Russian experience in applying environmental payments in the context of fiscal regulation of business involvement in ESG processes

Advokatova Alena Stanislavovna ORCID: 0000-0002-4358-4005 PhD in Economics Associate Professor; Department of Taxes and Tax Administration; Faculty of Taxes, Audit and Business Analysis; Financial University under the Government of the Russian Federation 49/2 Prospekt Leningradskiy str., Moscow, 125167, Russia asadvokatova@yandex.ru Goncharenko Lyubov Ivanovna ORCID: 0000-0002-9872-3279 Doctor of Economics Professor of the Department of Taxes and Tax Administration; Faculty of Taxes, Audit and Business Analysis; Financial University under the Government of the Russian Federation 49/2 Prospekt Leningradskiy str., Moscow, 125167, Russia lgoncharenko@fa.ru

Zavorikin Aleksei Alekseevich PhD in Economics Assistant of the Department of Taxes and Tax Administration; Faculty of Taxes, Audit and Business Analysis; Financial University under the Government of the Russian Federation 49/2 Prospekt Leningradskiy str., Moscow, 125167, Russia aazavorykin@fa.ru

Description of the problem

The State environmental policy is based primarily on such documents as the Constitution of the Russian Federation, the Federal Law "On Environmental Protection", Decree of the President of Russia "On the Concept of Transition of the Russian Federation to Sustainable Development" (dated April 1, 1996 No. 440), Decree of the Government of the Russian Federation dated August 31, 2002 No. 1225-r "On the approval of the Environmental Doctrine of the Russian Federation", as well as other normative legal acts. As a result, a system of direct and indirect environmental protection instruments has been formed. At the same time, the domestic system is similar in composition and nature to the measures of a group of developing countries. As in India, Vietnam or China, protectionism plays a significant role in Russian practice.

The domestic system assumes careful steps in the field of correcting environmental externalities, preventing the deterioration of the situation of large producers. Revenues from fiscal instruments of environmental protection activities are insignificant, amounting to less than 1% of the country's GDP. Environmental instruments are also used indirectly, for example, excise taxes on gasoline. A distinctive feature of the Russian experience is the high level of detail of the types of harmful effects and the widespread use of rationing in terms of the maximum permissible amounts of harmful effects ^[1].

At the same time, the impact of domestic fiscal instruments on the behavior of organizations in the field of nature protection is currently expressed implicitly and requires additional research. Special attention needs to be paid to the assessment of the benefits, preferences and exceptional provisions applied, which, according to the idea of the legislative authorities, should stimulate the transition to the best available technologies (hereinafter – BAT), a departure from "polluting" economic practices, i.e. the element "E – ecology" in ESG coordinates.

Methods, information base and research conditions

The study of the involvement of domestic businesses in ESG processes is based on open sources of information that do not directly affect the private information environment of large enterprises. Characteristic conditions at the current stage of the study are such factors as lack of information regarding the application of a number of departmental parafiscalities in practice regarding the implementation of ESG goals, partial closure of corporate fiscal information, lack of public analysis of the results of the application of certain environmental fiscal payments in relation to the environmental component of industrial policy. Difficulties are associated with the cautious transition of companies to ESG standards, with the exception of the largest representatives of the market, and, possibly, with the lack of valid results of the impact of environmental fiscal payments on business involvement in large projects related to energy transition, the introduction of BAT or obtaining effective returns from BAT.

We also note the insufficiency of the information base in the context of the period of application of fiscal payments to assess their impact by means of economic and statistical modeling. The total number of years in the time series of data does not exceed 11, while some data (payment for emissions of pollutants into the atmosphere, payment for discharges of pollutants into reservoirs) in various accounting documents of the Ministry of Finance of the Russian Federation are presented fragmentally or are missing for a number of years. [Consolidated budget of the Russian Federation and budgets of state extra–budgetary funds, Information on the official website of the Federal Treasury - URL:https://roskazna.gov.ru/ispolnenie-byudzhetov/konsolidirovannyj-byudzhet/]. It should also be noted that the information base is insufficient in relation to data on the capital output of enterprises, the lack of data directly related to the introduction of BAT by enterprises, which, in fact, could characterize the effectiveness of the application of fiscal environmental payments in Russia, the involvement of businesses in ESG processes through them.

