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04 August 2020

Lake and mountains

PAGE and GIZ Join Efforts to Design Economic Support Measures for Economic Growth and a Resilient and Cleaner Economy in Kazakhstan 

COVID-19 has demonstrated the danger in underestimating systemic global risks. One such risk is climate change and its effects are accelerating. Increasing heat-trapping greenhouse gases into the atmosphere is resulting in not only rising average temperatures but also extreme weather events, changes in precipitation patterns and reductions in water availability, shifting vegetation zones and habitats with huge economy undermining potential. 

Lake and mountains

Green policies for modernising the Kazakh economy 

The decarbonization and improved energy efficiency of the economy, is at the core of the Kazakhstan’s Concept of transition to a Green Economy, adopted in 2013, and considered to be one of the most ambitious greening concepts in Europe and the Central Asian region. The Green Economy Concept was complemented with ambitious targets set in the National Development Strategy Kazakhstan 2025. Essential elements of the Green Economy Strategy are New Environmental Code is to provide practical instruments and regulatory framework to proceed with «greener» development. Since the adoption of the Green Economy Concept Kazakhstan has adopted international commitments under the Paris Agreement and the 2030 Agenda for Sustainable Development. Work on integrating sustainable development goals and targets to align national policies with international commitments is ongoing. 

Despite policy advancement, at the time of the pandemic, Kazakhstan remains largely depended on exploitation of fossil fuels and the export of hydrocarbons. Country still belongs to the biggest emitters of greenhouse gases (ranked 11 in 2018 in terms of emissions per capita) and to the most energy intensive economies in the world (ranked 5 in 2019 in terms of total energy consumption per unit of GDP), ranking 11 in 2019 with respect to the value of domestic fossil-fuel consumption subsidies. This highlights the need for continuous and comprehensive efforts to diversify the economy and increase the share of its non-oil GDP. 

Joining efforts: the German government and the UN 

Doubling efforts to support Kazakhstan in addressing these challenges, the Government of Germany has joined hands with PAGE, to set in place several low-carbon and green economy policy initiatives which would provide new impetus for Kazakhstan’s green transition. 

  • The Low Emission Development Strategy 2050 

The German Development Cooperation (GIZ) is supporting the Republic of Kazakhstan is developing a National Strategy for Low Carbon Economic Development until 2050 (LEDS). The LEDS will be based on the modelling of several scenarios and development pathways in 9 sectors until 2050. It incorporates social, environmental, and economic. The focus is on the inter and intra-sectoral physical transformations required to meet long-term emissions and socio-economic goals, taking into account evolutions in technologies and business models. 

The LEDS strategy is developed in collaboration with PAGE, specifically in the chapters on waste management and circularity and the effects of fiscal policies, including fossil fuel subsidies. 

  • A green recovery from the double crisis 

The severe economic crisis caused by the COVID-19 pandemic and the steep decline in revenues from fossil fuel export is prompting the Kazakh government to enact economic support measures to boost economic growth, create jobs and to make hard choices to build a more resilient and cleaner economy. The Government of Kazakhstan has to reconsider and update the mid-term economic planning in view of the changed economic outlook. 

COVID-19 Socioeconomic Response Group led by UNDP and is collaborating with PAGE to ensure that the updated version of the mid-term economic plan of Kazakhstan – the Strategic development plan until 2025 strategy – puts sustainability at the heart of the country’s economic recovery based on such key principles as: 

  • decarbonization of the economy with the development of green finance instruments. 
  • introduction of the best and carbon-neutral energy-efficient technologies for sustainable production and consumption through the targeted stimulus. 
  • responsibility for the use of resources and preservation of natural heritage and increased efficiency of environmental control and monitoring. 
  • development of non-fossil alternative energy sources and an increase in the reliability and efficiency of the transmission network 
  • ensuring the investment attractiveness of measures for the efficient use of resources, providing for a fair price formation system on the resources market, combined with fiscal reform. 
  • implementation of primarily cost-effective measures, prioritizing economically viable initiatives with environmental impact and/or providing for the decrease of energy consumption. 
  • eco-education and development of ecological culture with focus on the adjustment and development of a new curriculum and a systemic approach to public awareness raising. 
  • diversification of the economy through the development of rural areas, modernization of rural infrastructure and involvement of youth in agri-business and rural development. 
  • improved waste management based on economically feasible recycling technologies, management of waste flows, reduction in supply and demand for raw materials. 
  • innovation in critical technology areas: hydrogen and carbon capture, utilization and storage need support with focus on innovations in clean energy technologies. 
  • New Environmental Code support 

Best available techniques (BAT) is one of the key pillars of new Environmental Code of Kazakhstan is which will prevent and control industrial pollution. However, implementing BAT requires a dedicated legal framework. GIZ and PAGE UN agencies are supporting the transformation of the industry sector by elaborating a legal and regulatory frameworks for Integrated Environmental Permitting (IEP) based on Best Available Techniques (BAT), contributing to climate change mitigation, improved air quality, reduced water consumption and pollution. 

Unlocking green finance 

The transition requires the mobilization of investments for the decarbonization of priority sectors and advance resilience. UNDP Kazakhstan, has developed innovative solutions that facilitate access to finance, leveraging both public and private resources, and effectively address the risk-concerns of private sector investors. The government of Germany as one of the donor countries that supported UNDP initiative on biodiversity and ecosystem conservation financing within the global Biodiversity Finance Initiative (BIOFIN).  In Kazakhstan it resulted in development of new financial mechanisms. The piloting, for example, of carbon offset mechanisms, allowed to leverage private investments of the biggest blockchain companies in the world (register unaccounted forests and plant additional forests, with a plan to scale up globally). As a result, for the first time in Kazakhstan, a privately-owned company invested in an environmental project to balance out their carbon footprint. 

There are many other examples of private sector companies introducing financial mechanism for attracting investment into low carbon projects (through PPP, ESCO agreements). They have already brought USD 46 million of investments for green projects with the potential to reduce more than 1 million lifetime CO2 emissions. 

Green economy requires not just investments and laws, It is also about new partnerships and opportunities. «Greened» recovery responses with well-directed public spending and investments in the green transition will provide not only for addressing the consequences of the current crisis but also build resilience to future economic shocks and accelerate transition towards the achievement of inclusive sustainable development. 

PAGE is committed to work with all partners at all levels in Kazakhstan, to help support its inclusive Green Economic transformation as fast as possible. 

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