With COP26 well underway in Glasgow, the first multi-state agreements have been concluded, including one that unites “more than 20 countries and financial institutions” in halting financing for overseas fossil fuel development. Among its largest signatories are the UK, US and Denmark among others, all of which have committed to instead reallocate spending to financing green energy starting 2022. The agreement represents a victory for the UK given that London has spearheaded international efforts to definitely stop overseas coal funding in its capacity as G7 president. And it comes at a time when debates about how much money rich countries should spend on low-and middle-income countries to fight climate change – and in which ways – has reached a fever pitch.
Everyone agrees that these countries, even more so than highly industrialized ones, require many billions in funds to make the successful switch from fossil fuel dependence to widespread usage of renewables. The switch includes the development of new infrastructure for reaping all of the benefits of emissions-mitigating technology. With the onus primarily on the West, UK PM Boris Johnson again took the initiative at the COP26 by launching the ‘Clean Green Initiative’ (CGI) designed to help developing and middle-income countries “take advantage of green technology and grow their economies sustainably”.
Cooperation for climate
The plan was announced a day after Kazakhstan expanded a Strategic Partnership and Joint Efforts to Respond to Climate Change with the United Kingdom. In a joint statement, both countries pledged to increase cooperation on matters related to climate change mitigation, environmental and biodiversity protection, as well as new investment opportunities in the green energy transition and economy of both countries. To that end, London and Nur-Sultan stressed the importance of the Strategic Dialogue and the Intergovernmental Commission on Trade and Investment, the primary forum to discuss strategic investments.
That the UK would choose Kazakhstan as one of its priority partners in the fight against climate change is not coincidental, given that the Central Asian country has embarked on a determined push to radically transform its socio-economic system. Besides ratifying the protocol on the protection of the Caspian from pollution from land sources, and the introduction of a new Environmental Code in January this year, incorporating positive input from the European Union, Kazakh representatives at the COP offered details on the country’s long-term decarbonization strategy as well.
Eldorado for sustainable investment
Aiming to make Kazakhstan carbon neutral by 2060, the strategy supports Kazakhstan’s commitments made under the Paris Agreement, and builds on its first National Determined Contributions (NDC) of 2015, which envision an unconditional and absolute reduction of 15% of carbon emissions by 2030. Nur-Sultan predicts the share of fossil fuels to decline by 20% by 2060, along with a concurrent increase in renewable energy sources from 3% to 70%. Preliminary estimates put the number of investments needed to succeed in this at $650 billion – a staggering figure, but one that also hints at the country’s vast potential.
In fact, energy experts consider Kazakhstan among one of the few countries in the world that has a realistic potential in achieving its decarbonization targets, making it a prime destination for high-value and large-scale investments in climate-mitigation projects. For example, one of the largest projects of the Green Climate Fund (GCF) to date was the construction of renewable energy plants across the country. But with the right level of investments into the right type of technology – primarily wind and solar, but also increasingly nuclear as an “optimal solution” to the decarbonisation challenge – Kazakhstan’s renewable energy potential is expected to exceed its electricity demand in the long-run. As a consequence, the country could well become a Central Asian hub for the export of sustainably produced electricity.
Seizing the moment
In light of these developments, it’s no surprise that Britain’s business elite has been looking for opportunities in the run-up to the COP26 meeting – particularly in the sustainable development, finance, metallurgy and energy sectors. The fact that British companies across all of these sectors are already operating in Kazakhstan means that they have not only a head start over the competition but a vested interest in assisting with Nur-Sultan’s transformative goals. London has remained one of Kazakhstan’s largest strategic trading partners, and especially since Brexit, both countries have steadily deepened their relationship.
It’s clear that the current COP meeting is an unprecedented opportunity for the UK to make the impact of its leadership felt in the fight against climate change. Central Asia, with its vast natural resources, is one of the most promising destinations for investments, and with Kazakhstan at the core of the regional economy, the positive spill-over effects of a successful energy and economic transformation there will be felt all the way across Eurasia as well. This would not only a constitute a win for the UK or Kazakhstan, but for the global climate as well.