Republic of Kazakhstan: Selected Issues

This Selected Issues paper takes stock of climate-related challenges and policies in Kazakhstan. Kazakhstan faces increasingly pressing climate-related risks, including from catastrophic natural events, and from potential losses in output and jobs due to global decarbonization. The authorities have made significant progress in tackling these challenges through adaptation, mitigation and transition policies. Looking ahead, more ambitious and comprehensive efforts are needed, including phase out fossil-fuel subsidies, raise carbon prices, and facilitate the transition to renewable energy sources. Other policy priorities include establishing early warning systems for catastrophic climate events, integrating climate considerations in fiscal and monetary policies, and tailoring certain reforms to carbon-intensive sectors. The quantitative analyses presented in this paper show that Kazakhstan is relatively well positioned to address climate-related challenges, as it benefits from substantial policy space, buffers, and significant prospective public resources from future carbon taxation. This will help cushion the potential adverse impacts of economic greening and transformation, especially on the most vulnerable population groups.