Thus, the main research methods are comparison, the general scientific dialectical method, the logical method, the system-structural method, which, in synergy with private scientific methods and formal legal analysis, allow for a basic study of the problem.

An evolutionary view of the composition of environmental payments in Russia

The Russian system of environmental payments has been formed since 1990, which is largely due to the transition to a market economy model. In the period 1992-2001, environmental payments had a fiscal and regulatory orientation, partly going to trust funds (environmental fund, fund for the reproduction of mineral resources, fund for the restoration and protection of water bodies, fund for the management, study, conservation and reproduction of aquatic biological resources). However, since 2000, all these funds have been disbanded.

At the moment, the institutional structure of fiscal instruments does not include targeted extra-budgetary funds and is based on the distribution of income between the budget levels of the budgetary system, i.e. the tendency to centralize income management prevails. There are payments with the status of a system-codified instrument administered by the Federal Tax Service of Russia, as well as a number of uncodified fees, fiscal payments and parafiscalities.

There are no codified fiscal instruments for direct environmental purposes. The current land and water taxes, as well as the MET, are exclusively natural resource taxes with a predominant fiscal function. The design of the water tax does not actually form indirect prerequisites and incentives for careful management of water resources, and the MET does not stimulate the reduction of harmful effects, but includes elements aimed at creating a convenient environment for the development of new deposits.

The codified indirect fiscal instruments of environmental policy include excise taxes on fuel and vehicles, transport tax, fees for the right to use objects of wildlife and aquatic biological resources. These tools have a greater or lesser effect on reducing the amount of resources consumed, as well as the intensity of their use. Accordingly, they may not give an obvious, but still an incentive to careful environmental management.

So, in 1998, the excise tax on gasoline in Russia began to take into account the peculiarities of the octane number, thus obtaining a relationship with the "carbon price". By 2011, this principle became even more clearly visible in the design of domestic excise taxes – rates were linked to international quality classes of gasoline and diesel fuel. The environmental aspect is partially taken into account in the transport tax. At the same time, the environmental class of vehicles can affect the design of the tax only by decision of the regions (paragraph 3 of Article 361 of the Tax Code of the Russian Federation).

Fiscal instruments of a direct environmental orientation are concentrated in the hands of local administrators and are overwhelmingly represented by departmental fiscal payments or even parafiscalities, the right to collect which can be transferred to contracting organizations when they perform works or services in the field of ecology. The modern system of environmental instruments in Russia is illustrated in the figure.

Source: compiled from materials ^[2]

Figure - The structure of the system of fiscal environmental instruments in Russia

The experience of developing countries is largely visible in the domestic system of explicitly environmental fiscal instruments. Thus, the Law "On Environmental Protection" adopted in 1991, although it affirmed the principle of "the polluter pays", was nevertheless formulated in many ways quite "mildly", bearing in mind the preservation of the competitiveness of the national producer in difficult economic conditions.

The current payment for environmental pollution, established by No. 7-FZ "On Environmental Protection" dated January 10, 2002, also differs little in its design from similar instruments in the group of developing countries. At the same time, in Russian practice, fees are charged for regulatory and above-standard emissions of pollutants into the atmosphere; discharges of pollutants into surface and groundwater, pollution of subsoil, soils; waste disposal. This is a fairly standard set of measures for developing countries to counteract polluting activity, however, it differs in detail in relation to various emissions, while in most countries only the "carbon" or "nitrogen" footprint is taken into account.

