Kazakhstans Priorities in Climate Change Process

Depending on the importance of global climate change consequences and on the world priorities of the problem, Kazakhstan thinks it necessary to continue the process of ratifying the Kyoto Protocol and obtaining the status of Annex 1 country, that will serve as a legal basis for participation in all the mechanisms of the Kyoto Protocol and attraction of external funds and new technologies.

At present Kazakhstan plans to continue works in the direction, with support of the world community, all the more, Kazakhstan does not rely only on external support, but also carries out serious researches. The country studied and continues studying vulnerability of economy and natural resources to climate change, and assessing possible activities to adopt to expected climate changes.

Priority activities for the nearest future:

1. To develop a National Energy-Saving Program including creation of conditions for development of renewable energy sources and increase of energy-efficiency of economy sectors; to launch the priority pilot projects on GHG emissions reduction, energy-saving, new technologies introduction, involvement of renewable energy sources in the energy balance that will help to assess practical possibilities of the Kyoto Protocol mechanisms in real conditions of Kazakhstan before the beginning of the commitment period (2008-2012); Kazakhstan has a list of projects ready for realization (about 50 in number);
   
2. To develop and approve at the governmental level the National Strategy on Climate Change. At present Kazakhstan is formulating national strategies for development of different economy sectors, that's why the problem of developing and approving at the governmental level the National Strategy on Climate Change is very actual;
   
3. To start establishing a national system of GHG emissions monitoring and control and to continue work over GHG inventory for annual reporting of its results to the UNFCCC Secretariat, after Kazakhstan has acceded Annex 1 to UNFCCC;
   
4. To begin implementation and monitoring of all activities aimed to prepare basis for ratification of the Kyoto Protocol.

Willingness of the Republic of Kazakhstan to enter into voluntary obligations will facilitate achieving the Convention's ultimate goal and obtaining global environmental benefits. Kazakhstan strives to make its considerable contribution in the efforts of the world community to realize policy, aimed at stabilization of greenhouse gases concentration in the atmosphere. However wish of the republic of Kazakhstan to enter Annex 1 is dictated not by populism and not only by the mere wish to address the challenge of climate change together with the world community. There are some evident benefits for the country, provided that the Kyoto mechanisms work successfully and interests of all countries are considered. Thus development of adequate mechanisms for management of GHG emission processes is a priority activity for the world community.

Introduction of energy-efficient technologies will help to reduce energy component of production costs and will increase competitiveness of the products at domestic and external markets. It will increase investment attractiveness of companies that are due to their activity GHG emission sources, especially for large transnational energy companies committed to reduce emissions. Realization of projects in Kazakhstan as in a country with transitional economy will allow to off-set GHG emissions cheaper than in developed countries, and in the framework of Joint Implementation (JI) projects it will create opportunities to attract additional financial resources from international funds and soft credits. Kazakhstan will obtain a new status: it will become a participant of GHG emissions trade, as later requirements for acceding Annex 1 can become stricter. We will be able to start a process of negotiations on selection of partners for joint implementation of projects and trade in emission quotas. Political benefits of these measures are obvious, as Kazakhstan is in the focus of attention from the both groups of the Convention's Parties: developing countries and countries included in Annex 1. It creates basis for further promotion of the Kyoto Protocol ratification and joining Annex ?. The process of obtaining grant assistance for further evaluation of consequences of ratifying the Kyoto Protocol will move from the dead point. Donors will provide funds for further GHG inventory, technical assistance for development of projects and project Feasibility Studies for joint implementation, etc.

For full-fledged participation of Kazakhstan in the active GHG emission reduction process it is necessary to make a complex of procedural arrangements. After implementation of all these procedures, including entering into quantitative GHG reduction obligations for the period of realizing the mechanism (2008-2012), Kazakhstan expects to become a full participant of the three Kyoto mechanisms. The Republic of Kazakhstan relies on certain assistance and support for realization of its initiatives from the world community and hopes to implement the planned activities successfully. At the same time, Kazakhstan shares apprehensions of developing countries that participation in the Kyoto mechanisms will negatively influence economic development of developing countries. In order to prevent this, all countries of the world can and must make the Kyoto mechanisms acceptable both for developing countries and countries with transitional economy and developed countries. It can become an unprecedented case when all countries of the world community combine their efforts in the face of the mutual global problem.

GHG Inventory.

