Impacts of Amended US Policies on Kazakhstan's Aim for Renewable Energy

Impacts of Amended US Policies on Kazakhstan's Aim for Renewable Energy

Missive From the Steppes:

ASTANA—A Cloudy Forecast Ahead for Kazakhstan's Eco-Economy

Photo credit: istockphoto.com

U.S. President Donald Trump's whirlwind policy changes in the energy sector, including the declaration of a state of emergency and the nation's exit from the Paris Agreement, have fueled concerns about Kazakhstan's burgeoning green economy.

Trump, with his characteristic pizzazz, has proposed axing support for massive wind farms and slashing subsidies for electric vehicles. His administration is also contemplating slashing investments in renewable energy, a move that Hairushev, the director of the Department of Energy and Housing and Utilities at the Atameken National Chamber of Entrepreneurs, worries could destabilize global efforts to combat climate change.

Trump's advocates argue that such measures would lower energy costs for Americans and bolster traditional industries such as coal, oil, and gas. But Hairushev insists that doing so could deal a critical blow to international efforts to transition to a sustainable economy.

Hairushev also warns of potential long-term consequences, including the United States forfeiting its lead in green technology and reducing its technical prowess. Deeper still, the withdrawal from climate policies could worsen natural disasters like hurricanes, droughts, and floods, leading to catastrophic economic losses.

Easing environmental regulations could help U.S. companies boost their global competitiveness, but Hairushev believes that ignoring climate change could jeopardize U.S. leadership on the international stage and strain relations with key partners.

Economists, however, point out that the short-term benefits derived from slashing climate program spending could support traditional industries, create jobs, and lower energy costs in the United States. But such a move could come with steep long-term costs, with renewable energy, which has become a key driver of global economic growth, taking a backseat.

Investor deposits in oil companies might see a temporary surge, but the scales could tip at the next presidential election if the Democrats regain power. Green energy could reclaim its priority status, the impact of the current changes possibly short-lived.

Meanwhile, Lazic, a renowned commodities markets consultant at Kpler SAS in London, echoes a sentiment shared at the World Economic Forum in Davos: the global shift to green energy is inevitable. She argues that even if Trump manages to slow progress, his efforts will not reverse the tide entirely.

The drama unfolding across the Atlantic is causing ripples in Kazakhstan, Hairushev points out. The reduction in global interest in climate initiatives could make it difficult to lure investments in Kazakhstan's nascent green economy. The turbulent winds of change could jeopardize the development of key renewable energy projects and push Kazakhstan to deepen trade and diplomatic ties with partners who remain committed to a green future.

Despite these challenges, Kazakhstan must persist in its efforts to develop low-carbon technologies to keep pace with the evolving global energy landscape. A diversified investor base, strong domestic support for renewable energy, and regional cooperation could help Kazakhstan stand the test of time and weather these stormy economic forecasts.

The original article was published by Kazinform.

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Shadows Over the Horizon

A decline in global climate initiative interest could result in several long-term challenges Kazakhstan's green economy:

Risks on the Horizon

1. Investment Reduction
2. If global interest in climate initiatives wavers, foreign investments in renewable energy projects worldwide, including Kazakhstan, could decrease. This reduction in investments could delay the commissioning of new renewable energy facilities, making it difficult for Kazakhstan to achieve its goal of commissioning over 8.4 GW of renewable capacity by 2035.
3. Market and Trade Challenges
4. Kazakhstan's efforts to integrate into global green markets and trade could be hindered by the reduced global interest in climate initiatives. The country's initiatives to foster green growth and trade connectivity, notably through the Trans-Caspian International Transport Route, could lose steam.
5. Technological Progress Impasse
6. Decreased attention on climate initiatives could slow the pace of technological innovations in renewable energy, limiting Kazakhstan's access to state-of-the-art technologies and best practices. This could result in decreased efficiency and competitiveness in Kazakhstan's renewable sector.
7. Policy and Legislation Adaptation Hurdles
8. The changing U.S. energy policies could impact the global renewable energy trend and legislation. Kazakhstan may be forced to adjust its energy policies and legislation to align with the new international norms, causing potential challenges if global interest in climate initiatives wanes.
9. Economic Diversification Challenges
10. Kazakhstan's bid to economically diversify through the development of a green economy could face obstacles. A decrease in foreign investments might result in excessive reliance on traditional fossil fuel sectors, stifling the development of a sustainable economy.

Coping Mechanisms

To address these risks, Kazakhstan could focus on:

• Investor Diversification: By increasing investments from a broad range of countries and regions, including those that remain committed to supporting the green economy, Kazakhstan can lessen its exposure to shifts in global energy policy.
• Domestic Support: By ensuring consistent domestic support for renewable energy through appropriate policies and incentives, Kazakhstan can contribute to the sustainability of its renewable energy sector and reduce its dependence on foreign investments.
• Regional Cooperation: Engaging in regional partnerships can help maintain the momentum of green energy development even as global support wanes. Such cooperation can provide a buffer against unpredictable fluctuations in international climate policies.

By diversifying its investor base, building a strong domestic foundation for renewable energy, and forging regional alliances, Kazakhstan can endure the vicissitudes of the global energy landscape and secure a sustainable future for its green economy.

1. The decline in global interest in climate initiatives, fueled by policy changes in the United States, could lead to a reduction in investments in renewable energy projects worldwide, including Kazakhstan, potentially delaying the commissioning of new renewable energy facilities and hindering Kazakhstan's goal to commission over 8.4 GW of renewable capacity by 2035.
2. The reduced global interest in climate initiatives could challenge Kazakhstan's efforts to integrate into global green markets and trade, particularly in fostering green growth and trade connectivity initiatives such as the Trans-Caspian International Transport Route.
3. Decreased attention on climate initiatives could slow the pace of technological innovations in renewable energy, limiting Kazakhstan's access to state-of-the-art technologies and best practices, which could result in reduced efficiency and competitiveness in Kazakhstan's renewable sector.
4. Kazakhstan may face challenges in adapting its energy policies and legislation to align with new international norms arising from changes in U.S. energy policies, particularly if global interest in climate initiatives wanes.
5. A decrease in foreign investments in Kazakhstan's green economy could result in excessive reliance on traditional fossil fuel sectors, stifling the development of a sustainable economy and obstructing Kazakhstan's economic diversification goals.

To address these risks, Kazakhstan could diversify its investor base, ensure consistent domestic support for renewable energy, and engage in regional partnerships to maintain momentum in green energy development.

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