsk, and what happened there has happened again in Eastern Siberia. Residents of the town of Tulun, in the Irkutsk Region, have claimed they were not warned about the impending flood, and so they did not have time to gather their belongings and flee their homes. Local officials, however, assured Putin everyone had been warned.

“I watched our mayor giving his report to Putin and I felt like going up to him and spitting in his face,” a local woman who could not contain her emotions told journalists.

Officials now say they knew nothing. Irkutsk Region Governor Sergei Levchenko said regional authorities were not informed of the dangerous rise in the levels of water in local rivers, while the Emergencies Ministry has claimed the opposite.

Officials argue nature is capable of catching anyone by surprise, including the Russian state. At Irkutsk State University, scientists said global climate change had caused the flooding. Arctic and subtropical air masses had mixed with humid air from the Pacific Ocean, something quite rare for the region, to produce the atmospheric anomaly that led to the disaster.

In fact, all that is required in such circumstances is that officials pretend they sympathize with the populace in its plight and are ready to help. But the authorities, disinclined by habit from bowing to public pressure, could not make such a sacrifice.

“What do you want me to say? Do you want me to complain? I can complain to you, too,” Alexander Uss, head of Krasnoyarsk Territory, retorted to local residents upset by their governor’s passivity.

Krasnoyarsk Territory was next in the flood’s path after the Irkutsk Region, but the floodwaters have begun to subside.

You can relax. Putin will not be paying you a visit.

Translated by the Russian Reader

Motherlandish

5568220a-c275-4d49-b6df-c8de6ceeee3aDenis Shtroo. Photo courtesy of Daily Storm

Darya Apahonchich
Facebook
March 15, 2019

Climate change demonstrations took place in many cities around the world today.

Schoolchildren and adults took to the streets to demand implementation of the Paris Agreement, which primarily aims to counter global warming.

Maybe you have heard of Greta Thunberg, the Swedish schoolgirl who organized the movement #fridaysforfuture by skipping classes at school every Friday and picketing the Swedish parliament instead.

It makes sense. What is the point of going to school if the future is threatened? Humankind has killed off 70% of wild animals in the past four years. The oceans contain more discarded plastic than fish. And the list goes on.

But what about Russia? In Russia, environmental activist Denis Shtroo has been murdered in Kaluga. He campaigned against the construction of new waste landfills.

Earlier today, an excavator ran over a trailer containing an activist, who, along with other activists, had been trying to stop garbage trucks shipping Moscow’s garbage to Arkhangelsk Region.

I really want there to be a future, but this is what it looks like.

Like no future at all.

Translated by the Russian Reader

The Penguins Can Fend for Themselves

vechorka-penguin

“There will be no global warming. Russian expedition continues to uncover the secrets of Antarctica.” Front page of the March 13, 2015, edition of Vechernyi Petersburg newspaper.

Earlier today, my comrade Louis Proyect posted a link on his Facebook wall to a Reuters article on the crazy extent of official and grassroots climate change skepticism and ignorance in the world’s biggest country. Here is a short excerpt:

Wildfires crackled across Siberia this summer, turning skies ochre and sending up enough smoke from burning pines to blot out satellite views of the 400-mile-long Lake Baikal.

To many climate scientists, the worsening fires are a consequence of Siberia getting hotter, the carbon unleashed from its burning forests and tundra only adding to man-made fossil fuel emissions. Siberia’s wildfire season has lengthened in recent years and the 2015 blazes were among the biggest yet, caking the lake, the “Pearl of Siberia”, in ash and scorching the surrounding permafrost.

But the Russian public heard little mention of climate change, because media coverage across state-controlled television stations and print media all but ignored it. On national TV, the villains were locals who routinely but carelessly burn off tall grasses every year, and the sometimes incompetent crews struggling to put the fires out.

While Western media have examined the role of rising temperatures and drought in this year’s record wildfires in North America, Russian media continue to pay little attention to an issue that animates so much of the world.

