Carbon Tax Implementation: Advantages for Kazakhstan's Climate Goals and Economic Edge
In a recent article, senior advisers from the World Bank have highlighted the progress being made by middle-income countries in implementing carbon pricing policies. The article, authored by Susanne Aakerfeldt, Daniel Besley, Mustafa Ozgur Bozcaga, and Natasha Sharma, discusses the carbon pricing policies of Brazil, Turkey, South Africa, and Kazakhstan, and their respective impacts on each country's economy and carbon footprint.
Brazil leads with forest-based carbon offset strategies integrated into voluntary markets. The Brazilian Emissions Trading System (SBCE) and REDD+ projects, such as the Envira REDD+ project in Acre state, are attracting investment in forests and offset projects, supporting emissions reductions via forest conservation. Indigenous groups in Brazil have also launched a Native-led emissions strategy, emphasizing territorial protection and climate finance to support emission reductions.
Turkey operates a relatively new Emissions Trading System (ETS), which became operational in 2023. The policy covers large industrial facilities and power plants, imposing a cap on greenhouse gas emissions and allowing trading of emission allowances. Early reports suggest Turkey’s ETS has modestly increased the cost of carbon-intensive production, providing both a fiscal source and encouraging gradual decarbonization.
South Africa introduced a Carbon Tax in 2019, applying to large emitters and designed to gradually increase carbon pricing over time. The tax aims to incentivize emissions reduction in sectors such as power generation, mining, and manufacturing. Studies and government reports indicate the carbon tax has contributed to improvements in energy efficiency and an increase in investments in renewable energy projects.
Kazakhstan, with its existing emissions trading system, is considering the implementation of a carbon tax to complement its current efforts. Such a tax would help to decarbonize certain sectors and enhance the competitiveness of these industries in EU markets. The European Union's (EU) upcoming carbon border adjustment mechanism (CBAM) will account for the carbon emissions embedded in imported carbon-intensive goods, potentially impacting Kazakh exports.
The article suggests that a carbon tax could encourage investments in new and cleaner industries, creating jobs, supporting economic diversification, and aiding long-term growth in Kazakhstan. Additionally, a carbon tax could reduce domestic fossil fuel consumption, increasing export earnings and raising national income due to global prices exceeding domestic prices. The President of Kazakhstan has set a goal of achieving carbon neutrality by 2060, and a carbon tax could be part of Kazakhstan's policy toolbox to meet its climate goals and enhance economic competitiveness.
The summary table provided in the article compares the carbon pricing policies of Brazil, Turkey, South Africa, and Kazakhstan, highlighting their respective economic and carbon footprint impacts.
It is important to note that the views and opinions expressed in the article do not necessarily reflect the position of The Astana Times.
[References] 1. Indigenous groups launch native-led emissions strategy in Brazil 2. Brazil to host COP30 in 2025 3. Envira REDD+ project in Acre state 4. Certification standards for REDD+ projects 5. COP30 and Brazil’s domestic carbon market development
- The article mentions that Indigenous groups in Brazil have launched a Native-led emissions strategy, emphasizing territorial protection and climate finance to support emission reductions.
- The Brazilian Emissions Trading System (SBCE) and REDD+ projects, such as the Envira REDD+ project in Acre state, are attracting investment in forests and offset projects, aligning with the country's policy on carbon pricing.
- The President of Kazakhstan has set a goal of achieving carbon neutrality by 2060, and a carbon tax could be part of Kazakhstan's policy toolbox to meet its climate goals and enhance economic competitiveness, as suggested in the article.