Since 2022, a combined approach has been introduced into the domestic system, involving the declaration of the "target" function of payment for environmental pollution without creating separate trust funds outside the budgets of the budgetary system, i.e., in fact, without a strict obligation to use the proceeds from this instrument only for environmental purposes [Russian Federation. Laws. On Environmental protection : Federal Law (art. 16.6 9. ) [adopted by the State Duma on January 10, 2002]. – SPS Consultant Plus. – URL: http://www.consultant.ru/document/cons_doc_LAW_34823].

The similarity of the problems of domestic experience with the problems of a group of developing countries is largely due to the use of the Recommendations of the OECD Council C/90164. Like most developing countries, Russia applies an approach to influencing "pollutants" not through the corrective effects of fiscal instruments, but through "exceptions", benefits and incentives for enterprises implementing new technological processes.

Domestic experience also suggests active "exclusions" from payers of enterprises implementing "the best available technologies" (hereinafter - BAT). The effectiveness of this measure remains debatable, but this approach makes it possible to maintain the competitiveness of enterprises as opposed to a short-term environmental perspective.

In Russia, since 2014, an "environmental fee" has been in effect, which must be paid by manufacturers and importers of goods in order to dispose of these goods after they lose their consumer properties (article 24.5 Federal Law No. 458 "On Production and Consumption waste"). In many ways, this measure is forced, since the problems of recycling goods and their compliance with international environmental standards are being pursued by all developing countries.

A "recycling fee" has also been introduced – a special tool in the field of ecology, which is designed to compensate for the complexity of the disposal itself, its cost and the environmental damage that it causes. In particular, the vehicle [Resolution of January 22, 2016 in case no. A53-3242/2015. – URL: http://sudact.ru/arbitral/doc/OLy7YcfL5XNw /]. The aim is to ensure environmental safety, including the protection of human health and the environment from the harmful effects of vehicle operation, taking into account their technical characteristics and wear. It is paid for each wheeled vehicle (chassis), each self-propelled vehicle, each trailer to them (hereinafter referred to as the vehicle) imported into the Russian Federation or manufactured in the Russian Federation.

The recycling fee is in many ways a tool for ensuring "reasonable protectionism" within the framework of the World Trade Organization (hereinafter referred to as the WTO) rather than being a truly environmental tool, which has caused a long series of disputes with other WTO members. The main claim was the presence of a significant difference in the amount of the fee for new and used cars and differences in the amount of the fee depending on the engine volume. The position of the WTO members is based on the fact that the differentiation of rates depending on the engine volume is a tool for protecting domestic manufacturers, prohibited by Article 3.2 of the GATT, since Russia produces a significant amount of equipment with a relatively small engine volume. Imported samples, as a rule, have a large engine capacity and, accordingly, their import becomes more expensive due to the high collection rate ^{[3] [4]}. Thus, first of all, the role is played not by the ecological class of the car, but only by the engine volume, which is somewhat controversial from the point of view of greening transport.

In Russia, there are also a number of indirect fiscal instruments related to forest plantations (forest rent and payment under forest purchase and sale agreements under the Forest Code). By their design, they are very far from matching the concept of a corrective tool. The available tools are practically insignificant even in terms of their fiscal function and cover only a number of administrative tasks.

The environmental aspect in the case of payment under the contract of sale of forest plantations is that the initial price of harvested wood is determined as the product of the minimum amount of payment under the contract of sale of forest plantations and the coefficient established by the state authorities of the subjects of the Russian Federation to determine the costs of ensuring the implementation of measures for the protection, protection, reproduction of forests.

It is also difficult to attribute rental payments to environmental parafiscalities, since by its nature rent is not a separate compensatory environmental payment and has a private legal character. Payment for the use of the forest fund is in fact a tool to encourage tenants to make rational use of the forest fund.

