Separate Issues of Transition to Low-Carbon Economy: View of a Petroleum Lawyer
Gadilbek Mursaliyev, Member of Kazakhstan Petroleum Lawyers Association, Master of Laws (LLM), Master of Arts in Economics
Participation of the Republic of Kazakhstan in climate change events
Climate changes present an extraordinary global issue beyond national borders. This issue requires adoption of coordinated decisions at all levels and carrying out global cooperation to help countries’ transition to low-carbon economy.
The Republic of Kazakhstan takes an active part in the solution of this issue. Thus, our country approved the UN sustainable development goals, ratified tens of international environmental conventions, thereby confirming its adherence to the global course of devising a new model of economic growth subject to “green principles” of development and transition to low-carbon development. Specifically, Mr. Kassym-Jomart Kemelevich Tokayev, President of the Republic of Kazakhstan, during the Climate Ambition Summit in December 2020 made public announcement of Kazakhstan’s intention to attain carbon neutrality by 2060.
A key document in this matter is the 2015 Paris Agreement. This agreement envisages keeping “the increase of global average temperature significantly below 2°C above the industrial level and continuing efforts to restrict the rise of temperature to 1.5°C above the industrial level”. Based on the data of the Intergovernmental Panel on Climate Change (IPCC), achieving the target of 1.5°C will require that countries reduce emissions in all branches of the economy, and increase capture by absorbent materials subject to natural (e.g. forestry) and technological (e.g. carbon capture and storage) solutions.
Within the framework of the Paris Agreement all countries should make every effort to fight climate change. Moreover the developed countries have financial and other obligations to help developing countries accelerate decarbonization of the economies. There was established the Green Climate Fund along with numerous other global and governmental funds of the developed countries, which can finance projects for mitigation and adaptation of vulnerable countries.
Within the framework of the Paris Agreement all countries should make all efforts to fight climate change. Moreover, the developed countries have financial and other obligations to help developing countries accelerate decarbonization of the economics. There was established the Green Climate Fund along with many other global and governmental funds of the developed countries which can finance mitigation projects and projects for adaptation of the vulnerable countries.
Each country may apply its own strategies to attain their nationally determined contributions (NDC). All countries regularly, at least once in five ears, should renew their NDCs in achieving the temperature targeted in the Paris Agreement. In addition, each country is expected to increase climate ambitions on a regular basis. Decrease in earlier assumed obligations to reduce greenhouses gases emissions is not acceptable. Such action will cause the country’s withdrawal from the Paris Agreement depriving of access to any international donor assistance, envisaged for decarbonization of the economy and adaptation to the consequences of climate change.
Given that the issue of climate change directly affects our country. Based on the long-term forecast, the rise of the annual average temperature is expected in Kazakhstan by 2.4-3.1°С by 2050 and by 3.2-6.0°С by 2100 as compared to the average indicators for a period of 1980-1999. Moreover there exist serious problems related to environmental pollution; therefore one can only encourage the active participation of the Republic of Kazakhstan in the international programs for climate change. At the same time it is necessary to understand that the target of the country’s leadership to attain carbon neutrality by 2060 is very ambitious and will not be achieved without specific decarbonization goals and efforts without taking into account of the existing structure of the economy and without maintaining the investment attractiveness of Kazakhstan.
Transition to low-carbon economy and investment climate
Since acquiring its independence Kazakhstan achieved significant economic advances. In the context of economic globalization and liberalization of trade, subject to enhancement of openness of Kazakhstan, rich subsoil resources and stable investment environment make Kazakhstan an attractive receiving country for foreign companies. Undoubtedly foreign investments brought into Kazakhstan large capital, modern technologies and advanced managerial experience. However the economic growth of Kazakhstan continues to depend in general on traditional branches with a high level of environmental pollution, and it is expected that that this tendency will remain in the foreseeable future.
This circumstance in many respects determines complexities in the issue of transition of Kazakhstan to low-carbon development. It’s plain to see that the state needs to somehow resolve an internal conflict between the growth of the national economy, which in general relies on the export of fossil fuel and implementation of a complex of measures with regard to the transition to a new growth model, having retained investment attractiveness, it is known that without the participation of foreign capital it is rather difficult to achieve planned economic indicators and get integrated into the world economy. Their application can facilitate both the solution of economic tasks and achievement of the goals of social and economic development. To attain this, the government should improve basic conditions of the investment climate and prevent discrimination with respect to foreign investors.
Transnational corporations retain a dominating position in the investment sphere in Kazakhstan. The role of foreign investors in the country’s economy is so significant that it is practically impossible to manage the issue of transition to low-carbon economy. Therefore if the implementation of state measures requires financial injection, it is quite natural to take into account the opinion of the investors’ who make significant contribution to replenish the budget, and additionally use their own resources of different kind to introduce green technologies. First, their presence provides an opportunity to use intangible assets, such as knowledge of clean technologies and pollution, control facilitating production of effective products as compared to those produced by domestic companies, because multinational business organizations have advanced technologies of energy saving and pollution absorption. Secondly, transnational corporations usually observe high standards of environmental protection, when they carry out their business in their country. Thus, one expects that when they carry out their business abroad, such organizations probably will maintain high level environmental standards they used to observe in their country. Therefore the strategy of development and all enforced legislative acts and governmental measures should take into account the interest of foreign investors, in order not to cause damage to the sustainable economic development in pursuit of “green energy”.