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Kazakhstan and Green Economy: a Paradigm Shift or an Attempt to Give Out Desirable for Valid?

«For a successful transition to “green economy “the contribution of all parties is required: the government, industry and population. In case of non-participation or lack of motivation to participate in the fulfillment of the transition to a “green economy” of at least one side, the probability of their implementation will rush to zero», – Yerlan Kasym, an energy policy specialist from Nur-Sultan, writes in his article for cabar.asia.

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A brief review of the article:

  • The Republic of Kazakhstan has done tremendous work and spent considerable funds for the organization of “Expo-2017” exhibition. However, the state of affairs on the introduction of new alternative “green” technologies today raises many questions;
  • Kazakhstan has set itself a number of specific and measurable objectives for the transition to a “green economy” with clear deadlines;
  • The transition to “green economy” requires the participation of all parties involved; without this, successful actualization of the Concept becomes less likely;
  • Kazakhstan is not yet ready for a full-scale transition to renewable energy sources. However, the country needs to be ready when global changes in the economy will require from Kazakhstan a maximum transition to alternative energy sources.

Almost two years have passed since the Expo-2017 exhibition was held in Astana, where, for the first time in Central Asian region, the latest engineering innovations in the field of renewable energy sources (RES), – the energy of the future, were presented to the world. At the end of the exhibition, the President of Kazakhstan, Nursultan Nazarbayev, stated that the legacy of Expo should be further used for innovative and sustainable development in the country, adopting the advanced experience of countries in the field of alternative renewable energy sources, demonstrated during the exhibition.[1] Obviously, the republic has done tremendous work and spent considerable funds to organize this event. However, what is the state of affairs regarding the introduction of new alternative “green” technologies today? Does Kazakhstan have the same opportunities that it had five years ago, to try to change the paradigm of economic prosperity and the transition to green development?

Possessing enormous resources of traditional sources of energy, Kazakhstan is not interested in abandoning them in favor of  modern “green” technologies, though less harmful to the health of the population. Photo: kazpravda.kz

Since the independence in 1991, the Republic of Kazakhstan has achieved significant economic development in terms of macroeconomic growth, market liberalization and the implementation of a number of major infrastructure projects. These achievements were made possible largely due to the favorable situation on world markets for the country’s main export products: oil, gas, as well as non-ferrous and ferrous metals, grain, gold, uranium, and so on. However, due to the sharp fall in prices for the main export items, from the end of 2014, Kazakhstan began to experience difficulties in maintaining the previous rates of economic growth. This period coincided with the adoption and beginning of the Concept implementation on the transition of Kazakhstan to “green economy” and the country found itself in a situation where it faced specific tasks on the transition to new standards of “green” development. At the same time, it became necessary to curb the economic downturn, while implementing the most important social and infrastructure projects that require traditional approaches and resources.

In addition, the infrastructure and enterprises engaged in the extraction and processing of raw materials were mainly built in the twentieth century and designed to consume energy from traditional sources: coal, diesel, natural gas, and so on. A large-scale modernization of industrial enterprises to generate or consume energy from alternative or energy-saving sources might require significant investments, which would undoubtedly affect the cost of production and the overall economic performance of enterprises.

Furthermore, Kazakhstan has not yet created an appropriate infrastructure for deep and efficient waste processing. Despite the fact that some large companies intend to increase the share of recycled waste, there is no ready infrastructure to meet the need for waste recycling in Kazakhstan. In addition, citizens’ identity also plays a big role, especially in the issue of separate garbage collection. Unfortunately, in Kazakhstan, there is still a lack of discipline among the population in the issue of garbage collection in general, especially in regions and small towns.

Regarding the reduction of emissions to the atmosphere, the country’s industrial enterprises are not able and not motivated to invest in technologies that allow improving the reliability of production in terms of emission reduction. The existing system of issuing permits and imposing fines for exaggerating emission limits provides for payment of fines to the republican, but not the local budget, in the territory of which the release of emission was made. Accordingly, local authorities are not mandated and are not interested in stricter control of industrial enterprises in their region.