The principle requirement for drawing up national GHG inventories is to apply the calculation methodology approved and adopted by the Conference of the Parties that will ensure international comparability and ability to correlate the inventories' outcomes. The methodological basis for calculating GHG emissions and removals were the IPCC Guidelines revised in 1996. In conformity with the Guidelines, Kazakhstan's Inventory consists of the five key categories: energy, industrial processes, agriculture, land-use change and forestry, wastes utilization. In the national GHG cadastre the data are presented on emissions of the following gases: carbon dioxide, methane, nitrous oxide, nitrogen oxides and non-methane volatile organic compounds (NMVOC).

For the inventory of 1994 the data were obtained form the Agency of Statistics of the Republic of Kazakhstan, from the Ministry of Energy, Industry and Trade and the Ministry of Agriculture. Because of the quick change of institutional and economic conditions of transitional period, difficulties in data collection, the structures of data for 1990 and 1994 do not completely coincide.

According to the inventory, the GHG net-emissions in Kazakhstan in 1990 amounted to more than 350 million tons of ??2-equivalent, and in 1994 - more than 230 million tons. In this way, total GHG emissions in Kazakhstan decreased by more than 34 %. The largest GHG emitter in Kazakhstan is energy activities, in 1990 it accounted to 291 million tons of ??2-equivalent, and in 1994 - to 195 million tons or 81.4 % and 81.1 % of total emissions correspondingly. In the category "Energy " about 90 % refers to emissions from fuel combustion and about 10 % - to fugitive emissions related to extraction, transportation and processing of fuel.

The GHG inventory, presented in the Initial National Communication (Initial National Communication of the Republic of Kazakhstan, 1998), identifies that emissions from energy are equal to 226 million tons of ??2. According to the results of the revised inventory it became about 266 million tons. The Initial National Communication also has data on ??2 emissions from industrial processes that amounts to 4 million tons. After some further revisions this value was 20 million tons. The main causes of this discrepancy are as follows. After the levels of CO2 emissions for the 90th were compared, it was found out that data for 1990 were not complete. Economic recession in the country began in 1990, and according to the experts' estimations, emissions in 1990 could not be lower than in 1991 or in 1992. Thus missing data on 1990 were completed with the data on 1991 and 1992. It increases emissions of 1990 in the category "fuel combustion "

The current state of Kazakhstan's electroenergy is characterized by the following features:

• High concentration of energy-producing facilities;
• Location of large energy plants mostly near fuel-extraction sites;
• Big share of cogeneration (parallel production of electricity and heat for production purposes and communal needs);
• Developed scheme of electricity transmission lines, where high voltage lines (500 and 1,150 kilowatts) serve as system-forming net;
• System of relay-type defense and anti-damage automated mechanisms, assuring stability of the Power grid in emergency and post-emergency situations;
• United vertical system of operational control management, realized by the Central dispatcher's point, regional dispatcher's centers, dispatcher centers of electrical energy consumers.

The technological basis for electrical energy of the country is the Power grid, which is the best form of energy production, transfer and distribution independent of the form of property in the energy sector and methods for generating wholesale and regional energy markets. The power grid of Kazakhstan is a highly automated complex of power plants and electricity networks with a unified operational regime, united centralized system of operational dispatcher's and anti-damage control, united system of development planning, technical policy, information channels, normative technological and legal regulation. The installed electrical capacity of power plants in Kazakhstan is about 18 gigowatts (heat power plants - 87.5 %, hydro stations - 12.4 %). Kazakhstan has a developed infrastructure of heat supply. The installed capacity of heat power plants is more than 6,700 Mwatts (38 % of the capacity of all power plants of the country). They cover about 40 % of heat consumption and about 46 % of electricity consumption in Kazakhstan.

Objectives and main priorities of energy sector development are identified in the "Program of energy development till 2030 ". They include the following:

• To achieve self-sufficiency of economy and population with electrical energy and consequently to obtain energy independence as a part of the national security;
• To create export competitive resources of electricity with their possible sale at energy markets of the bordering and third countries;
• To develop competitive market of electrical energy based on the electricity transportation and distribution network open for producers and on the dispatcher's system for control of electricity flow.
• The main strategic directions:

Creation of the united power grid in Kazakhstan;
Reactivation of parallel work with the united power grid of Russia and grids of Central
Asian countries;
Further development of open competitive market of electricity;
Maximal use of existing energy sources, their reconstruction and modernization; - Introduction of new facilities only if they are replacing import;
Improvement of the energy generation structure through development of renewable energy;
Reconstruction and modernization of the existing heat-supply systems using cogeneration as an effective energy-saving technology, helping to reduce consumption of organic fuel and reduce greenhouse gases;
Introduction of modern autonomous high-quality heat sources wherever it is economically and ecologically more beneficial than cogeneration and centralized heat-supply from boilers.

