Drivers of the «green» economy

Drivers of the «green» economy

19 March 2015

Bakhit Yessekina

Director of REC «Green Academy»,
a member of the Council on the «green» economy
under the President of the Republic of Kazakhstan,


Drivers of the «green» economy

The economic effect of carbon regulation and decarbonization is a cost reduction to improve the environmental quality and ensuring the sustainability of national economy.

In May of this year will be held the eighth annual Astana Economic Forum, which became the main expert platform of the country and annually brings together Nobel Laureates, heads of international organizations and diplomatic missions, famous scientists and economists. One of the first panels of AEF will focus on the issues of global climate change and development of carbon trading.

The Republic of Kazakhstan supports the global trend and is moving towards the development of the «green» economy by solving consistently the problems of each stage: from the strategic goals of transitioning to a «green» economy to the realization of the actual projects. Important direction of this work - decarbonization and carbon regulation that is one of the key instruments to mitigate climate change.

Politicians, scientists and experts from around the world have raised and continue to raise the issue of warming, which is likely to cross the critical threshold of 2°C, despite the steps taken to reduce greenhouse gas emissions. For the second year in row, the topic of climate change is not accidentally included in the agenda of the Davos forum. During this meeting in Davos, participants have stated an acceleration of the warming due to human activity and urged governments of developed and developing countries to take stronger measures to mitigate the impact of climate change on the global economic growth.

Climatic factors have had a significant impact on the business world, and IPCC UN experts predict that the pace and extent of this influence will only grow in the future. Thus, climate change poses significant barriers in operation of agriculture, oil and transportation companies, construction and other industries, causing an economic slowdown. Financial assessment of climate risk, including floods and hurricanes, cases and deaths of heat, energy demand presented in last year's Risky Business Report, indicate that the climate is acquiring more sensitive character to the economy from year to year. Thus, the common problem for all countries - the adoption of integrated solutions for mitigating climate change, so-called decarbonization strategies – is updated in light of the growing trend to diversify the sources of energy supply in virtually all countries of the world.

According to the forecasts of experts, in the next 10-15 years, the dependence on fossil fuels will be significantly reduced, while the activity of companies that provide renewable energy technologies (solar energy, wind energy, small hydro power plants) will increase dramatically. In addition, in accordance with the recommendations of the UN Framework Convention on Climate Change (UNFCCC), there are plans to tight emissions regulation at the international level and to introduce new standards, technological requirements, carbon trading and accounting of emissions during implementation of international projects.

Present the top 15 countries producers of carbon (US, Japan, UK, Russia, China, Indonesia, and others) have begun to develop strategies for decarbonization, involving regulation and comprehensive measures to «purify» the carbon from the national economies through sharply reducing emissions, introduction of innovative green technologies, including renewable energy and development of the carbon market.

One major area of focus for decarbonization – development and rapid expansion of trading system for carbon emissions. National reports of EU, USA, Japan and other countries show that carbon trading is an effective mechanism for promoting measures to reduce emissions and attraction of «green» investments. In December 2014 more than 80 states and more than 100 of the largest companies in the world approved the inclusion of the carbon component in the price of goods and services in Lima international conference.

Kazakhstan had joined the international community in the fight to mitigate climate change and reduce greenhouse gas emissions since the signing of the Framework Convention on Climate Change and the Kyoto Protocol ratification. Being a party to the UNFCCC, the country has made voluntary commitments to reduce greenhouse gas emissions and conduct a coherent policy to reduce the carbon intensity of GDP, the results of which are reflected in the III-VI national reports from 2006 to 2012. Within the framework the Copenhagen Accord (2009), Kazakhstan had a voluntary commitment to reduce greenhouse gas emissions by 15% by 2020 and by 25% by 2050 on 1990 base year levels.

Currently, the Ministry of Energy of Kazakhstan continues to work on improving the legislative framework for the implementation of international commitments on climate change. In July 2014, the Council on the transition to a «green» economy under the President of the Republic of Kazakhstan held its first meeting, which discussed the mechanisms of adaptation and was presented the draft recommendations to mitigate climate impacts on the economy.

Nevertheless, the issue of Kazakhstan’s joining the club of developed countries and high rates of economic growth require the preparation of a comprehensive plan to reduce the energy- and carbon intensity of GDP. Thus, according to the International Energy Agency, country CO2 emissions per dollar of GDP are 1.17 kg vs. 0.74 in Russia and 0.71 in the EU. For developing a plan of decarbonization and low-carbon development it is necessary to provide for measures to significantly reduce greenhouse gas emissions and a gradual shift in power from the combustion of hydrocarbon energy resources to renewable energy, energy-saving technologies in manufacturing, housing and communal services and transport.

In this regard, within the AEF panel session, we plan to present the best international experience of decarbonization with the participation of world-renowned experts. They are representatives of the Earth Institute at Columbia University (USA), the Potsdam Institute for Climate Impact Research (Germany), and Institute for Sustainable Development and Research (France), the Center for Environmental and Natural Resources Economics at the Higher School of Economics of Russia and others.

We hope that the session will discuss the risks of international carbon regulation for domestic manufacturers, the issues of the carbon ISO standards’ introduction, international cooperation mechanisms to reduce carbon emissions, Kazakhstan’s opportunities to join the project through the UN’s Green Climate Fund. In this regard, we invite interested government agencies, international organizations, businesses and NGOs to participate in our session to discuss constructive proposals to develop recommendations for decarbonization in general and the preparation for a new climate agreement, which is expected to be adopted by the end of this year in Paris.

In conclusion, the experience of developed countries shows that the economic impact of carbon regulation and decarbonization reaches hundreds of billions of dollars, as it includes the cost savings of environmental administration system, actually saving energy, increasing employment, improving the quality of the environment and providing the sustainability of the economy.

Source: Казахстанская правда, №50. 17/03/2015.

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