To frame the discussion in this session on how to align different policies in order to mobilise financing for actions to achieve targets under the Green Economy and the INDC. The OECD has been conducting analytical work on climate-relate development finance for Kazakhstan and other EECCA countries, and also on energy subsidy reform. Last year the OECD also produced a report on “Aligning policies for low-carbon economy”. I would like to outline some of the key aspects to consider how kazakhstan efficiently and effectively move towards the targets and the Green Economy Concept and the INDC.
The goals of the Kazakhstan’s Green Economy Concept are truly ambitious, and sets clear targets on various sectors (incl. waste, water, energy, and climate change). Submission of INDC in 2015 was a milestone in reinforcing the country’s commitment to the targets under the Green Economy Concept. Achieving these targets clearly requires harmonised effort to address complex interactions between economic, political and social factors, and to shift actions from the current practices to a greener economic development pathway.
Some illustration of how ambitious INDC targets are. We need massive shift from coal to gas, and also to renewable energy such as wind power (to achieve 15% and 25% targets).
Efforts made to develop a range of climate policies: -the Green Concept -INDC -FiT and RTS -Energy audit -Modernisation for the manufacturing processes -Support for energy consumers in introducing RE and EE measures.
These policies require proper secondary legislations, technical specifications, levels of tariff pricing to be effectively implemented.
There may also be barriers to implementation because of other types of policies (e.g. FFS, Devaluation of Tenge)
Achieving climate targets is not only about climate policies but affected greatly by the other policy domains too. Examples include…
Misalignments exist everywhere including in many of the OECD countries. Fiscal policies: Environmentally harmful subsidies and incentives (e.g. fossil fuels) have been barrier to scaling up green finance in many countries. FUEL and ENERGY: Energy sector development plannig may be in favour of fossil fuel and contradict with renewable promotion. (Kaz: possible competition between offshore oil and gas developments and renewables) Competitiion policies: In the power sector, there is not fair and transparent competition between the state-owned enterprises producing or using fossil fuels and independent producers of clean energy Investment policies: (Kaz: There are different levels of ease to access finance between small and medium sized entities AND larger enterprises and State-owned entities). Transport: Both in developed and developing countries, the well connected transport network has come with heavy reliance on fossil fuels and internal combustion engines. We need to design the transport systems so that it can reduce unnecessary travel, shift to low-emission transport modes, and improve technologies for fuels and vehicles.
Promoting positive carbon pricing can be done through energy taxes and emission trading schemes. Removing negative carbon pricing is also very important, meaning that fossil fuel and energy subsidies need to be rationalised.
OECD Presentation: Aligning Policies for Mobilising Green Finance in Kazakhstan
FOR MOBILISING GREEN FINANCE IN
Green Growth and Global Relations Division,
OECD Environment Directorate
The first Policy Dialogue
under the Kazakhstan GREEN Action Platform
Astana, 20 October 2016
• Ambitious goals of Kazakhstan’s Green Economy
• 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.
1990 2013 2030(BAU) 2030
(ETS, PV and
• 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.
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)
• 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
– Target support for the uptake of low-carbon
Core climate policies are necessary…
• Kazakhstan has made progress in developing a range of
climate policies -now need effective and continuous
Turning climate policies into actions
Pillars Policy measures
(1) Carbon pricing Emission Trading Scheme (pilot)
Mandatory energy audit
Mandatory planning of energy
(3) Support for
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
FUEL and ENERGY
But not just climate policies that affect
• 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
• In a long-run, assessing new laws and regulations
would help to avoid policies that could create
future carbon lock-in.
Why policy coherence will help to achieve
• 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
– 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?
Assessing policies to scale up green
• 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
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
1. Develop and agree on a methodological framework to
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
5. Determine priority actions to be taken for better policy
(in the light of the INDC/ Green Economy Concept/ Concept for
Fuel and Energy Sector Development, etc.)
Possible next steps (for discussion)
• 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
• OECD (2015), Policy Guidance for Investment in Clean
Relevant OECD work (examples):