Of the above list of payments, only the environmental fee at seaports can be classified as environmental parafiscalities. It is charged on the basis of an internal decree, not federal legislation. The payment rates are determined by the branches of FSUE Rosmorport independently, but at the same time, as practice shows, they can also be determined by organizations that the branches of FSUE Rosmorport entrust with cleaning the water area. The payment is compensatory in nature and is intended to generate funds for environmental measures at the port.

All the described problems of fiscal instruments are also accompanied by their low profitability. The Ministry of Ecology and Natural Resources of the Russian Federation estimates environmental damage from economic activities at 250 billion rubles annually, while revenues from fiscal instruments amount to about two billion rubles [Ministry of Natural Resources and Ecology of the Russian Federation - URL: https://www.mnr.gov.ru/about /.].

Payments exist almost nominally and are not actually able to cover the volume of state programs for environmental protection, nor to compensate for the real environmental damage caused by the enterprise. This situation is a consequence of protectionism and is largely justified at the current stage of the country's development. When comparing the volume of revenues from fiscal instruments of environmental protection in Russia and abroad, it should be concluded that Russia belongs to the group of developing countries in terms of the use of fiscal instruments of environmental protection.

Considering statistics on socio-ecological instruments, it is also possible to analyze revenues from fees for the use of wildlife and for the use of aquatic biological resources, as well as fees for the use of forests, since these tools directly affect the reduction of the volume of resources consumed, the intensity of their use, and are also aimed at stimulating careful environmental management. The ratio of all fiscal instruments of environmental protection to the country's GDP in Russia has averaged 0.48% over the past 6 years, while a similar indicator in the EU is 2.4% [Statistical Service of the European Union. – URL: http://ec.europa.eu/eurostat/data/database].

Environmental payments in the aspect of the ECG agenda: business response

The domestic experience of working with fiscal ESG (ECG) incentives generally fits quite organically into examples of similar processes in developing countries. It is possible to note the trend towards protecting the competitiveness of a national producer "at the expense" of stimulating environmentally oriented activities. At the same time, there are elements of the forced adoption of a number of instruments under the influence of international standards, as well as the predominance of instruments with a pronounced fiscal effect and a limited target component, in the current circumstances, such an option for the formation of fiscal incentives within the ESG (ECG) agenda looks moderately appropriate due to some features of the economy and the need to maintain the competitiveness of domestic producers. The future of fiscal incentives for greening will focus on strengthening the role of targeted payments.

There is a great attention of domestic researchers to the problem of ESG (ECG) business transition. This is evidenced by scientometric indicators – only on eLibrary.The share of publications on the phenomenon under study reaches from 13% in the area of "finance", up to 28% in the area of "investments", up to 30% in the area of "risks". Much attention was paid to the study of methods for achieving the SDGs ^[5],[6],[7].

It should be noted the great progress of individual companies such as PJSC Rusal, PJSC Gazprom, PJSC Mining and Metallurgical Company Norilsk Nickel, Rosatom state Corporation. For example, PJSC Rusal in the "New Strategy and Goals for Sustainable Development of RUSAL for 2022-2030" sets out its vision of achieving the SDGs and ESG processes in Russia. The analysis of various approaches and techniques in companies provides an opportunity to propose some procedures within the framework of domestic ESG practice.

The framework programs highlighted by domestic researchers do not contradict the concept of integrating intensive fiscal incentive instruments into the state economic mechanism of environmental protection. Prior to the change in the geopolitical situation, domestic companies demonstrated their readiness to adopt the EU cross-border carbon tax (TUN) ^[8].

If the adoption of the EU TUN as a given and the updating of the ESG agenda contributed to the development of the idea of attracting new technologies and reducing harmful effects within corporations themselves, then business structures could demonstrate a similar willingness in isolation from external requirements, focusing on balanced growth of environmentally oriented BAT within the framework of the requirements of the domestic regulator ^[9].

