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

Christophe Heyndrickx (), Victoria Alexeeva-Talebi and Natalia Tourdyeva
Authors registered in the RePEc Author Service: Natalia Turdyeva ()

No 12-052, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: 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.

Keywords: regional general equilibrium model; sustainable development; natural gas pricing; Russia (search for similar items in EconPapers)
JEL-codes: D58 H21 H22 Q48 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cis, nep-cmp, nep-ene, nep-env and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:12052

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