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OECD Presentation: Aligning Policies for Mobilising Green Finance in Kazakhstan


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Presentation by Mr. Takayoshi Kato at The First Dialogue under the Kazakhstan GREEN Action Platform

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OECD Presentation: Aligning Policies for Mobilising Green Finance in Kazakhstan

  1. 1. ALIGNING POLICIES FOR MOBILISING GREEN FINANCE IN KAZAKHSTAN Takayoshi Kato Policy Analyst, Green Growth and Global Relations Division, OECD Environment Directorate The first Policy Dialogue under the Kazakhstan GREEN Action Platform Astana, 20 October 2016
  2. 2. • Ambitious goals of Kazakhstan’s Green Economy Concept • The goals reiterated/reinforced in Kazakhstan’s INDC (Intended Nationally Determined Contribution) – 15% reduction in GHG emissions by 2030 below 1990 – 25% reduction in GHG emissions for the same period (Conditional on international support) • Need for concerted effort to address complex economic, political and social factors. 2 Context
  3. 3. 0 100 200 300 400 500 1990 2013 2030(BAU) 2030 (ETS, PV and Wind) 2030 (INDC: -15%) 2030 (INDC: -25%) • Example: Even if the Kazakh ETS were implemented and some solar and wind power plants were installed, further emission reductions would still be needed for achieving the INDC targets. 3 Deep decarbonisation needed for achieving the INDC targets Sources: Based on Suleimenov et al (2016) Exploring pathways for fulfilment of Kazakhstan’s INDC targets; and Government of Kazakhstan (2016) The 2nd Biennial Report to the UNFCCC; Figure: GHG emission scenarios under different targets (MtCO2e)
  4. 4. • They need to: – Be stable and predictable – Provide a strong price on carbon, so that low carbon investments are competitive with carbon intensive technologies (e.g. coal) – Provide strong regulatory support in areas where price signals are not efficient, such as in energy efficiency measures – Target support for the uptake of low-carbon technologies 4 Core climate policies are necessary…
  5. 5. • Kazakhstan has made progress in developing a range of climate policies -now need effective and continuous implementation 5 Turning climate policies into actions Pillars Policy measures (1) Carbon pricing Emission Trading Scheme (pilot) Feed-in-Tariff System (2) Regulatory measures Mandatory energy audit Mandatory planning of energy efficiency measures (3) Support for technology development Green Technology Centre (planned) Source: Based on GoK (2015), Intended Nationally Determined Contribution, and GoK (2013), Concept for Transition of the Republic of Kazakhstan to Green Economy, Table: Selected examples of climate policies in Kazakhstan 5
  6. 6. FUEL and ENERGY But not just climate policies that affect climate targets TECHNOLOGY COMPETITION FISCAL SOCIAL TRANSPORT INVESTMENT CLIMATE 6
  7. 7. • Some experiences of the OECD countries: – Existing policy frameworks are not automatically aligned with climate goals. – Decades of coal, oil and gas use have made their marks on policy frameworks. – Diagnosing policy misalignment and improving coherence help to move towards more cost- effective climate action and higher ambition over time. • In a long-run, assessing new laws and regulations would help to avoid policies that could create future carbon lock-in. 7 Why policy coherence will help to achieve climate/development targets?
  8. 8. • Certain coherence exists at the target level: e.g. the Green Economy Concept and the Kazakh INDC • Worth also looking into misalignments and coherence at the policy-level – Is the Kazakhstan’s current investment framework collectively in favour of “green” investment (e.g. the level of fossil fuel subsidies)? – Are targets towards a green economy mainstreamed into national development and investment plans? – How should carbon pricing be put in place so that it stimulates green finance? 8 Assessing policies to scale up green finance
  9. 9. • Bilateral & multilateral (public) finance: climate consideration mainstreamed into certain sectors (e.g. energy), but not all. • Need for further clarity how domestic and private investments are being mobilised in line with climate/green economy goals. 9 Scaling up infrastructure investment, and Shift from “brown” to “green” needed Figure: Share of climate-related development finance in total development finance (From international public sources to Kazakhstan in 2013-2014) Source: OECD (forthcoming), Financing climate action in Eastern Europe, the Caucasus and Central Asia % Share of climate- related finance
  10. 10. 1. Develop and agree on a methodological framework to diagnose misalignments. 2. Select policy domains to start the diagnosis with: (Energy; investment; taxes/subsidies; technology; transportation etc.) 3. Conduct an assessment/diagnosis. 4. Organise a cross-ministerial workshop(s) to discuss the results. 5. Determine priority actions to be taken for better policy alignments. (in the light of the INDC/ Green Economy Concept/ Concept for Fuel and Energy Sector Development, etc.) 10 Possible next steps (for discussion)
  11. 11. Thank you. Takayoshi Kato
  12. 12. • OECD (2015), Aligning policies for a Low-carbon Economy • OECD (forthcoming), Financing climate action in Eastern Europe, the Caucasus and Central Asia • OECD (forthcoming), Multi-dimensional country review of Kazakhstan • OECD (2015), Policy Guidance for Investment in Clean Energy Infrastructure 12 Relevant OECD work (examples):