Bearing in mind that corporations have duly shown their willingness to comply with increased standards and new fiscal obligations, it is correct to assume that the domestic incentive system still does not fully cover the permissible amount of emissions of harmful substances and has some risks of under-regulation of certain environmental aspects. In many ways, such a conclusion can be drawn by characterizing the EU TUN system as including not only one energy supplier company, but also the entire value chain, i.e. related suppliers and consumers in the logistics link.

PJSC RUSAL is already monitoring and controlling most of the harmful substances, the nomenclature of which exceeds the concept of "greenhouse gases" (sulfurous, nitrogenous and other compounds, industrial). Gazprom PJSC and Rosatom Corporation have also made quite deep progress in accounting for their own emissions, reflecting some of them on their website online. The companies follow the international standards of the Aluminum Stewardship Initiative (ASI).

Thus, social responsibility and adaptation projects of domestic companies do not contradict the leading role of the state in the formation of an environmental strategy, the principles of ECG/ESG. Using the example of the EU TUN, it was fiscal incentives, although of foreign origin, that ultimately stimulated an increase in the environmental responsibility of firms, internal organizational activities to build an adaptive ECG/ESG strategy ^[10],[11].

Prior to the change in the geopolitical situation, the fiscal incentives for the development of the ECG agenda were also not critically unacceptable for business. Many companies had a margin of safety and demonstrated their willingness to create a package of actions to comply with the requirements of the EU TUN, which undoubtedly suggests that an increase in the load of domestic tools will not have a disastrous effect on the plans for economic growth of production ^{[12],[13],[14],[15]}.

According to the available reporting data, the emissions of domestic exporters of energy resources and products with a "high carbon footprint", including the steel industry, are at parity with international competitors, including those operating in the EU. However, with the caveat that the emission data in various international sources (Edgar, IEA) differ and it is quite difficult to verify them under the condition of traditional protectionism on the part of developed countries and the EU ^{[16],[17],[18]}.

International standardization allows data collection according to non-harmonized standards and protocols. In particular, it is necessary to note serious discrepancies in foreign sources on methane, the greenhouse effect of which can be 28 times higher than the effect of carbon dioxide ^[19].

If the preliminary estimates were correct, then many domestic exporters of the metallurgical, mining and fuel and energy industries have a significant margin of safety before the EU TUN and any similar payments, being in a safer state relative to enterprises from less developed countries. Their EBITDA, free cash flow and moderate debt burden indicated a relatively small impact of the EU TUN.

At the same time, it was the EU TUN that essentially spurred the development of ESG regulation in Russia. In fact, at the same time as the announcement of the EU TUN, such documents were prepared in Russia as: a draft strategy for low-carbon development, bills on the turnover of carbon units, projects of environmental taxonomy and principles of environmental finance, various projects of new payments based on the principle of "carbon tax". In 2021, the Central Bank of Russia published recommendations on the introduction of ESG for market participants, including standards for issuing environmental bonds, taking into account environmental risks in the insurance sector ^[12].

At the same time, domestic proposals regarding ESG self-regulation or additional requirements for "polluter" firms contain a larger amount of benefits and are generally less demanding compared to the EU, which, however, fits into the concept of environmental regulation of a developing state. An example of the difference between the domestic and foreign approaches regarding ecological taxonomy can be given. The Russian project includes the transition from coal to gas and the use of gas as fuel for engines. The entire strategy is focused on reducing emissions by increasing the overall efficiency of energy use with relatively little involvement of renewable energy technologies. Similar EU projects are based on the rejection of gas as an environmentally friendly fuel, although with concessions for national producers.

It should be noted that fuel exporters interact with foreign investors much more often than other economic agents and the pressure of international environmental regulations and cross-border carbon taxation systems is not a risky trend for them. The development of ESG programs under the influence of fiscal incentives should be recognized as a fairly predictable process that has been going on for several years. Exporting firms, going ahead of the ESG agenda, nevertheless quite organically accepted fiscal incentives, which speaks in favor of the priority hypothesis regarding the fiscal effect of influence on the development of ESG.