The situation in Kazakhstan's economy is so, that energy-use is decreasing, but it is obvious that the economy and level of energy-use will be stabilized and the opportunity will appear to move step-by-step to the new quality of life including:

• High-scale increase in the range, quality of material welfares and services, volumes of their use;
• Moderate or accelerated speed of economic growth;
• Significant improvement of ecological situation in the country.

The key objective in the new circumstances is to provide maximal involvement in the process of improving welfare of population and life quality. The second objective of electrification is to increase production efficiency and increase resources to address social goals.

Today forecasts of electricity consumption are very uncertain. In this respect possible electricity consumption in the "Program of energy development till 2030" is assessed in the form of "uncertainty zone", which size is extended with extension of the advance period.

Dynamics of the process will be determined by the factor of demand for electrical energy and programs on technical re-equipment of energy facilities according to the ecological norms used in the Republic of Kazakhstan. Developing technological norms for new boilers and/or for modernization of existing heat power plants, it is necessary to use the world experience of technical norm-setting, achieved level of technical development, specific environmental features of Kazakhstan, state and perspectives of economy formation. In addition norms must be beneficial for investment climate of the Republic of Kazakhstan.

One of the priority directions of developing energy and addressing environmental problems of Kazakhstan is use of renewable energy sources. The potential of renewable energy resources (hydropower, solar and wind) in Kazakhstan is rather significant. The potential of hydropower is estimated at about 170 billion kilowatt-hours per year, 62 billion kilowatt-hours can be used from the technical point of view, 27 billion kilowatt-hours can be used form financial point of view, and only about 8 billion kilowatt-hours are used now.

Kazakhstan possesses enormous potential of wind energy, especially in the "Djungar gates" and "Sheleksky Corridor " in Almaty oblast. Proximity of existing energy-transmission lines, good correlation of wind season with energy demand, as well as the local market of energy demand, make the question of developing these untraditional energy resources in the Djungar Gates and Sheleksky Corridor real. It should be noted that almost the whole territory of the Republic of Kazakhstan is good for installation of wind-power stations.

In spite of the northern latitude of Kazakhstan, resources of solar energy in the country are stable and can be used because of the favorable climatic conditions. The number of sunny days is 2,200-3,000 hours per year, and the energy of solar radiation is 1,300-1,800 kilowatts per a square meter per year, that makes it possible to use panels of solar batteries in rural areas, and portable systems of photoelectrio sources.

Analyses of geothermal and biological resources of the country show that their quality and potential of energy generation are not enough high. It seems most rational to use geothermal energy for heating buildings, and biological resources -- for generation of biogas with its further use for heating and cooking, as well as for production of manure.

The priority directions of GHG emission reduction in Kazakhstan in the sector of energy production include:

• Reconstruction and modernization of power stations using modern energy technologies;
• Increasing share of gas in the energy-balance;
• Introduction of renewable non-fuel energy sources in the energy-balance.
• One of the main strategic directions of developing energy sector till 2015 will be maximal use of existing energy sources, their reconstruction and modernization with introduction of new facilities only if they are replacing import.

Thereby, during the considered period the main task of the energy sector will be to change obsolete equipment of existing heat power plants for equipment of new generation. And introduction of the newest technologies, new high-efficient basic and subsidiary equipment will have a significant economical and environmental impact.

The most important direction of the Strategy will be reconstruction and modernization of the existing heat-supply systems using cogeneration as an effective energy-saving technology, helping to reduce consumption of organic fuel and reduce greenhouse gases.

Microeconomic analysis of the main sectors of Kazakhstan's real economy shows that the system crisis in the Republic is deepening. That's why the main objective of the governmental program (to stop recession of production and to start reanimation of economy) has not been achieved.

Economical policy should be directed to solving the most urgent problem that poses the largest threat to the country. Today for Kazakhstan this problem is not a high level of inflation or excessive budget deficit, that are within acceptable limits. The most dangerous is the problem of non-payments and related quickly growing internal and external debt of the republic.

In this regard selection of course in economic policy and implementation of effective real economy support policy, especially in the middle-term perspective, creating preconditions for realization of goals identified in the strategy "Kazakhstan-2030", becomes critically significant.