To answer these questions, this article will first give a brief definition of the “green economy” concept, indicate the prerequisites for the adoption of the Concept, and also provide a brief overview of the tasks set in it and the course of their implementation. In addition, the main conclusions will be made about the real reasons for the adoption of the Concept and the existing difficulties in carrying out some of the tasks specified in it, given the serious dependence of the Kazakh economy on oil, gas and other natural resources that require a traditional approach in their development. Also, taking into account Kazakhstan’s realities, separate recommendations to improve the effectiveness of the “green economy” principles’ implementation will be given.

Defining “Green Economy”            

The global economy has arrived at the point when all countries need to reach a coordinated position on how they will develop their economies most sustainably with minimal environmental impact. It is not a secret to anyone that in the aftermath of human economic activity, the earth and the atmosphere are experiencing a colossal burden. Being part of the biosphere, it seems that humankind finally realized that it is impossible to carry out economic activities without affecting our planet.

There are several definitions of a green economy. In the concept of the transition of Kazakhstan to “green economy”, it is defined as an economy with a high life quality level of the population, careful and rational use of natural resources in the interests of present and future generations and in accordance with the country’s international environmental obligations.[2]

A slightly different definition of “green economy” is given by the UN Ecological Program, where it is described as a precondition for poverty reduction, realizing the features of healthy ecosystems. Also, the UN definition comes down to the fact that “green economy” is a low-carbon, resource-saving and socially inclusive model.[3]

Judging by the basic definitions of a “green economy,” the goal of transition to it, first of all, is minimizing the environmental impact of the economic activities of industrial and energy enterprises, while maintaining steady growth. That is, unlike the traditional economy, where, in general, the subjects face the task of obtaining added value without taking into account the potential impact on the environment and people, the “green economy” puts sustainable development, efficiency and improvement of populations’ well-being in compliance with the requirements of major international environmental agreements at the center.  

Goals and tasks of the Concept for the transition of Kazakhstan to a “green economy”

According to the Concept on transition of the Republic of Kazakhstan to “green economy”, approved by Presidential Decree No. 577 on May 30, 2013, the following prerequisites for its adoption are given:

  1. According to the Concept, there is an inefficient use of resources in all major sectors of Kazakhstan’s economy, which leads to lost profits of 4-8 billion US dollars per year, and by 2030 it can be up to 14 billion US dollars. At the same time, the potential for energy savings is 3-4 billion US dollars per year.[4] That means, the issues of inefficient use of resources and energy efficiency are the key elements to the adoption of the Concept. Indeed, until 2013, these issues were never raised or discussed at the governmental level. Therefore, the question of the cause of their occurrence in 2013 remains open. The adoption of the Concept implies amending the existing requirements and standards for the efficient use of resources, especially in the field of housing and utilities infrastructure.
  2. Tariff formation and pricing for energy resources have not changed significantly since independence and do not create incentives for technological improvement of the industry.[5] Industrial enterprises, which are the main consumers of energy, continue to pay for their use of the old formulas, without a motivation to upgrade their capacities to improve energy efficiency and rational use of resources. The concept is designed to establish requirements that encourage consumers to use resources most effectively.
  3. Currently, a problem of a serious deterioration of the natural resources and the environmental conditions for the most important ecological indicators in Kazakhstan is observed. Almost a third of agricultural land is now degraded or is under serious threat, and more than 10 million hectares of potentially arable land in the past have been abandoned.[6] The difficult 1990s and the subsequent sharp economic growth left their negative imprint on the environment. It is obvious that environmental safety issues remain the most relevant for the Government and the population of Kazakhstan; therefore the Concept reflects specific measures necessary to restore the state of natural resources and the environment.
  4. As we know, today the economy of Kazakhstan is seriously dependent on the export of raw materials and therefore is largely subject to the influence of external sharp fluctuations in the prices of commodity markets. In addition, there is a high uncertainty in the price situation on the global hydrocarbon markets. For this reason, the issue of transition to renewable energy becomes relevant. The Concept clearly indicates the measures, targets and deadlines for achieving the share of energy obtained from renewable sources that must be achieved to ensure the energy and economic security of the country.
  5. Due to the peculiarities of the natural wealth of different regions, Kazakhstan has developed territorial heterogeneity in economic indicators, living standards and environmental conditions. The development of new industries and “green clusters” will reduce inequalities in the development of regions and use their potential in renewable energy, agriculture, water management, waste management and other sectors.[7] According to the Concept, the transition to “green” rails will allow individual of less developed regions to use their potential to improve economic performance and the well-being of the population by encouraging the implementation of new, environmentally friendly industries. World experience has shown that the “green economy” stimulates regional development, contributes to social stability, increase economic potential through the creation of new jobs in the sectors of the “green economy”.
  6. The Concept also states that the world community expects Kazakhstan to successfully implement landmark projects: the EXPO-2017 exhibition entitled “Energy of the Future” and the Partnership Program “Green Bridge” to promote sustainable development in Central Asian and other regions of the world.[8] In 2013, Kazakhstan was preparing for the World Expo 2017 and, accordingly, the country needed to strengthen the image of the progressive economy of the region, where special attention was paid to “green” technologies in accordance with the theme of the exhibition. It is strange that this premise is indicated latter in the Concept, despite the fact that this reason is the most likely to adopt the Concept at such a high level.