Moreover, a significant part of large domestic firms included in the S&P Global Ratings have been publishing their indicators within the framework of the SDGs for several years, and have also joined the international standards for environmental disclosure CDP – these are PJSC Gazprom, PJSC Lukoil, PJSC Mining and Metallurgical Company Norilsk Nickel, MTS PJSC, Rosseti Group, as well as to the "Guidelines for Reducing Methane Emissions" - PJSC Novatek, PJSC Gazprom, PJSC NK Rosneft.

It should be noted that in addition to the obvious risks for developing countries, the EU has opened up a number of new opportunities, stimulating development:

- renewable energy (RES). In particular, the stimulation of the renewable energy DPM – the program for the development of renewable energy generation in the UES of Russia due to the guaranteed payment of power for a certain time under the power supply agreement (DPM) to the wholesale market concluded with the owner of the power plant. The program provides for a competitive selection of investment projects for the construction of generating facilities operating on the basis of renewable energy sources. Thus, if the fiscal costs of harmful emissions, in this case "carbon", are sufficiently significant, then the economic attractiveness and additional fiscal preferences for renewable energy projects will be obvious, which will have a positive impact on employment and new jobs, including in the regions where firms operate;

- technologies for the collection, storage and utilization (processing) of carbon dioxide;

- production of environmentally friendly goods and procedures, if the introduction of such production will be preferential within the framework of the environmental fiscal component, provided that the "price of polluting behavior" will be sufficiently significant for the manufacturer and consumer;

- work with hydrogen raw materials, including those obtained with the help of renewable energy sources, Peaceful Atom, and natural gas. The export of methane-hydrogen mixtures is possible, but requires increased attention to the condition of pipeline networks. In particular, before the recent changes in the geopolitical situation, Rusnano and Enel were working on a strategy for exporting hydrogen produced at the Kola NPP. In addition, Rosatom and Russian Railways announced a hydrogen-fueled train project, Novatek and NLMK declared cooperation in the use of hydrogen to reduce environmental damage in steel production;

- forestry and forest technologies. The growth of forests in Russia is largely limited by climatic and geological features, and the forests themselves absorb slightly less carbon dioxide than in warmer regions, there is an increase in effective forest management, in particular, the expansion of corporate forest fire control, increased research towards alternative concepts for the production of environmentally friendly products from forestry products, environmental functions forest plantations.

The potential of the Russian energy system is based on the fact that a significant part of electricity generation can be relatively environmentally friendly sources of renewable energy and, according to the European classification, is "low carbon". Sufficiently clean nuclear and hydro generation provide up to 40% of electricity generation in Russia. Nevertheless, back in 2020, the EU TUN provoked a boom in the development of proposals in the field of "carbon certificates", which can cover renewable energy, nuclear energy and hydroelectric power plants.

The impact of the fiscal stimulus has also increased the interest of companies in responsible contracts with suppliers of environmentally friendly energy. In particular, we can give an example of a contract between Rushydro and Polyus, which allows closing up to 90% of Polyus' production facilities. A similar example is observed in Rusal entities that buy energy from hydroelectric power plants for energy-intensive production. However, as for the ESG policy of large-scale industries founded back in Soviet times, there are doubts about the novelty of such a step, because complexes of steel enterprises were built simultaneously with energy generation facilities.

The existing projects of the European ecological taxonomy do not include either peaceful atom or hydrogenation, although they imply fiscal exceptions in practice, a long conditionally "transition period". And, as can be observed, it is a more speculative design than domestic projects. In particular, it can be said that energy with a high risk to the environment forms the basis of the industrial independence of most European countries, and the inclusion or non-inclusion of a green taxonomy in the project does not affect the methodology for calculating carbon taxes and other environmental charges.