The indifference reflects widespread public doubt that human activities play a significant role in global warming, a tone set by President Vladimir Putin, who has offered only vague and modest pledges of emissions cuts ahead of December’s U.N. climate summit in Paris.

Russia’s official view appears to have changed little since 2003, when Putin told an international climate conference that warmer temperatures would mean Russians “spend less on fur coats” while “agricultural specialists say our grain production will increase, and thank God for that”.

The president believes that “there is no global warming, that this is a fraud to restrain the industrial development of several countries including Russia,” says Stanislav Belkovsky, a political analyst and critic of Putin. “That is why this subject is not topical for the majority of the Russian mass media and society in general.”

_________

This reminded me of a dismal interview I had read this past spring in Vechernyi Petersburg, a now-defunct local rag. (The front page of that particular issue of “Vechorka” is depicted at the top of this post.) I had thought about translating it at the time, but since I prefer to push stories that, however bleak, have a positive hook (meaning they feature an underdog or underdogs fighting the powers that be, whatever the odds), I thought better of it.

Now, however, that the official line seems to be run the country into the dirt as quickly as possible, I am kicking out the jams (at least, tonight). After all, somebody out there might be wondering why a country that should have everything going for it in terms of human and natural resources is trying so hard to become a failed state. Interviews like the one that follows—with a gentleman not only purporting to be a scientist, but a scientist charged with running the Russian Antarctic Expedition—might give you a clue.

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Global warming is a topic that bears no relation to reality
Valery Lukin, head of the Russian Antarctic Expedition, says Antarctica still holds many secrets
Sergei Prudnikov
March 13, 2015
Vechernyi Peterburg

The summer season of the Sixtieth Antarctic Expedition is coming to an end. The scientific research vessel Akademik Fyodorov is now making the rounds of the stations, supplying them with food, fuel, and materials for the coming eight or nine months. In early March, the ship left Progress Station. Its next stops are Molodyozhnaya Station, Novolazarevskaya Station, and Bellingshausen Station. In April, the Akademik Fyodorov will sail for the shores of South America, and on May 15, it will return to Petersburg. In anticipation of the completion of the latest stage of work, Vechernyi Peterburg met with Valery Lukin, head of the Russian Antarctic Expedition (RAE).

Valery Vladimirovich, what are the results of the 2014–2015 season? 

I must say right off the bat that employees of thirty-one organizations, representing ten federal agenices, are involved in the RAE. They include Roshydromet, Rosrybolovstvo (Federal Agency for Fishery), Roscosmos (Russian Federal Space Agency), Rosatom, the Ministry of Defense, and so. Work is underway on sixty-four projects, and each of them is significant. Nevertheless, I would note the drilling of a second borehole into the subglacial Lake Vostok and laying the foundations for installing new ground-based monitoring equipment for the GLONASS satellite navigation system. Interesting work has been done in the oasis of dry valleys,near the American McMurdo Station on the shore of the Ross Sea. They contain the most ancient varieties of permafrost on earth, thirty to forty million years old. Such polar caps exist in similar conditions on Mars. This gives us a unique opportunity for developing the technology to sample this material in the future. I should also note that the Russian Federal Ministry of Culture has implemented several of its own projects in Antarctica for the first time. One of them is the creation of the latest (the third) in a series of virtual branches of the Russian Museum for RAE personnel. The first was unveiled on board the Akademik Fyodorov; the second, at Novolazarevskaya Station; the latest, at Bellingshausen Station.

One of the priorities in Antarctica is the study of climate change. Why is it important? And how do things stand with global warming?

Indeed, it is extremely important. After all, what is the ice of Antarctica? It is compacted precipitation. By carrying out isotopic studies on it, we can track changes in temperature on earth, as well as the levels of methane and carbon dioxide that were in the atmosphere many years ago. Based on the research done on the ice core at Vostok Station, we have assembled a picture of climate change over the last 420,000 years. This included four complete climatic cycles: glaciation and warming with an average period of 100,00 years. We are now in an interglacial period, between peaks of cooling. But it is unclear how long this period will continue and whether it has reached its maximum. No one knows where we are headed. As for global warming, in my opinion, it is only a topic for speculation that is advantageous to businessmen, politicians, and journalists, and which bears no relation to reality.

