Economic transition and environmental sustainability: effects of economic restructuring on air pollution in the Russian Federation

Economic liberalization in former socialist countries may have various implications for their environmental sustainability. Positive effects of this process are potentially associated with improved efficiency, investments into cleaner technologies, responsiveness to environmentally aware markets, and ending subsidies to heavy industries. On the other hand, market liberalization may result in weaker environmental controls, economic instabilities distracting attention from environmental issues, and increasing orientation towards profit-making leading to more intensive exploitation of natural resources. In addition, trade liberalization may result in shifts towards more pollution and resource-intensive industries. rticle seeks to quantify effects of economic restructuring in Russia on air pollution from productive economic sectors in the 1990s. Air pollution in Russia had significantly declined in 1991–1999, however, this decline was largely due to economic decline, as the overall pollution intensity of the economy had decreased only slightly. The factors that affected the pollution intensity are: (1) a decrease in the combined share of industrial and transport activities in the economy and (2) changing pollution intensities of the industrial and transport sectors. llution intensity of the Russian industry had remained relatively stable during the 1990s. This was the result of the two opposite and mutually canceling trends: (a) increasing shares of pollution-intensive branches such as metal smelting and oil production vs. less pollution intensive manufacturing and (b) decline in pollution intensities within the industrial branches. The article proposes a methodology by which the contribution of both factors to the overall pollution intensity of the industrial sector can be quantified. llution intensity of the Russian transport sector appears to have declined in the first half of the 1990s and increased in the second half. The most recent trend can be explained by a rising proportion of private motorcars used for transportation of people and goods instead of traditional rail and other public transport. ndings of the paper demonstrate that shifts towards more pollution-, resource- and energy-intensive industries as a result of economic liberalization emerges as a significant negative factor of the process of economic transition threatening sustainability of emerging market economies. A research agenda to further investigate these impacts is proposed.