The fundamental problem is the fact that in practice no "green certificates" (including in the EU) have been able by themselves to reduce the "carbon footprint", but only create the appearance of redistribution between the domestic and foreign energy markets. At the same time, the EU TUN concept has spurred producers outside the EU to find ways to greenize their production, although the availability of "green certificates" is inherently much cheaper than investments in equity aimed at greening.

It should be noted that the so-called "sustainable" finances, which include bonds, are under quite difficult pressure from ESG initiatives. On the one hand, large asset management companies require changes in environmental behavior, on the other hand, they provide for extensive exceptions, including due to the policies of national governments of various countries.

A relatively positive example is the strategy of BlackRock (more than $8.7 under management, including more than $5 trillion in passive funds). The annual message to investors has been warning investors for several years about the possibility of withdrawing from discretionary portfolios of securities of companies that do not fight for the greening of production or do not disclose significant ESG information ^[12].

By 2021, more than 3,500 organizations have signed the Principles of Sustainable Investment, and more than 200 banks have ratified the Principles of Sustainable Banking. The trend is still relevant and the number of companies is gradually increasing.

According to Rosatom estimates, the maximum amount of credit to one borrower that the domestic banking system can issue without violating regulations was up to 2.6 trillion rubles in 2020, while Gazprom's consolidated debt reflected in IFRS at the end of the 3rd quarter of 2020 was 4.9 trillion rubles.

Some Russian banks, prior to the emergence of geopolitical crisis circumstances, felt increasing ESG pressure from investors and counterparties. In particular, Sberbank's development strategy until 2023 contained a point for planning the environmental assessment (ESG) of all new corporate loans, as well as a plan for corporate procurement in full compliance with the environmental strategy.

In addition to the well-known activities of individual companies in the domestic market, it is necessary to assess the overall results of enterprises' involvement in ESG trends in the context of fiscal regulation of environmental externalities. At this stage, the study is hampered by an insufficient amount of representative data. Despite the fact that some large companies publish ESG reports, these reports often do not clearly correlate with the impact of public fiscal obligations, moreover, it is difficult to assess the main goal of environmental policy - the introduction of BAT. As a result, there is currently no comprehensive, full-fledged picture of the potential inherent in environmental fiscal payments, and researchers can only form a number of prerequisites for a hypothesis about the effectiveness of existing tools based on fragmentary or indirect data.

The main interest for the analysis may be several indicators: the amount of income in the context of payments for negative environmental impact, data on gross value added, fixed assets and investments in fixed assets in relation to industrial enterprises.

The ratio of these data forms a number of indicators of capital return and attraction of investments in fixed assets in connection with the impact of fees for negative environmental impact. Thus, a prerequisite arises for the formation of a basic hypothesis about the effectiveness of applied fiscal environmental measures on an economic scale.

Based on the assumption that public revenues in the form of payments for negative environmental impacts should decrease across the state as BAT is introduced, it can be assumed that in parallel with the reduction in income from this type of fiscal payments, the indicator of gross value added, investments and the volume of fixed capital of enterprises will grow. This assumption is supported by the provisions of the Law on Environmental Protection, which provide for the use of additional incentive coefficients aimed at carrying out measures to reduce harmful effects, including the introduction of BAT (Table 1).

In order to encourage legal entities and individual entrepreneurs to take measures to reduce the negative impact on the environment and introduce BAT, additional coefficients are applied to the rates when calculating fees for NWOS (clause 5 of Article 16.3 of the Law on Environmental Protection).

Table 1

The main incentive coefficients for the rates of payment for NWOS in relation to emissions and waste

In addition, there is a separate list of stimulating coefficients (Table. 2) it is provided for rates in relation to waste disposal (clause 6 of Article 16.3 of the Law on Environmental Protection).

