Abstract
Our research investigation shows the possible pathways of natural resource economy with respect of externalities. We analyzed the development of agricultural and forestry products’ export from Russia to China, and the externalities were evaluated as greenhouse gas emissions. We developed five scenarios of Russian economic development until 2030 and 2050 on terms of domestic improvements in soy, rapeseed and corn production, wood production, increase of exports to China. After applying the partial equilibrium model we introduced a correct measure of possible profit by a monetary value of emitted greenhouse gas. In contrast to previous research instead of carbon tax we suggest a measure of social cost of carbon. Our estimates show that it could be effective at 68 USD per 1 metric ton of CO2 equivalent. This method was supposed to evaluate correctly the economic loss from extensive development of forestry and agriculture, taking into account monetary evaluation of externalities. Our results showed that extracting natural resources should be balanced by appropriate ecological programs. This could include but should not be limited to conservation of some part of the territory, which will help to decrease overall GHG emissions, and improve the balance of emissions with respective carbon sequestr on abandoned (conserved) land, which here will be an additional indicator of reducing negative externalities.
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