But what about the movement of glaciers, which are, allegedly, melting furiously?

Glaciers are always moving. Near the Geographic South Pole, at Amundsen-Scott South Pole Station, they move at a speed of 11.5 meters a year. Near Vostok Station, they move at a speed of two meters a year. This is ordinary aerography: new ice forms, old ice flows. Now if it stopped moving, that would be something worthy of immediate attention. In the 1960s, Sovet scientists and their colleagues from Dresden took measurements of the glacier on a 100-kilometer segment of the track from Mirny Station to Vostok Station. Forty-four years later, the measurements were repeated. The ice had grown by forty-two meters! What melting are we talking about here?! As for speculation around a topic, let me remind you that, twenty years ago, all the media suddenly wrote about the growing hole in the ozone layer over Antarctica and the catastrophe it threatened. It was the owner of the large chemical company DuPont who had raised the issue. It was he who paid scientists to study the phenomenon. The scientists concluded that the reduction of the ozone layer had to do with Freon entering the upper atmosphere. Ultimately, this substance was banned. But Mr. DuPont created a new substance, Freon-141, which, by the way, is two and a half times more expensive than the “old” Freon. The problem of the hole in the ozone layer did not go away. But it has been forgotten: people with a stake in the matter performed the task assigned to them. The same thing is sure to happen with the topic of global warming.

Antarctica is an icy, barren continent. What is the practical benefit of researching it?

National security. The economic effects. Strengthening international prestige. With regard to safety, we are talking about ground support in the Southern Hemisphere for our space program. In Soviet times, this problem was solved by a special space fleet. A whole series of craft was built. Then they were scrapped. Using radar stations located in southern Russian, we can look into near-Earth space no farther than thirty degrees latitude south. If we talk about the economic effect, we could talk about developing fisheries in the Southern Ocean. One of the most valuable commercial fish in the world, the Patagonian toothfish, is found in these waters. It dwells at a depth of 600 to 1,200 meters, grows to a length of two meters, and weighs up 160 kilograms. The cost of one kilogram of this fish on the wholesale markets is sixty dollars. It is selling like hot cakes in Japan, South Korea, Hong Kong, and the US. From the 1960s to the 1980s, we were the leaders in catching it. In the 1990s, we virtually abandoned this field. The challenge now is to return. Finally, estimating the mineral reserves [in Antarctica] is an important taks. Our country’s economy is resource dependent. And if we do not keep up with the prospects of mining on earth, we have a lot to lose. We have to have our finger on the pulse.

The media periodically reports incredible events that are observed on the sixth continent. Either people disappear with enviable regularity or strange magnetic phenomena occur. What can you say about this?

These UFO publications cannot be taken seriously, of course. People have definitely not disappeared. Although there are a lot of mysteries. And we are going to encounter them again and again. Subglacial lakes, for example, were discovered a mere twenty years ago, and by chance. We were able to identify Lake Vostok due to a combination of seismic research, radar observations, and satellite measurements. It turned out that in the vicinity of Vostok Station the ice sheet was fairly smooth. There were hills all around, but here there was a flat slab, 250 kilometers long, 70 kilometers wide. Where does that happen? That is right: only on the water.

Valery Vladimorovich, many scientific programs are now feeling the pinch due to the difficult economic situation in the country. How has this affected the RAE?

Budget cuts to the expedition this year will amount to 10%. However, given the need to use foreign aircraft, sail into foreign ports, and pay with foreign currency, the real reduction in the budget will be 35%. Unfortunately, certain programs will have to be wound down. For example, we are planning no research and drilling work at Vostok Station. It is just too expensive. Boring into the subglacial lake and collecting water from it, something we have been so looking forward to doing, is not going to happen next season. In most other areas, research will continue.

