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Macroregional sustainable development on the
basis of public-private partnership mechanisms
Viktor Prokhorov1, Ivan Rozhnov1,2*, Olga Maslova1, and Anna Kuklina1
1Reshetnev Siberian State University of Science and Technology, 31, Krasnoyarsky Rabochy Av.,
Krasnoyarsk, 660037, Russian Federation
2Siberian Federal University, 79, Svobodny av., Krasnoyarsk, 660041, Russian Federation
Abstract. The subject of the research is issues related to environmental
problems in the forest complex of the Yenisei Siberia macroregion. The
study examines the experience of implementation of the national project
"Ecology" in the Russian Federation. In this national project, the results of
the implementation of the federal project "Introduction of the best available
technologies" were studied and conclusions were drawn regarding the early
closure of this federal project by the Russian state. In particular, it was
concluded that blind copying of the European Union legislation applied in
the Russian forestry sector could not lead to the successful implementation
of the federal project "Introduction of the best available technologies". This
is due to the fact that a number of promising technologies, which allow to
effectively solve environmental problems in the national forest industry,
were outside the scope of this federal project. It was proposed to use a
number of its mechanisms within the framework of public-private
partnership to solve environmental problems of the forest industry of the
Russian Federation.
1 Introduction
Currently, the number of problems associated with the instability and volatility of the global
economy is increasing in the world. Significant changes not for the better are taking place in
the international financial and commodity markets, which affects the development of entire
sectors of economy in various regions of our planet.
These processes are further superimposed by the growth of environmental and
demographic problems, as well as the results of scientific and technological progress, which
changes the existing structure of production and consumption. All this makes it necessary to
adjust both the global development system as a whole and its specific regions.
In this regard, in September 2015 the United Nations Assembly adopted a resolution
“Transforming our world: Agenda for Sustainable Development till 2030”, which identified
17 goals for sustainable development of the world and 169 related targets. At the same time,
a significant part of these goals and objectives were devoted to solving environmental
problems facing humanity, including the fight against climate change and its consequences,
* Corresponding author: ris2005@mail.ru
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© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative
Commons Attribution License 4.0 (https://creativecommons.org/licenses/by/4.0/).
the protection and restoration of land ecosystems, the conservation and rational use of water
resources, etc. [1].
In accordance with this UN resolution, in 2017 the Russian Federation adopted the
“Strategy for Environmental Safety of the Russian Federation for the period until 2025”, and
in 2018 it adopted the national project “Ecology” (NP “Ecology”), consisting of 11 federal
projects (FP). In addition, the Russian state adopted a number of program normative
documents that directly or indirectly set tasks for solving national environmental problems.
Within the framework of the NP “Ecology”, the Russian Federation is implementing large
environmental projects that are in many ways similar in their goals and objectives to those
projects that are being implemented in the European Union (“The European Green Deal”),
which received the common name “decarbonization of the European economy”. They are
also aimed at developing a resource-efficient low-carbon economy, which involves reducing
emissions of carbon and other greenhouse gases, as well as solving specific environmental
problems, including the elimination of environmentally hazardous facilities in the country
and preventing the emergence of new ones, etc. [2].
But at the same time, Russian projects have their peculiarities, which include mechanisms
used to solve existing environmental problems. Their list in the Russian Federation in relation
to foreign practices is quite short. This is mainly due to the fact that environmental problems
in the RF began to be addressed systematically relatively recently. Therefore, the Russian
environmental legal framework has not been fully developed.
The mechanisms based on public-private partnership (PPP) are poorly represented in it.
At the same time, foreign practice shows that it is PPP that more effectively solves both state
and public problems, including those in the environmental sphere. Of course, there are certain
disadvantages associated with the fact that the state excessively transfers its functions in the
environmental sphere to private business. Under Russian conditions, this is not quite
acceptable. Statistics show that private business sometimes shies away from fulfilling the
functions stated in PPPs that do not bring direct income. And ecology is precisely one of such
functions.
2 Purpose of research
The purpose of the research is to develop an effective system for environmental problems
solution in the macroregion on the basis of public-private partnership.
3 Material and methods of research
It should be noted that environmental problems in the Russian Federation sometimes have an
industrial focus, that is, they are caused by the activities of enterprises in a certain industry.