Table 2

Additional incentive coefficients to the rates of payment for non-hazardous waste in relation to waste disposal

When calculating fees for NWOS, for discharges of pollutants by organizations operating centralized wastewater disposal systems of settlements or urban districts, when discharging pollutants that are not related to substances for which technological indicators of BAT are established, a coefficient of 0.5 is applied in addition to other coefficients, except for the period of implementation by organizations of programs to improve environmental efficiency, action plans for the protection of the environment. For the period of implementation of such programs, when calculating the fee for NWOS (with the exception of the mass of pollutants discharged within the technological standards), coefficient 1 is applied instead of the corresponding coefficients (clause 6.1 of Article 16.3 of the Law on Environmental Protection).

According to the results of the year, the company can adjust the fee for the cost of implementing measures to reduce the negative impact on the environment (paragraphs 10, 11 of Article 16.3 of the Law on Environmental Protection). If, as a result of the calculation, the total amount of the fee for non-hazardous waste is negative, it means that the company has an overpayment that can be refunded or offset against future payments for non-hazardous waste (clause 2 of Article 16.5 of the Law on Environmental Protection).

Thus, we can talk about a fairly large amount of reduction in fees for NWOS, provided that BAT is actively implemented or other measures are taken to change the technological processes of energy consumption, production, and waste disposal directly at the places where they occur.

Indeed, the data presented in table 3 indicate a reduction in fees for NWOS over a number of years, but a significant problem is the growth in the amount of waste generated, as well as a reduction in indicators associated with the growth of fixed capital. You can also pay attention to the ratio of indicators – a painful signal is a situation in which investments and fixed assets grow faster than gross value added.

Table 3.

Data on the main indicators influencing the assessment of the effectiveness of business involvement in ESG through fiscal instruments

. 2023: Stat. sat. /Rosstat. –M. , 2023. – 259 c; Consolidated budget of the Russian Federation and budgets of state extra-budgetary funds, Information from the official website of the Federal Treasury – URL:https://roskazna. gov. ru/ispolnenie-byudzhetov/konsolidirovannyj-byudzhet/

A conclusion is possible regarding a situation in which the effectiveness of fiscal policy may be questioned. For example, in 2018, with a clear decrease in the receipt of fees for NWOS, the volume of investments increased slightly compared to last year's figure with an increase in the amount of waste generated. In the future, the amount of waste also did not decrease, but steadily increased. This process was accompanied by an increase in fixed capital gains with a slight increase in investments, while in 2020 the gross value added underwent a significant decrease altogether.

Based on the totality of the signs, we can talk about the risks of inefficiency in involving industrial enterprises in the ESG process and form the basis for the hypothesis of a minor impact of fees for negative environmental impacts as a factor in stimulating the introduction of BAT.

At the same time, for an econometric assessment of this assumption, a larger number of data is needed than is currently available to researchers, since for a simple regression, the number of observations should be 7 times higher than the number of exogenous factors.

Conclusions and further directions of research

Despite the obvious motivations that come from fiscal environmental incentives, including those of the EU, obvious difficulties can also be observed:

- Inconsistency of reporting and regulation between different environmental fiscal jurisdictions;

- the risks of "energy transition", when the domestic fuel and energy complex provides about 20% of GDP, accounts for up to 60% of commodity exports.

Russian exports are characterized by lower added value compared to Chinese, therefore they are more sensitive, as in other developing countries, to the introduction of any external barrier payments.

Given that foreign investments were leaving faster than the domestic economy managed to be greened (investments began to fall by 30% in 2020, according to IEA estimates), national companies with large reserves, relatively low costs and relatively little pressure from ESG investors and regulators are now in the best position. They can remain profitable even in a falling market.

In the long term, companies are faced with the issue of redistributing declining rents from fossil fuel extraction between the government, infrastructure companies and major industries.

At the same time, it is necessary to note the general level of expectations of the business community, where, with regard to greening and the ESG agenda as a whole, an approach is observed that is largely similar to foreign experience - entrepreneurs seek to use the principles of ESG to improve business conditions and generally reduce official requirements for the type of activity, which to some extent raises the question of the compatibility of ESG in the current paradigm and fiscal measures aimed at correcting externalities.