Translated by the Russian Reader

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Valery Lukin, as it turned out, was much too sanguine about the effect of budget cuts on the RAE.

Russian Antarctic Expedition Halts Research Due to Lack of Funds
October 14, 2015
The Moscow Times

Russia’s state-funded Antarctic expedition has had to halt its research due to a lack of funding, the TASS news agency reported Wednesday, citing one of the scientists involved in the expedition.

“It’s not yet clear how long the research will be suspended for,” Ruslan Kolunin told TASS. He said that work on drilling a borehole in the ancient Lake Vostok has also been suspended. “The borehole is frozen at the moment, no work is under way there right now,” he was cited as saying.

The only research being carried out in the Antarctic as part of the expedition this year is a meteorite project by the Ural Federal University, Kolunin said. “That is financed by sponsors and the university, though,” he added.

Earlier this year, the expedition’s head Valery Lukin said that scientists wouldn’t be able to continue researching Lake Vostok during the next season, which lasts from December 2015 to February 2016, due to decreased funding, TASS reported.

The expedition, Lukin said, is financed directly from the federal budget. In 2015 it was allocated 1.18 billion rubles ($18 million), but in 2016 that will decrease to 1.061 billion rubles ($16 million), which he said was not enough to continue work at the lake.

Lake Vostok lies buried beneath a 3,769-meter layer of ice. Locating it and accessing its relict waters is considered one of the main discoveries of the expedition so far, the report said.

Hooked

Stuck on the needle: oil and gas account for 98% of Russian corporate profits
Pavel Miledin
September 24, 2015
rbc.ru

RBC’s rating of the 500 largest Russian companies shows the real value of the oil and gas industry to the domestic economy. The contribution of all other companies to total gains—46 billion rubles in 2014—amounted to less than two percent

Andrei Molodkin, Hope, 2009. Acrylic block filled with Russian crude oil, edition of eight, 56 x 20 x 11 cm. Image courtesy of priskapasquer.com

According to Rosstat, Russia exported almost 500 billion dollars’ worth of goods in 2014; oil and natural gas accounted for 42% of this sum. In 2014, oil and gas revenues accounted for 7.4 trillion rubles or 51.3% of the country’s budget. If you look inside the corporate sector, the dependence on the oil and gas sector is even more impressive.

According to data from the RBC 500, a rating of the largest Russian companies, released on Wednesday, the total revenue of oil companies in 2014 amounted to 19.8 trillion rubles or 35.3% of the total revenue of all the companies in the rating, but 97.7% of all net profit, or 1.98 trillion rubles. All other sectors accounted for a mere 46 billion rubles of net profit. If only net profit is taken into account as the outcome of domestic business activity, there are, essentially, no other industries in Russia.

Our Everything
According to Oleg Buklemishev, director of the Economic Policy Research Center at the Moscow State University economics department, the date once again reveal the key story of the interaction between the Russian economy and the state, the agent that redistributes oil revenues.

“The whole history of attempts to diversify the economy has come precisely to this,” says Buklemishev.

This once again confirms that talk of diversifying the economy has just been talk, he adds.

Andrei Movchan, director of the Economic Policy Program at the Carnegie Moscow Center, thinks there is nothing unusual about all this.

“Russia is an exporting country, and all other sectors of industry dwell in the shadows of the oil industry,” he says.

According to Movchan, this is particularly noticeable during a crisis, when currency prices for commodities continue to allow the oil sector to profit.

The oil and gas sector’s net profit in 2013 was also huge, but not to the same extent. Then it amounted to 79.2% of the overall net profit of companies listed in the RBC 500.

“The devaluation of the ruble is having an impact,” explains Natalya Orlova, chief economist at Alfa Bank.

Oil and gas companies, which sell their products for hard currency, have weathered the collapse of the national currency better.