Analyzing the six prerequisites for its adoption indicated in the Concept, one can generally understand the picture of the state of affairs in the economy of Kazakhstan at the time of its approval. Prices for the main export items of Kazakhstan were at a relatively high level and the country could afford to start the transition to a conceptually new approach of development, especially considering the upcoming Expo 2017.

Tasks indicated in the Concept and the progress of their implementation

The following are the main goals[9] indicated in the Concept that must be achieved in order for the country to fully transit to “green economy”:

 

Analyzing the above table, it can be noted that the state has set rather high goals in terms of reducing the environmental impact, including pollution of the water and air basins, etc. Perhaps such a high bar was set to ensure the most likely achievement of at least average results.

For successful transition to a “green economy” the contribution of all parties is required: the state, industry and population. In case of non-participation or lack of motivation to participate in the implementation of the transition to a “green economy” of at least one side, the probability of implementation will rush to zero.

For this reason, the tasks indicated above must be accomplishable and all conditions must be provided for their fulfillment.

According to the following diagram,[10] despite the more stringent requirements for reducing emissions to the atmosphere and adopting the Concept for the transition to a “green economy”, in 2013-2016, enterprises operating in Kazakhstan just slightly reduced their emissions to atmosphere.

Table. Emissions of pollutants into the atmosphere (1000 tons / year)

Similar indicators are observed for other types of environmental pollution, including water basin, soils and so on. Due to the lack of appropriate infrastructure or funds, it is obvious that industrial enterprises are not interested or do not have the opportunity to reduce emissions into the atmosphere and bring them to the European indicators.

As for the share of waste recycling, the picture here, on the contrary, is more encouraging. According to the Minister of Energy of Kazakhstan, Kanat Bozumbayev, the share of recycled and utilized waste production in 2017 was 30.9%, municipal solid waste — 9%, herewith, since 2015 this indicators increased by 1.3 times for industrial waste, and by 5 times in household waste.[11] Considering that according to the tasks indicated in the concept, by 2030 the share of recycled waste should reach 40%, then, this goal looks quite achievable.

“The share of renewable energy in Kazakhstan’s energy – 0.5%”

If we talk about the production of energy from renewable sources, then, except for large hydropower plants, its share in the Kazakhstani energy sector does not exceed 0.5%.[12] Perhaps this is the most difficult and hard to implement of the tasks specified in the concept. Since, next year Kazakhstan should produce 3% of its energy from renewable sources. Despite the fact that several wind and solar projects have been implemented in the country with funding from leading investors and international financial organizations, the climate potential of the country, as well as the economic feasibility of these projects, remains questionable.

Conclusions and measures needed for the transition of Kazakhstan to “green economy”.

In general, for each item of the tasks specified in the Concept, there are certain difficulties. But at the same time, Kazakhstan has significant resources for their implementation.