In many ways, this also applies to such an important for the country economic sector as the
forestry complex. Environmental problems arose there quite a long time ago, back in the
Soviet period. They constantly accumulated not only in the last decades of the post-Soviet
period, but also much earlier. Here the forest complex of the Krasnoyarsk Territory can be
considered as a typical example that allows us to characterize the general state of affairs in
the forestry sector of the country and the Yenisei Siberia macroregion, since environmental
problems in the region are typical for all forest subjects of the Russian Federation.
In the forest complex of the region, a number of sometimes interrelated problems can be
identified, the main of which is, firstly, the increase in the weakening and death of forests,
which are actually the “lungs of the planet” and affect the weather and climatic conditions as
well as the animal world not only in Russia, but in other countries. According to statistical
data in the Krasnoyarsk Territory during 2009-2017, the area of damaged forest stands
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increased more than 2 times and amounted to 738,601.1 hectares, and the area of dead forest
plantations reached 291,662.8 hectares, which is comparable to the area of a small European
country [3].
Weakening and death of forests is associated with a number of factors. One of them is
forest fires, which in the period under review led to the fact that the total area of forest
weakening and death was 309,426.5 hectares and 201,262.3 hectares, respectively. Another
factor is the mass reproduction of the Siberian silkworm, the Ussuri polygraph and a number
of other pests, which led to the weakening and death of forests on areas of 316,378.2 hectares
and 85,527.2 hectares, respectively. Conventionally, the third factor includes forest diseases,
as well as weather and soil-climatic conditions, which led to the weakening and death of
forests, respectively, on areas of 90,297.6 hectares and 3,138.9 hectares. As a result, this leads
to additional carbon emissions instead of reducing them [3].
Secondly, due to the weakening and further drying out of the forest, there is an
accumulation of fire-hazardous materials, which lead to uncontrolled and prolonged fires in
the region. They significantly change the species composition of forests, which reduces its
productivity. Smoke from forest fires in the Krasnoyarsk Territory and other Siberian regions
reaches not only the large cities of Siberia (Krasnoyarsk, Irkutsk, etc.), but also spreads to
the European part of the country, Kazakhstan, Alaska, Canada and a number of other regions.
All this leads to an increase in carbon-containing gases in the atmosphere, which affects
not only the quality of life of the population, but also mainly disrupts the heat exchange
system of the atmosphere. As a result of such smoke, the melting of ice in the Arctic and
permafrost on the mainland accelerates. All this leads to the destruction of buildings and
structures erected on permafrost, which in its turn causes man-made accidents and disasters
on a federal and global scale, such as the depressurization of a diesel fuel tank at CHPP-3 in
the vicinity of Norilsk. As it is known, about 20 thousand tons of diesel fuel leaked out of the
tank, which created a serious threat to the entire ecosystem of the Arctic Ocean.
Thirdly, waste associated with the activities of the forestry complex has been
accumulating in the region for decades. Statistics show that annually there is an increase in
the volume of accumulation of such waste in the region by at least 2-3 million tons. They
accumulate, as a rule, in populated areas where primary wood processing is carried out.
There, due to non-compliance with safety measures for the warehousing and storage of
these wastes, they ignite, which in turn causes a sharp deterioration in the environmental
situation (the “black sky” effect) in a number of settlements (Kansk, Krasnoyarsk, Minusinsk,
etc.). This leads to material damage among legal entities and individuals and, in general, to a
decrease in the quality of life of the population. Moreover, these wastes are valuable raw
materials for the wood chemical industry, the production of biofuels, animal feed, etc. [3].
4 Research results
It should be said that the state is trying to solve existing problems. A legal framework has
been created for this purpose. A number of federal projects has been included in the NP
“Ecology”, namely, the FP “Forest conservation”, the FP “Implementation of the best
available technologies” (was completed ahead of schedule in 2020) and a number of other
projects. In addition, there is a state program of the Russian Federation “Development of
forestry”, a number of decrees of the Government of the Russian Federation related to
forestry and others.
The peculiarity of these regulations is that they propose to solve environmental industrial
problems through the use of extra-budgetary sources, actually, through the use of public-
private partnership mechanisms.
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In particular, in the NP “Ecology” as a whole the share of extra-budgetary sources is about
80%. The largest share of these sources was contained in the federal project “Implementation
of the best available technologies.” It was up to 88%.
Great hopes for the use of extra-budgetary sources in the NP “Ecology” and especially in
the FP “Implementation of the best available technologies” were not destined to come true.
