Foreword
In May 2025, the Davis Center’s Program on Central Asia hosted the Supporting Kazakhstan’s Green Transition Workshop, supported by a Salata Institute for Climate and Sustainability seed grant. It brought together experts in climate change and energy transition from Harvard alongside key stakeholders and policy experts from Kazakhstan to discuss global and Kazakhstan-specific trends, emerging issues, and cross-cutting challenges in decarbonization. The workshop focused on four key areas: carbon pricing, finance, the politics of transition, and coal and methane. This report presents the main findings and insights from each of these thematic sessions.
We would like to give special thanks to Dani Podgoretskaya and Harvey Salgo, who greatly contributed to the development of the project, the organization of the workshop, and the drafting of this report.
Key Findings
● Kazakhstan’s 2060 Decarbonization Strategy sets ambitious goals for decarbonization, but it lacks a cross-sectoral roadmap and fails to clearly assign responsibility to specific actors, including a designation of how steps toward decarbonization should be coordinated across ministries.
● Without stronger carbon pricing and subsidy reform, Kazakhstan’s industries could lose access to premium markets and fall behind emerging global standards.
Kazakhstan’s Emissions Trading System (ETS) fails to provide meaningful incentives for decarbonization, as is reflected in the carbon price, which hovers around $1 per ton of CO₂eq.
Fossil fuel subsidies, which averaged 5.8% of GDP between 2010 and 2023, distort market signals, erode the ETS’s effectiveness, and inhibit industrial transformation.
With the EU’s Carbon Border Adjustment Mechanism (CBAM) coming into full effect in 2026, carbon-intensive exports such as iron, steel, aluminum, and cement face mounting competitiveness risks.
● The Astana International Financial Center (AIFC) has positioned Kazakhstan as a regional leader in sustainable finance, yet local markets remain shallow and borrowing costs exceed 18%, deterring investment in renewables. High certification costs, limited investor awareness, and currency volatility further restrict capital inflows.
● Capturing methane, and thus reducing emissions, could offer net economic gains but is not yet feasible at scale due to weak capture infrastructure and limited transport networks.
● Comparative lessons from China underscore both the risks of coal lock-in and the power of coherent regulation and industrial policy in scaling clean technologies.
Recommendations
● Kazakhstan should revise and strengthen its current decarbonization strategy to provide a clearer, cross-sectoral roadmap that aligns national objectives with concrete implementation steps.
● A revised decarbonization strategy must identify low-hanging fruit in power generation, where around 84% of electricity still comes from carbon sources, while also integrating non-power sectors such as transport and construction.
● Innovative tools like the proposed “Green Swap,” which links climate investors with emission-avoidance credits, could offer a promising mechanism to bridge the green financing gap. However, implementation would require robust certification, institutional capacity, sector planning, and coordination with multilateral development banks to ensure credibility.
● Sustained political commitment and engagement of key government stakeholders (including the ministries of National Economy, Finance, Energy, Ecology, Transport, Agriculture, and Water Resources and Irrigation) are essential to move beyond rhetorical targets toward tangible outcomes.