“Straight after choosing Astana as the venue for the “Expo-2017” world exhibition, and the subsequent adoption of Concept for the transition to “green economy”, an active information campaign to promote “green economy” among the population, began on the main national television channels and publications. Unfortunately, given the important role of the population and its self-awareness, in the past two years after the completion of “Expo-2017”, this campaign has gradually disappeared. That once again confirms that the Concept was adopted in relations to “Expo-2017” exhibition preparation.”

If the transition to “green economy” is really important for the state, work in this direction should not be stopped. Moreover, this work should be carried out at all regional and public levels. Industrial enterprises should be allowed strictly limited emissions, and fines for excess emissions should be sent to local budgets to stimulate on-site control.

The state should stimulate the creation and growth of enterprises implementing projects and surveys on renewable energy sources. Given the climatic features of various regions of the country, it is important to most efficiently choose the type of energy source, as well as access to existing trunk grids.

The increase in share of renewable energy in the total amount of energy should have a positive effect on reducing emissions of pollutants into the atmosphere. However, taking into account the specifics of Kazakhstan’s heavy industry enterprises, the most effective way to reduce their emissions is to upgrade production facilities and financial incentives for specific indicators of emission reductions.

Regarding the reduction of formation and increase of waste processing volume, it is very important to promote and encourage the population and enterprises to separate waste collection, to use biodegradable materials, as well as more efficient use of resources. Large enterprises should be motivated to send their waste for recycling, rather than storing it in landfills.

In general, by analyzing the Concept, we can conclude that it was adopted at the right time and the tasks set out in it reflect important goals for the economy and the people of Kazakhstan. Nevertheless, taking into account the habits of the population that have developed over the centuries, the principles of management and the established system of work of industrial enterprises, the successful and complete implementation of the Concept is being questioned. Possessing enormous resources of traditional sources of energy, Kazakhstan is not interested in abandoning them in favor of the modern “green” technologies, though less harmful to the health of the population. In spite of this, global economic processes will sooner or later lead Kazakhstan to the inevitable need for a transition to “green” principles. And here it is important for the Republic not to miss the opportunity to become an important player in this sector, especially in the Central Asian region.


This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project implemented with the financial support of the Foreign Ministry of Norway. The opinions expressed in the article do not reflect the position of the editorial or donor.


[1] News portal Nur.kz. “Nazarbayev: Innovations presented at the EXPO cannot be postponed until tomorrow.” 12/22/2017. https://www.nur.kz/1709313-nazarbaev-innovacii-predstavlennye-na-ekspo-nelza-otkladyvat-na-zavtra.html                                                                                                                          

[2] Concept for the transition of the Republic of Kazakhstan to a “green economy” https://greenkaz.org/images/for_news/pdf/npa/koncepciya-po-perehodudu.pdf

[3] Official website of the United Nations Ecological Program. https://www.unenvironment.org/explore-topics/green-economy/about-green-economy

[4] Concept for the transition of the Republic of Kazakhstan to a “green economy” https://greenkaz.org/images/for_news/pdf/npa/koncepciya-po-perehodudu.pdf

[5] Ibid

[6] Concept for the transition of the Republic of Kazakhstan to a “green economy” https://greenkaz.org/images/for_news/pdf/npa/koncepciya-po-perehodudu.pdf

[7] Ibid

[8] Ibid

[9] Concept for the transition of the Republic of Kazakhstan to a “green economy” https://greenkaz.org/images/for_news/pdf/npa/koncepciya-po-perehodudu.pdf

[10] The official website of the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan http://stat.gov.kz/faces/wcnav_externalId/ecolog-A-1?_afrLoop=9145128903498341#%40%3F_afrLoop%3D9145128903498341%26_adf.ctrctfectr.actr.r.r.

[11] The news portal Kursiv. “The Ministry of Energy: 130 thousand tons of waste was recycled as part of the EPR.” 05.06.2018. https://kursiv.kz/news/otraslevye-temy/2018-06/minenergo-v-ramkakh-rop-pererabotano-130-tysyach-otkhodov

[12] Official site of the Kazakhstan International Exhibition «Power sector, electrical engineering and energy-plant engineering”. “How much is Kazakhstan ready for green energy?” Https://www.powerexpo.kz/ru/press-tsentr/otraslevye-novosti/678-naskolko-kazakhstan-gotov-k-zelenoj-energetike