| Case study and other research evidence, along with prior studies and literature, demonstrate that there are huge technical-economic opportunities for cost-effective energy-efficiency investments in the industrial, residential, and heating sectors in Russia, and that renewable energy sources, especially wind, solar, and biomass, can play a significant and cost-effective role in energy supply in some geographic regions. The evidence also shows that technological capabilities of Russians to exploit these technical-economic potentials are strong, but that market-related capabilities are still weak.;Market-level energy prices, privatization, and greater institutional efficiency, all traditional policy prescriptions for developing countries and countries in transition, are insufficient conditions for exploitation of these technical-economic opportunities. The evidence illustrates that many transaction barriers severely limit economic activities, including technology transfer, that would result in greater energy efficiency and renewable energy supplies. Lack of developed capital markets and long-term capital is a commonly cited problem for Russia. But even with greater capital availability, uncertainty and lack of information in different forms represent formidable transaction barriers. Other barriers relate to missing institutional mechanisms; missing or mismatched incentives; weak legal and market institutions; cultural factors; and a lack of experience and training in economic management, finance, law, and marketing.;Existing literatures on energy efficiency, renewable energy, international technology transfer, multilateral development lending, and environment-motivated technology-transfer are analyzed for their relevance to post-Soviet Russia. In Russia, energy efficiency and renewable energy investments and technology transfers reflect a complex combination of elements from developed country, developing country, and Soviet Union perspectives within these literatures. This combination is evident in patterns of energy consumption, technology and sectoral potentials, indigenous technological capabilities, transaction barriers, institutional arrangements and constraints, propensities to transfer technology and modes selected, development policies and approaches, and capacity building.;Transaction barriers underscore the importance of market intermediation and joint ventures. Market intermediation provides the knowledge, information, skills, market services, financing, and analysis necessary to overcome transaction barriers. Joint ventures with foreign multinational corporations represent another means for overcoming transaction barriers, one that also takes advantage of Russian technological capabilities. |
