1. Fulfilment of Obligations aligned by
the Kyoto Protocol and beyond.
Y. Karazhan (Ph.D.), KEN Partners
Round table: “Positioning of Kazakhstan on a world arena and fulfilment of obligations
aligned by the Green Growth Strategy and Kyoto Protocol”
17- 19 August 2015
Workshop: “Promotion of Clean Energy in Resource-Rich Countries: Case Study of
Kazakhstan”. Conference Room Abylay Khan, Jumbaktas Hotel
Karasakal Yerimbet Street 65, Astana, Kazakhstan

2. • Kyoto Protocol
• Kazakhstan reporting
• Kazakhstan and Kyoto
• Scenarios, optimistic?
• Kazakhstan Emissions Trading Scheme (EMS)
• Scenarios, “down to the ground”
• What’s up with Doha
• Paris, waiting for wonders?
• Industry at odds
• Sources
• About KEN Partners and GR Academy
Outline

3. 11 December 1997 signed
Morocco 2001, the detailed rules for the implementation were adopted at COP 7 in Marrakesh
and are referred to as the "Marrakesh Accords."
16 February 2005 came into force after ratification by 55% of world emitters.
Commitment - cut emissions by 5.2% in 2008-2012, compared with 1990.
KP mechanisms – JI (Annex 1, e.g. Japan has 11 partnerships), CDM (Annex 1 invest in Annex
B) and Carbon Trade. Kazakhstan has special status.
Controversy:
• Unfortunately, USA with 35% of world emissions did not sign.
• Russia, Japan and New Zealand did not take commitments to cut.
• In 2006 overall emissions by KP were 17,2% lower than in 1990, but most of it – due to
“hot air” of the transition economies.
Kyoto Protocol

4. Kazakhstan reporting

5. Kyoto Protocol: in 2009 ratified, in 2012 part of Annex B for the second period (2013-20)
Commitments:
• 5% cut down from 1990 by 2020, legally binding
• 15% cut down from 1992 by 2020, voluntary
• 25% cut down from 1992 by 2050, voluntary
• 29% cut down from 1990 by 2020 , i.e. not to over-emit above the average annual
emissions in 2013-20 compared to emissions in 2008-10
(as per Doha COP Paragraph 3.7ter., yet to be ratified by two thirds).
If BAU there is expected increase GHG emissions (excl. LULUCF)
• 355–361 MtCO2e by 2020 - the level is comparable with 1990.
• 443–491 MtCO2e by 2030 - 24–37% increase from the 1990.
Measures to cut down emissions:
• In May 2013, Kazakhstan adopted its Concept for Transition to Green Economy.
• The Concept repeats targets included in the Kazakhstan 2050 Strategy (2012)
• This includes providing 50% of total energy supply by alternative and renewable
energy sources (including nuclear) and
• decreasing energy intensity of GDP by 25% by 2020 compared to a 2008.
• 2007 Amendments to ‘Ecological Code’, Emissions Trading Scheme was enacted in 2011.
Kazakhstan and Kyoto

6. http://unfccc.int/files/national_repor
ts/annex_i_natcom_/application/pdf/
kaz_nc3,4,5,6_eng.pdf
Scenarios, optimistic?
• Samruk Energy forecasts that power gen will escalate from 100 bn. kwh to 145
bln. Kwh, resource use will foster financial burden on Carbon economy.

7. Kazakhstan EMS, still optimistic
ETS Design Element Kazakhstan
Sector coverage Oil, coal, and gas; power; mining and metallurgy; chemical; agriculture
(debated); and transport (debated)
Emitters/Installations
Covered
178 companies, number of installations tbd
Emission Coverage Phase I: About 55% of Kazakhstan’s GHG emissions and 77% of CO2
Gases Covered Carbon Dioxide (CO2) and other gases after Phase I, e.g. Methane.
Threshold for Inclusion 20,000t/CO2e/yr
Offsetting Allowed mining and metallurgy; agriculture; housing and communal services;
forestry; prevention of land degradation; renewables; processing of
municipal and industrial waste; transport; and energy-efficient
construction.
Trading Periods Pilot phase (2013), Phase II (2014-2015), Phase III (2016-2020).
Targets Overall -7% below 1990 by 2020 and a 15% reduction by 2025 compared
with 1992.
The energy sector is -3% by 2015 compared with 2012.
0
2000
28.03.2014 28.04.2014 28.05.2014 28.06.2014 28.07.2014 28.08.2014 28.09.2014 28.10.2014 28.11.2014 28.12.2014 28.01.2015 28.02.2015 31.03.2015 30.04.2015 31.05.2015
EMS in 2015, KZT for 1 quota

8. Scenarios, CAT is more “down to the ground”

9. • In Doha, Ukraine, Kazakhstan and
Belarus gave their written
consent to join CP2.
• They also voiced clear opposition
to cancellation or limitation of
any surplus units, and may not
ratify CP2.
• Paragraph 3.7ter would foster
demand for AAUs: Belarus by 94
million, Kazakhstan by 290
million, Ukraine by 417 million.
• Because of 3.7ter they will have
to reduce emissions or purchase
Kyoto units from other countries.
Source: Carbon Market Watch
The Doha effect, time for concerns?

10. • Most of experts Paris will only consider framework conditions.
• Very possible scenario is discussion of a philosophy, rather than
anything related to numbers.
• It will be important to discuss strategic cooperation issues,
however. This will help avoiding conflicts but will not address burning
topics, which are on agenda of face-to-face discussions.
• The possibility to agree on numbers like «2 degrees С»
or «$100bn per year».
• Doha condition is only possible if Kazakhstan
economic development remains at 2009 rates.
• Otherwise with 5,54 Euro per 1 ton of CO2 in 2014
the cost of 290 mln. CO2 deficit will be
more than 1,6 bln. Euro.
• Carbon Market Watch, Bloomberg Energy Finance
predict even higher prices – up to 7.5 Euros.
Paris, waiting for wonder?