Buklemishev draws attention to the fact that the beginning of 2014 was generally good for the economy, and the effect of the sanctions and falling oil prices began to impact Russian business in the second part of the year. As late as June 2014, Brent crude oil cost $114 a barrel, which helped the oil sector show good results.

It is all a matter of revalued hard currency, argues Oleg Vyugin, board chairman of MDM Bank.

“Oil companies are chockablock with hard currency,” he says by way of explaining their brilliant 2014 results.

It is no wonder the most profitable company was Surgutneftegaz. Due in large part to its revalued hard currency savings, it made 885 billion rubles of net profit, 43% of all profits among the RBC 500.

Crisis More Noticeable
Falling corporate profits among the RBC 500 companies reveal the crisis more vividly than official data. Profits fell by nearly half (45%) from 2013 to 2014: from 3.7 trillion rubles to 2 trillion rubles. However, according to Rosstat’s data, in 2014, profits of Russian companies fell by a mere 10%, from 6.5 to 5.9 trillion rubles. Moreover, according to official statistics, 72% of companies were profitable, while 28% made a loss. Among the RBC companies, the split was slightly different: 81% were profitable, while 19% were loss making.

Movchan argues the difference in the numbers may be due to several factors. There is a “sector bias” in the rating of the largest companies. By the end of 2014, the crisis had not yet reached several sectors, for example, the service sector, which is not represented in the rating due to the absence of large companies there. Buklemishev says the more noticeable drop in profits among RBC 500 companies speaks to the fact that business has been going through difficult times.

“Profit is still a controllable variable, and in a bad situation corporations might try and show less profit in order to pay fewer taxes,” he argues.

But a revenue growth of 14%—the RBC 500 companies earned 56 trillion rubles in 2014—is merely the outcome of high inflation.

“It is practically zero in terms of tangible results,” says Movchan.

Oleg Vyugin agrees with him. According to Rosstat, inflation in 2014 was 11.4% and GDP grew by 0.6%.

“The RBC 500 data, which show a slight real growth in revenue and a fall in profits, correspond broadly to the situation in the economy,” he argues.

Small Improvements
There are a few other things worth remarking on in the RCB 500 rating. In terms of revenue (or rather its equivalent, operating income), the financial sector came in second place after oil and gas. Banks and financial companies earned 6 trillion rubles in 2014, outpacing metals and mining. It would seem that a good result for the financial sector testifies to the diversification of the oil economy.

Movchan and Buklemishev note, though, that the financial system is a function of cash flows from the oil industry, just like, however, transport and retail trade. According to Buklemishev, in 2015, the performance of banks will not be so impressive, and the sector itself will make a loss. (In 2014, the banks and financial companies in the RBC 500 showed a profit of 13.1 billion rubles.)

Another trend economists are watching is the strong growth and high net profit margins (the ratio of net income to revenue) in the Internet and online retail sector (e.g., Yandex, Yulmart, Mail.Ru Group, and Wildberries). Here, net profit is more than 50% of revenue. The telecommunication sector has also performed well in terms of profitability (11%). With a profit margin of 10%, the oil and gas industry is only in third place.

The growth of e-commerce is, apparently, one of the few trends showing that a market economy can develop normally in Russia. Oleg Kuzmin, chief economist at Renaissance Capital, argues that growth in this sector is quite understandable: cash flows from the ordinary goods and services sector are being redirected to the Internet. Another reason is that the public has been attempting to reduce its expenditures by buying cheaper goods on the web. It is no wonder that economists have pointed out the low profit margin in the retail segment—3.5% in 2014.

It is interesting to see what yields more profit to foreign companies operating in Russia. Last year, they received 7.2 trillion rubles in revenue here and earned 211 billion rubles in profit. Despite the low margins, most of their profits came from retail trade (17%), the production and sale of alcohol and tobacco (17%), and finance (10.8%). How is that not a diversified economy within Russia’s oil economy?

