Ambitions for Carbon Neutrality and Future of Mining Cities in Kazakhstan

Kazakhstan is actively joining global efforts to combat climate change by taking measures to achieve carbon neutrality. Critical milestones of this process are marked by the adoption of the Concept of Transition to a Green Economy in 2013, the ratification of the Paris Agreement in 2016, and the recent approval of the Strategy for Achieving Carbon Neutrality by 2060 (the decarbonization strategy) in 2023. The decarbonization strategy envisages reducing coal extraction and partially transitioning to natural gas, which promises significant changes for the mining cities and regions of the country.

Madina Junussova.

The OXUS Society for Central Asian Affairs’ Kazakhstan Futures Program Fellows, academics from Kazakhstan and the USA, with financial support from the U.S. Embassy, conducted a study and prepared a policy brief. The Policy Brief discusses three future scenarios, pointing to the critical need to develop a comprehensive action plan that would consider not only the economic and environmental aspects of the transition but also the social consequences to ensure a just transition and sustainable development of Kazakhstan’s mining regions and towns.

Kazakhstan’s economy directly depends on the extraction and sale of hydrocarbons, which in 2022 accounted for 20% of the country’s GDP. The shift from hydrocarbons to more ecological energy sources necessitates addressing the economic and social consequences for mining cities such as Zhanaozen and Ekibastuz, that are already facing severe challenges, namely the increase of social tension and the failure of outdated coal heating infrastructure. The decarbonization strategy carries certain economic and social risks such as job losses and increased regional inequality. Therefore, it is important to carefully make assessment of all possible scenarios and elaborate adequate action plans for implementation of the strategy with maximum benefits and minimal costs.

Clash of ambitions and reality: Kazakhstan’s zero decarbonization scenario 

Experts indicate a need for more consensus among decision-makers at the national level about the necessity of decarbonization. The geopolitical situation and dependence on energy ties with Russia and China exacerbate skepticism regarding the feasibility of implementing large-scale socio-economic changes. The scenario assumes the continuation of current pro-carbon industrial policy without significant changes.

The state continues to support subsidies for the extractive industry, regulating prices and maintaining inefficient tariff policies to achieve affordability, sustain employment, and social stability artificially. On the one hand, such an approach may preserve employment in the hydrocarbon extraction sector and facilitate labor migration to mining regions. On the other hand, it may increase regional inequality and social tension, worsening the wear and tear of infrastructure and increasing the likelihood of technological disasters. 

For the transition from coal to gas, it is necessary to reduce the gas extraction cost and actively invest in the development of gas infrastructure, regional and local networks, and stations necessary for uninterrupted supply to cities and regions not yet connected to the gas supply system. However, the state is not rushing to develop gas infrastructure or is doing so only partially, laying main networks, and often leaving the financing of home connections to the users. 

Risky sprint: Scenario of rapid transition to decarbonization in Kazakhstan

The second scenario implies an active and rapid implementation of the decarbonization strategy in Kazakhstan, conducted on a top-down basis without adequate adaptation of regional policy. The Samruk Kazyna national company  is already assessing opportunities for large-scale decarbonization. However, without accompanying regional initiatives, this process may face serious obstacles.

Experts agree that such a transition would provide significant ecological benefits but emphasize the problem of assessing these effects due to the need for detailed statistics on the ecology and the health of the local population in the mining regions. The introduction of the carbon quota has already sparked a flurry of questions and misunderstandings from mining and energy companies, indicating possible difficulties in adopting new standards.

Despite the development of alternative energy sources, centralized delivery of clean energy reduces its efficiency and practical benefit for residents of nearby territories. Forced decarbonization may increase the proportion of people suffering from energy poverty in regions where energy costs exceed the population’s purchasing power.

Enforced reduction of extraction volumes could lead to an economic crisis, job loss, increased poverty levels, and intensified migration to economically more developed cities and regions of the country. Consequently, there will be increased migration to Almaty, Astana, and Shymkent, impacting the demographic load on their urban infrastructure. Thus, a rapid transition to decarbonization without thorough preparation and support at the local level could become a catalyst for economic upheavals and social discontent, undermining the stability and sustainable development of mining cities and regions.

Gradual transition scenario: Strengthening regional policy and seeking sustainable development of mining cities

The last scenario for decarbonization in Kazakhstan involves improving the quality of regional policy to create favorable conditions for the development of mining cities and regions. This approach focuses on local governance, where local authorities and businesses are involved in diversifying the economy and improving the quality of life. Experts highlight the critical need to improve regional policy by including all stakeholders’ opinions and developing local strategies considering each location’s unique conditions. 

Decentralization of power, which has already begun at the village level, is a significant condition for empowering mining regions and towns. Enhancing the financial autonomy of local authorities and addressing local issues at the local level is essential for effectively implementing decarbonization strategies. It includes fiscal decentralization, where taxes collected from local businesses remain in local budgets for re-investing in regional and urban development. In this context, the success of decarbonization depends not only on national strategies but also on the capacities of mining regions and towns to adapt to new challenges, ensuring social justice and economic diversity.

Recommendations for including mining cities and regions just transition to carbon neutrality in Kazakhstan

The third scenario of decarbonization, which involves a gradual transition with strengthened regional policy, is the most promising for achieving long-term sustainable development of the country. Based on the analysis of expert opinions, if the national government wants the country to benefit from the decarbonization strategy, it is crucial to consider the following nine steps for advancing carbon neutrality in Kazakhstan:

1. Organize a large-scale campaign to raise awareness and engage all levels of government, business, and the population.
2. Develop intersectoral interaction skills among government employees to create sustainable infrastructure and transition to green energy.
Organize joint meetings involving representatives of mining companies, the agricultural sector, and authorities to coordinate decarbonization measures in cities and regions of the country.
Involve academic and research institutions in greening the industry and educating local communities.
Reform legislation to strengthen local self-governance and effective use of local resources.
Support local initiatives and create long-term funds for the development of mining cities.
Organize retraining programs for those employed in the coal industry, focusing on youth and the female population.
Train local government bodies in planning and managing urban and regional development to create favorable conditions for sustainable development.
Encourage the active participation of the population in planning the future of their cities through involvement in the decision-making process, development of infrastructure and community centers, and support for effective forms of local self-governance.

Implementing these nine steps could form the basis for achieving social justice and a smoother transition to low-carbon development at all levels.

The author is Dr Madina Junussova, a senior research fellow at the Institute of Public Policy and Administration and an Urban Development Lead for GSD, University of Central Asia. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of The Astana Times. 

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