11. Industry at odds
KAZENERGY Association:
• Refrain from any formal commitments to cut down emissions as per Kyoto Protocol conditions,
particularly with regards to Doha Amendment.
• Consider halting EcoCode amendments regarding carbon markets till 2020, and pay attention
to technical renovation instead.
• Consider scenarios planning exercise done per industry and overall and consider changes to
environmental legislation based on economic assessment.
Chamber of Commerce
• Kazakhstan does not have commitments to cut, yet
(Doha Amendment is subject to ratification)
• KP participation does not oblige to develop national caps.
• Kazakhstan can continue with KP mechanisms without such commitments, energy efficiency,
alternative sources, green economy – are all good ways to progress.
• Without key emitters like US, China, India, Russia, Canada, New Zealand the “extra mile” efforts
to cut 0,7% worth of global emissions from Kazakhstan are not that significant.
• Doha Amendment ratification will cause degradation of all sectors of economy, social
disconnect, economic downshift.
• It is important that any further step with regards to national commitments is
discussed with the industry.

12. Sources
• The Kyoto Protocol Refernce Manual on Accounting of Emissions and Assigned Amount
http://unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf
• The Kyoto Protocol to the Framework Convention on Climate Change. 1997.
http://unfccc.int/essential_background/kyoto_protocol/background/items/1351.php
• The United Nations Framework Convention on Climate Change. 1992.
http://unfccc.int/essential_background/convention/background/items/2853.php
• Intergovernmental Panel on Climate Change. Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (the
IPCC good practice guidance) http://www.ipcc-nggip.iges.or.jp/public/gp/english/
• Intergovernmental Panel on Climate Change. Good Practice Guidance for Land Use, Land-use Change and Forestry, 2003 (the IPCC good practice
guidance for LULUCF). http://www.ipcc-nggip.iges.or.jp/public/gpglulucf/gpglulucf.htm
• CRF (2014). UNFCCC AWG-KP Submissions 2014. Common Reporting Format.
• EDF & IETA (2013). Kazakhstan. The World’s Carbon Markets: A Case Study Guide to Emissions Trading.
• ICAP (2014). Kazakhstan Emissions Trading Scheme (KAZ ETS).
• Republic of Kazakhstan (2013a). Concept for transition of the Republic of Kazakhstan to Green Economy.
• Republic of Kazakhstan (2013b). Third-Sixth National Communication of the Republic of Kazakhstan to the UN Framework Convention on Climate
Change.
• Republic of Kazakhstan (2012a). Information by Parties included in Annex I listed in annex 1 to decision 1/CMP.7 on their quantified emission
limitation or reduction objectives for the second commitment period under the Kyoto Protocol.
• Republic of Kazakhstan (2012b). Submission to the Ad-Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol
(AWG-KP): Information by Parties included in Annex I listed in annex 1 to decision 1/CMP.7 on their quantified emission limitation or reduction
objectives for the second commitment period under the Kyoto Protocol, 2 May 2012
• Republic of Kazahkstan (2010). Kazakhstan's pledge to the Copenhagen Accord. Compiled in: Compilation of economy-wide emission reduction
targets to be implemented by Parties included in Annex I to the Convention, UNFCCC (2011).
• NERA Economic Consulting and Bloomberg New Energy Finance (BNEF) (2011). The Demand for Greenhouse Gas Emissions Reduction Investments:
An Investors’ Marginal Abatement Cost Curve for Kazakhstan, Prepared for EBRD, October 2011, London.
• UNFCCC (2010). Compilation of pledges for emission reductions and related assumptions provided by Parties to date the associated emission
reductions, page 11-12
• National Chamber of Commerce, KAZENERGY Association correspondence with the Ministry of Justice, Ministry of Energy, 2015.

13. KEN Partners’ authorized program in continuing professional education
on government relations and corporate social responsibility
«GR Academy.
Strategic Communications»
In partnership with International Business House –
educational center of professional education fully accredited by
the British Energy Institute.
Registration number №307468.
2015 г.
Astana, Kazakhstan

14. Scope
• Correctly designed projects development strategy requires commitment
to common goals of all organizational company departments, while
internal decision making processes should be able to swiftly react to ever
changing external environment.
• Successfully implemented GR and CSR will help to increase efficiency of
companies, save and enhance brand, and achieve strategic advantages.
• «GR Academy» - is the first step to development of projects long-term
sustainable development strategy.
• The approach is based on an empirical model of assessment of business
long-term risks, taking into account specifics of extracting industry in
Kazakhstan.

15. • Social and marketing research
• risk assessment and long term strategic
consultancy
• Government and stakeholder management
• Reputation management and CSR
(Corporate Social Responsibility)
• CSR reporting
• Event management
• Fundraising
• Technology transfer
• Charity
• Education programs
What do we do
We strategically partner
with business and other
public associations, including:
• KAZENERGY Association,
www.kazenergy.com
• KazWeld Association,
www.kazweld.kz.
• KazAlliance Association,
www.kazalliance.org or on
Facebook

16. Contacts
Yerlik Karazhan, Ph. D.
Managing Partner
+7 701 979 09 66
Yerlik.Karazhan@kenpartners.kz
Yerken Azhigaliyev, C.S.A.P.
Managing Partner
+7 777 500 91 48
Yerken.Azhigaliyev@kenpartners.kz
KEN Partners LLP http://www.kenpartners.kz info@kenpartners.kz