Translated by the Russian Reader

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Russia rejects criticism of greenhouse gas plan, will not amend – top Putin adviser
Andrey Kuzmin
September 23, 2015
Reuters

MOSCOW, Sept 23 (Reuters) – Russia has rebuffed calls for a more ambitious plan to cut its carbon dioxide emissions after environmentalists branded its current pledge inadequate and backward looking.

The world’s fourth largest emitter of greenhouse gases, Russia pledged in March to keep its emissions at 25–30 percent below the level it generated in 1990, the year before the Soviet Union and its vast industrial complex collapsed.

Green groups say the pledge, made ahead of a global warming summit in Paris in December, is far too easy for Moscow to fulfill because 1990 was a time when Soviet industry was a notoriously prolific polluter whereas Russia’s industrial base today is much smaller.

A group of four global climate research groups, known collectively as Climate Action Tracker, have rated Russia’s pledge as ‘inadequate’, worse than the ‘medium’ assessment they have handed out to other big polluters such as China, the United States and the European Union.

But President Vladimir Putin’s top adviser on global warming dismissed such criticism during an interview on the sidelines of a Moscow meeting of the United Nations’ International Panel on Climate Change this week.

“It is their opinion, it does not reflect anything and is not objective,” Alexander Bedritsky told Reuters, saying Russia would stick to its current plan.

“They can say whatever they want, but our commitments are based on around 70 scenarios of how the climate system will be developing.”

It is unfair to compare the Kremlin’s commitments to those of developed economies such as the United States or European Union member states because Russia is still an economy in transition, he added.

Russia’s pledge stresses the importance of increasing energy efficiency and boosting the use of renewables.

“If the contribution of Russian forests is fully taken into account, limiting greenhouse gas emissions to 70-75 percent of 1990 levels by 2030 does not create any obstacles for social and economic development,” it says.

“TRAGIC PLEDGE”
With its gigantic reserves of oil, gas and coal, Russia emits 2 gigatonnes of CO2 equivalent a year, making it the fourth largest producer of greenhouse gases after the United States, China and India.

According to Greenpeace, 85 percent of CO2 equivalent emissions in Russia come from its energy industry.

They and other green groups say Russia’s current programme is far too unambitious because the Soviet Union was on the brink of collapse in 1990—the year the programme is pegged to—and its greenhouse gas emissions therefore fell sharply as the country’s industrial base shrank.

“This pledge is a tragedy, a catastrophe,” said Vladimir Chuprov, head of Greenpeace’s energy programme.

“With this 25–30 percent commitment they are basically saying: ‘Guys, we’re staying in the 20th century with our carbon-centered technology’.”

Chuprov and fellow environmentalists want Russia, the world’s biggest country by territory, to do much more, noting that its richest company—state-owned Gazprom—is the world’s leading corporate emitter of greenhouse gases.

ANDREI-MOLODKIN-artfair-superJumbo
Andrei Molodkin, Gazprom, 2012. Image courtesy of Orel Art, via Art Paris Art Fair

Specifically, Chuprov says Russia needs to expand its use of renewable energy and try to develop new power generating technologies or risk missing out on another technological revolution.

Currently, Russia gets 90 percent of its energy from carbon fuels such as oil, gas and coal, Chuprov said. Green groups estimate that only around 1 percent of the country’s energy needs comes from renewable sources.

Green groups such as Greenpeace or the World Wildlife Fund complain that central government in Russia does not consult them enough when it comes to formulating climate change policies.

Under its existing plan, Russia would fail to meet the goal set out by the United Nations’ International Panel on Climate Change to cut emissions to 50–80 percent below 1990 levels by 2050, he said.

Bedritsky said Russia was already making good progress and that its greenhouse gas emissions would peak at 25 percent below 1990 levels by 2020. They will then fall or stay flat until 2030, he added.

“Our preparations for the (Paris) summit are not just good, we have achieved excellent results, announced our commitments on time up until the year 2020, and until 2025 and 2030,” said Bedritsky. “We will definitely fulfill our promise.”

(Editing by Andrew Osborn and Gareth Jones)