Kazakhstan's Potential Establishment of a Carbon Trading Market
Revamped Version:
Remember that buddy, we're here to discuss the bold steps taken by President Kassym-Jomart Tokayev to combat climate change and drive sustainable development in Central Asia. The establishment of a UN Regional Center for the Sustainable Development Goals back in March 2022 is one such initiative, focusing on tackling pressing environmental, social, and economic issues, primarily within the Central Asian region.
The first hurdle to a sustainable future? Climate change. With annual floods, glacier melting, droughts, and forest fires becoming all-too-common, it's crucial we tackle this issue head-on.
Bakhyt Yessekina, the brilliant mind behind it all.
Let's dive into Kazakhstan's plan to achieve carbon neutrality. Approved in 2024 and the first of its kind in the region, the National Strategy for Achieving Carbon Neutrality has become a cornerstone of Kazakhstan's strategic planning system. However, achieving its key indicators under shifting geopolitical conditions requires careful strategy. Currently, the Ministry of National Economy is developing an implementation roadmap, taking into account the latest trends in the national energy sector.
The main challenge? Securing the necessary investments to decarbonize the economy. Estimates suggest that achieving carbon neutrality in Kazakhstan by 2060 will require a whopping $660 billion.
International carbon trading proves a promising avenue for attracting carbon investments. Countries like the U.S., Norway, Canada, and China have already shown this to be an effective solution, as demonstrated by their participation in greenhouse gas emissions trading.
For example, Singapore is actively developing a carbon credit market, with government regulations on emission reductions and corporate sustainability initiatives driving its growth. The EU Emissions Trading System, the world's largest carbon credit market, has been in operation since 2005, helping the EU meet its target of reducing greenhouse gas emissions by 40% by 2030 compared to 1990 levels.
India actively participates in the international carbon credit market by selling surplus credits to developed countries, promoting investment in emission reduction projects and sustainable energy development. Japan has introduced a pilot emissions trading system and unveiled a carbon unit market on the Tokyo Stock Exchange, known as J-Credits. And guess who's joined the party? Kazakhstan, officially part of Japan's Low-Carbon Development Committee in 2023.
Kazakhstan's emissions trading system, established in 2013, covers over 220 industrial facilities across six key economic sectors and emits over 20,000 tons of CO2 equivalent per year. However, due to free allocation of quotas, low carbon unit prices, and a limited scope of sectors covered, the system is not as effective as it could be. It's time for a major overhaul, aligning it with international standards.
Kazakhstan's substantial economic and infrastructure potential makes it a prime candidate for participating in international carbon trading. Key factors include high emission levels, vast renewable energy potential, opportunities in low-carbon fuel use, and carbon sequestration potential. By leveraging these factors, Kazakhstan could become a regional leader in carbon trading.
However, challenges remain. Kazakhstan's economy heavily relies on coal and oil exports, making the transition to a low-carbon economy difficult. The lack of knowledge, qualifications, and experts, limited legislative framework, and a lack of awareness and business incentives hinder Kazakhstan's full participation in carbon trading.
To overcome these challenges, the following tasks have been assigned to responsible state bodies:
- Development and expansion of the national ETS, integrating new sectors like agriculture, transport, and aviation, and extending Kazakhstan's experience to other Central Asian countries.
- Strengthening legislative regulation by introducing relevant amendments and developing national carbon unit certification standards.
- Developing green finance and attracting international investors by implementing wealth/inheritance taxes, diversifying energy sources, and reforming the Tax Code.
- Introducing decarbonization measures for the real sector into the draft roadmap for achieving carbon neutrality by 2060.
- Incorporating measures for introducing new academic programs in sustainability and climate awareness, as well as public awareness initiatives, into the draft roadmap for achieving carbon neutrality by 2060.
By addressing these challenges and embracing international carbon trading, Kazakhstan could transform its ETS from a symbolic framework into a driver of its 2060 carbon neutrality goal.
So, there you have it! The journey towards a sustainable future is far from easy, but with determined efforts and radical changes, we can make it happen. Stay tuned for more insights on this exciting journey!
- In Kazakhstan's plan to achieve carbon neutrality, minimal requirements in science, environmental-science, and finance are needed to incentivize investments in biofuels, a key aspect in decarbonizing the economy.
- The Climate-Change issue in Kazakhstan requires close attention, as the National Strategy for Achieving Carbon Neutrality, approved in 2024, aims to combat this problem while supporting sustainable development against the backdrop of shifting geopolitical conditions.
- Kazakhstan's substantial real-estate sector plays a vital role in their carbon-neutrality journey, as measures for the real sector are being incorporated into the draft roadmap for achieving carbon neutrality by 2060.
- To drive Kazakhstan's carbon trading system forward, international collaboration is crucial, with countries like Japan already offering opportunities for Kazakhstan to join committees, such as the Low-Carbon Development Committee (2023).
- Leveraging Kazakhstan's vast potential in carbon sequestration, low-carbon fuel use, and renewable energy, the government plans to invest in academic programs focused on sustainability and climate awareness to raise awareness and address the current lack of knowledge and expertise within the nation.
