Energy efficiency in Russia

Russia has enormous potential to increase its energy effi ciency. It suff ers from the lack of modern heating systemsin housing, outdated infrastructure and equipment in energy intensive industrial sectors, natural gasleaks from pipelines during transmission and distribution, and oil companies fl aring associated gas at theirwells. To address these problems, Russia should provide incentives to reduce fl aring, increase domestic pricesfor gas, breakup the Gazprom monopoly on the pipeline system, and improve the legal framework for internationalcooperation. Th e EU has only indirect levers on Russian domestic policy, so it should work to convinceRussia that reducing domestic demand serves both Russian and European interests, help Russia cashin on its effi ciency potential, and sponsor small-scale energy effi ciency projects that could encourage additionaleff orts at the grassroots level.