ENVIRONMENTAL INDUSTRIAL POLICY IN RUSSIA: ECONOMIC, RESOURCE EFFICIENCY AND ENVIRONMENTAL ASPECTS.

In Russia, industrial policy is the strategic effort of the government to encourage the development and growth of the manufacturing sector aimed at making it innovative, internationally competitive and sustainable. New regulatory instruments have been gradually developed and used for 5-7 years; this period is sometimes addressed as ‘the national neo-industrialisation’. In advanced industrial countries, environmental modernisation theory is often considered as a possible solution to the key environmental problems. It assumes that regulation can help to minimise environmental impacts while making industry more competitive. In theory, this can be achieved if regulation encourages the development and application of innovative technologies and production techniques. Environmental industrial policy (EIP) as the effort to encourage the fundamental change in resource efficiency and environmental performance of the industrial sector, has to help companies to overcome the considerable barriers to innovation which prevent them from moving beyond ‘end-of pipe’ techniques to consider cleaner technologies, from complementing technological change with organisational change and from exploring the strategic as well as the operational opportunities for improvement. The concept of Best Available Techniques (BAT) and Integrated Pollution Prevention and Control (IPPC) is seen as one of the key instruments of the modern EIP. Since industrial sectors show substantial variation in resource consumption (efficiency) and pollution impacts, and EIP instruments applied to encourage industrial development and to minimise industry's burdens on the environment need to be ‘tailor-made’, supporting innovation and cleaner production and leading to the internalisation of external costs caused by pollution and over-consumption of natural resources. Internationally, there are examples of combined economic and environmental improvement in industry as a result of the implementation of BAT and IPPC, particularly where expert community and even environmental inspectors have helped to develop the capacity of regulated companies to respond to the regulation. Still, EIP while encouraging technological and organisational changes, often fails to establish the environment as a strategic concern in industry. This is why special incentives are needed to promote the radical innovations that are associated with the environmental modernisation in the longer-term. Forming its EIP, Russian policy makers study lessons learnt by the international community moving the industry toward the best performance that is technologically possible and environmentally sustainable and look for the informative macro-indicators that can prove (or disapprove) that the industrial strategy and business environmental reform can be compatible. [ABSTRACT FROM AUTHOR]