ETS Integration in Kazakhstan: Lesson-learned guideline for Central Asian countries

• Florence School of Transnational Governance

The STG Talks, held weekly at Badia Fiesolana and online, serve as a space for discussion for the STG community and beyond. Led by the STG Fellows, the talks are a place for informal learning and exchange on global issues affecting different areas of policymaking.

One of the key policy interventions to reduce greenhouse gas (GHG emissions) is by setting a price on those emissions: a carbon price either directly through a carbon tax or by capping the quantity through a cap-and-trade system such as an emissions trading system (ETS). This policy intervention increases the cost of emitting greenhouse gases, dealing with the root cause of climate change and provides incentives to reconsider investment, development, and consumption habits for businesses and individuals.

Central Asian countries are highly vulnerable to climate change and heavily reliant on fossil fuel resources. All countries need to decarbonise their economies for sustainable growth and meet their Paris Agreement goals. Within this global challenge, there are significant opportunities for Central Asian countries for attracting green investment through the expansion of renewable energy, phasing out fossil fuel subsidies and improving energy efficiency.

This talk will be dedicated to the role of carbon pricing instrument and its impact on climate change and assess Emission Trading System, launched in Kazakhstan in 2013, the first country in Central Asia that implemented a nationwide cap-and-trading system (KazETS). Based on the analysis, it will provide lessons learned and experiences that will support Tajikistan in planning to introduce ETS, as the country is in a stage of consideration of ETS and/or green certificate. The KazETS experience will further help to understand how does the mechanism reflects the country if it is introduced and what are the obstacles that Tajikistan should consider before penetrating ETS into its system. Historically speaking, after the collapse of the Soviet Union the economy of Tajikistan suffered significant structure changes that are reflected in the country’s GHG emission profile. The share of the energy sector decreased substantially due to the abrupt reduction of fuel consummation in the industry, but remained the largest sector in terms of GHG emission in the national inventory of Tajikistan in the period from 1990 to 2016. Taking into account economic and environmental issues the last part of the talk will be focused on discussing the role of carbon pricing in the region and based on Kazakhstan’s case study with KazETS provide potential solutions and recommendations for reaching Tajikistan’s conditional and unconditional GHG emission reduction for 2030.

Speakers:

• Fazila Beknazarova, Policy Leader Fellow, STG
• Jos Delbeke, EIB Climate Chair, STG
• Elena Marro, Research Assistance, STG

This event will only be held in person.