ASTANA – Central Asia needs a shared vision on addressing climate change, energy and water risks, and one that balances each of the region’s country’s interests. That is one of the key takeaways of a panel session with regional experts hosted by Harvard University’s Davis Center for Russian and Eurasian Studies on Jan. 30.
Experts note the rising vulnerability of Central Asia, a region of 76 million people, from climate change with its impacts, such as melting glaciers, drought, and more frequent extreme weather events, which stem from the region’s strong dependence on water resources, many of which are transboundary. This is also felt in the region’s highly interconnected energy sector.
“Energy, water and climate change are interconnected phenomena. We should look at them together,” said Iskandar Abdullayev, deputy director of the Urumqi-based CAREC (Central Asia Regional Economic Cooperation) Institute, an intergovernmental organization contributing to the CAREC program through knowledge generation and capacity building.
“Our region may be one of the most climate-affected regions globally. It is because of the frequency of natural disasters, temperatures changing, and shifting precipitation patterns. All are really obvious in our region,” said Abdullayev.
Speaking about energy, Abdullayev said he expected a continued increase in energy demand.
However, meeting the growing energy demand and ensuring energy security requires the introduction of additional renewable energy capacities. Despite the countries’ growing attention to renewable energy deployment, with Kazakhstan and Uzbekistan being at the forefront of these efforts, its share in the regional energy mix is still low.
Abdullayev emphasized that accessibility of investments and resource efficiency are key areas the region should address. There are two options – a market-oriented approach toward energy transition for countries with relatively developed energy sectors and institutional infrastructure in place, like Kazakhstan and Uzbekistan, and a development-oriented approach to improve energy efficiency with external support and expertise to overcome structural inefficiencies.
The current state of regional cooperation
Abdullayev said regional cooperation should target technical and financial challenges, focusing on rehabilitating existing and constructing new intra- and interregional energy-generating facilities and infrastructure.
According to him, water and environmental cooperation are more challenging, contingent upon countries’ ability to “synergize different national interests and develop regional priorities.”
How countries in the region perceive the water issue has changed over the years. He explained that until recently, water was an economic and political issue, with countries having diverging water programs. But now, water has become a strategic security issue, with political leaders understanding the need to work closely on water issues.
The expert said Central Asia lacks a common climate change vision. At the same time, economic plans rely heavily on energy use and the energy sector, despite the countries’ commitments under the Paris Agreement.
CAREC Institute Senior Research Fellow Shakhboz Akhmedov said regional cooperation is growing.
“If you look from an economic perspective, over the last five years, intra-regional trade grew by 50 percent, and overall turnover is almost $200 billion. This already says there is a transformative shift,” said Akhmedov, who has been involved in water and climate research in Central Asia for the past ten years.
But he noted the climate-water-energy nexus has been “in inertia.” He believes the governments could do more to encourage the private sector to bring additional financing and expertise to the region and strengthen their position in regulating the water-energy-agriculture-climate nexus by dropping the cost of renewables.
The recent agreement to launch the construction of the Kambarata-1 power station is a “positive signal,” he noted, but efforts could still be scaled up.
Dinara Ziganshina, director of the Scientific Information Center at the Tashkent-based Interstate Commission for Water Coordination in Central Asia, is more optimistic about regional cooperation than her colleagues.
The interstate commission was established immediately after the countries gained independence and it is so far the only interstate body established and authorized by the heads of Central Asian states to make binding decisions on current and emerging issues related to interstate water allocation and use.
While bilateral cooperation on water issues has accelerated since 2016, Ziganshina does not consider it enough.
“Working on a bilateral level cannot solve all problems in our basin. The recent agreement between the three countries on the road map for the construction of the Kambarata dam could be a very positive step if the three countries decide how to develop, construct, fill, and operate this hydropower system in a way that can be beneficial, not only for three countries but all basin countries,” she said.
She indicated that, by 2035, water demand would increase, requiring an additional 17.3-20 million cubic meters for drinking water supply, non-irrigation use, and technological inputs for flow regulation. It stems from the growing population, accelerated economic development, and new infrastructure, with the summer months expected to be the most critical.
The experts unanimously agreed on the need for investments. Akhmedov said investments should be directed to human capital development, which should be tailored to the sustainable development agenda of the region.
Ziganshina also emphasized the growing need for investments in research and education.
“It is a challenge not only for Central Asia. The water sector, in general, is lacking investments, and especially in Central Asia, because the water sector is not attractive to private investors. You always have to think about innovative ways to bring private investments into the sector. (…) I think it is the biggest challenge how to attract new actors, including the private sector, how to engage public-private partnerships at national levels, and how to incentivize all the actors to produce benefits but not lose the sense that it is a transboundary river and ecosystems cannot pay back,” she said.
According to Vladimir Norov, director of the Tashkent-based International Institute of Central Asia and former Uzbek Foreign Minister, reforming the existing energy pricing mechanisms is essential. But Central Asian leaders are very cautious about energy price hikes.
“At the same time, it is a big challenge because the incomes of our population are lower than those of developed countries,” he added.
Norov also sees the modernization of the existing infrastructure as a priority.
“It is expected that by 2030 electricity consumption in Central Asia will increase by 30 percent. The countries need to modernize the existing energy infrastructure and create new ones. Electricity losses during transmission amounted to 19.8 billion kilowatts per hour or more than 8.1 percent of the total volume of generated electricity,” he said.
Highlighting the need for investment, Norov said the region has the potential to attract at least $170 million of foreign investments over the next ten years.
But for that, there is a need for consistent dialogue and the will for “reasonable compromise,” taking into account the interests of all sides. The Cholpon-Ata consultative meeting between the leaders of five Central Asian states in July 2022 sent a positive signal after they signed a Regional Green Agenda Program for Central Asia. But more should be done, according to experts.
“Only through this way can you create an environment of mutual trust, respect and confidence,” he added.