In particular, the most extra-budgetary project of the FP “Implementation of the best available
technologies” was closed ahead of schedule by the Government of the Russian Federation as
it was found ineffective.
However, it should be said that this decision was timely and objective. This is due to the
fact that it was proposed to use only one mechanism to stimulate extra-budgetary financing,
namely, only subsidizing the interest rate on issued bonds.
At the same time, this subsidy itself had certain limitations. It was due to the fact that
subsidies were made only if the loan funds attracted by the issuer were used to solve
environmental problems using new, “cleaner” technologies for the manufacturing of products
or the provision of services, which were called “best available technologies” (BAT).
It should be noted that the concept of BAT was introduced into circulation by the Federal
Law “On Environmental Protection” in 2002. Subsequently, it was expanded by the Decree
of the Government of the Russian Federation of December 23, 2014 N 1458, which described
the procedure for the best available technologies application in practice.
All this gave rise to the formation of a general list of BATs. They were defined in the
“Information and technical directories of the best available technologies” (ITD BAT),
approved by the Federal Agency for Technical Regulation and Metrology.
It is these technologies described in these reference books that fell under the FP
“Implementation of the best available technologies.” At the same time, the size of the bond
subsidy within the framework of this federal project could not exceed a certain amount. It
was determined based on 70% of the basic indicator determined by Decree of the Government
of the Russian Federation of July 20, 2016 No. 702, or 90% in accordance with the Decree
of the Government of the Russian Federation of July 17, 2015 No. 719 [2].
In general, it should be noted that the very concept of BAT was first introduced into
circulation by the Council Directive of the European Union 96/61/EU of September 24, 1996
“On integrated pollution prevention and control.” There, the most hazardous industries from
an environmental point of view were identified, including: energy industries; metal
production and processing; processing of mineral raw materials; chemical industry; etc. This
list of production activities actually became the basis of Russian BAT [4].
This blind copying of the EU BAT list did not lead to a good result in the Russian forestry
industry. In general, their use has been limited. These technologies, in accordance with ITD
BAT, applied only to the production of cellulose, wood pulp, paper, and cardboard. A number
of promising technologies that make it possible to more effectively solve environmental
problems in the forestry industry turned out to be excluded. This applies to the production of
liquid and solid biofuels, feed yeast, self-degradable packaging materials, etc.
All this led to the fact that the effectiveness of the FP “Implementation of the best
available technologies”, and indeed the NP “Ecology” in general, decreased. In the first year
of operation of the NP “Ecology”, about 66% of the planned annual budget was spent. In
2020, this trend continued. But in subsequent years the situation in NP “Ecology” was
corrected. And by the end of 2022, 99.7% of all allocated funds were spent.
But in the FP “Implementation of the best available technologies” the negative trends
were never overcome. In difficult economic conditions, the Russian state began to reconsider
the expenditure of public funds. The Russian government began to sequester costs in areas
that were not effective from the state’s point of view, which led to the early closure of the FP
“Implementation of the best available technologies”.
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5 Discussion
In general, the situation in the environmental sphere of the national forestry sector continues
to be difficult. In order to change the situation for the better, a certain set of measures should
be taken within the competences of both the state and the federal subjects. In their
development and further implementation, various mechanisms of public-private partnership,
which have already proved their effectiveness in practice, should be more widely used.
When selecting them, it is necessary to carefully consider the practice of application of
these partnerships in other countries. The available foreign practice shows that different
countries have their own peculiarities in their application. At the same time, despite their
national peculiarities, the applied public-private partnerships have certain common features,
which allow to single them out into typical groups.
The first group includes partnerships in which various kinds of tax mechanisms are used.
Their range varies from tax sanctions to granting various kinds of tax incentives. For
example, the European interstate association (European Union) applies the practice of
cancellation of value added tax when purchasing autonomous generators using renewable
energy sources (RES). In addition, companies that use these generators have the opportunity
to accelerate their depreciation (up to 50% of their cost can be written off within the first
year).
In European countries and in countries on other continents, people are granted a number
of tax exemptions when they participate in various environmental projects. This applies
primarily to income tax, property tax and a number of other taxes.
In addition to incentives, a number of countries apply tax sanctions. In particular, in the
UK, additional taxes were introduced to incentivise economic entities to participate in
environmental activities. A new tax was introduced there when enterprises use energy
resources that emit carbon dioxide. At the same time, enterprises using RES were generally
exempted from paying this tax [5, 6].
The next group of partnerships is based on the use of additional state aid in case of their
environmental orientation. A fairly wide range of additional state aid is used here. These
include the provision of various types of subsidies, including reimbursement of costs of
interest rates on loans, etc. Subsidies can also be obtained for reimbursement of costs,
including pre-investment costs for environmental projects, as well as for the use of the best
available technologies, etc. [5].
Another group of partnerships uses differentiated preferential tariffs as additional
assistance from the state. Such incentives are widely used in the European Union, especially
in the transport sector. Their essence lies in the fact that by reducing tariffs for the carriage
of goods the redistribution of freight flows between certain types of transport means is carried
out. In particular, favourable tariffs are available for electric railway and water transport. As
a result, part of the cargo is transferred from road and air transport to railway and river
transport, which reduces carbon dioxide emissions into the atmosphere of the planet [5-7].
The fourth group of partnerships uses market-based quota mechanisms in their activities.
The essence of these mechanisms is that the state provides power generating enterprises with
certain quotas for the production of electricity from RES. This practice is widespread in the
European Union. There, in particular, by 2025 it is assumed that more than twelve per cent
of electricity should be produced on the basis of RES. In case of violation of this indicator,
the guilty party will be obliged to purchase a so-called environmental document - a "green
certificate". This will cover the detected violation. As a result of their purchase, enterprises
bear additional costs, which in turn stimulates wider use of renewable energy sources.
It should be noted that the issuers of the certificates are state authorities that act as
regulators of the electricity generation and redistribution market in their own countries. They
issue these certificates to enterprises producing electric energy on the basis of RES [6-8].
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In addition to the mechanism of issuing carbon dioxide emission quotas, the carbon
dioxide emission quotas are actually traded on the stock exchange. It is based on the fact that
some energy enterprises have their surplus, and others have their deficit, i.e. there is a certain
supply and demand for them. This, in turn, leads to the formation of a certain segment of the
market and the relevant infrastructure ensuring transactions with these certificates. In the
European Union, the European Emissions Trading System has been acting as a trading
platform since 2005 [6, 8].
There is a group of partnerships where there is actually direct financing by the state of
environmental projects implemented by entrepreneurs. The state, through its own
development institutions, provides loans either at a minimum interest rate or without interest
at all. One of the conditions for receiving these loans is that they are used for the intended
purpose, e.g. for the purchase of renewable energy generating equipment.
The state also applies guarantees for loans to private business in commercial banks, if
they are aimed at financing projects in the environmental sphere, etc. Grant mechanism for
environmental projects is also used, which also stimulates project activities in the
environmental sphere [5-7].
There is also a group of partnerships where green bonds are used. Their peculiarity is that
they are issued to finance projects in an ecological environment. They are issued on the basis
of certain principles, standards, etc., with the participation of specialised organisations. The
financial resources raised through their issue are channelled into environmental projects.
Their issuers can be the state, municipalities, corporations and international financial
institutions. Together they have issued such securities for the amount of up to 300 billion
euros [6].
Of course, in Russian practice, not all of the above-mentioned mechanisms of public-
private partnership are applicable in the environmental sphere, including in the forestry sector
of the country. But still, some of them, taking into account certain modifications, can be
applied in the national forestry sector.
For more effective use of public-private partnership mechanisms in solving
environmental problems in the forestry sector, both in the country and in Yenisei Siberia,
they should be applied on the basis of such an institution as an industrial cluster. The main
focus of this industrial cluster should be the recycling of forest industry waste allowing to
produce such popular products as artificial yarns and fabrics based on them, biofuel, fodder
yeast, etc.
For the successful development of such an industrial cluster, additional measures of state
support should be applied using the above-mentioned foreign experience (tax, tariff and
others). Their use will allow to stimulate economic activity of the enterprises included in the
industrial cluster for forest waste processing, which will allow not only to solve sectoral
environmental problems, but also in general will increase the activity in the forest complex
of Yenisei Siberia.
6 Conclusion
It should be said that in the formation of an industrial cluster for processing of forestry waste
on the basis of PPP a special place should be given to the state. The state is obliged to create
the most favourable conditions not only for the formation of such a specialised industrial
cluster, but also for its subsequent development.
All this in general will allow not only to effectively solve environmental problems in the
territory of the Yenisei Siberia macro-region, but also in general the problems of
entrepreneurship development in the forest complex. Therefore, the proposed approaches
may be of interest to all interested parties, both public and private.
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