Financing green projects to achieve the goals of the Paris Agreement
March 24, 2023
The Government of Japan has expressed interest in cooperating with Kazakhstan under the “Joint Crediting Mechanism” (JCM), a new tool for achieving the countries' climate commitments to the Paris Agreement. The mechanism's advantages and requirements were discussed by Japanese officials and the Kazakhstani delegation during a recent UNDP-supported study tour to Japan.
The implementation of projects within the framework of the Joint Crediting Mechanism will create the conditions for the furthering of the goals of the Paris Agreement. Kazakhstan may become one of the first countries in the region to attract green investments and the transferring of carbon emission reduction units in return,"said Shattyk Tastemirova, head of Adaptation to Climate Change Unit of the Climate Policy and Green Technologies Department, who took part in the meetings with the Japanese side.
During the Summit on climatic ambitions in December 2020, the President of Kazakhstan, Kassym-Jomart Tokaev, set an ambitious goal of Kazakhstan to reach carbon neutrality by 2060 in accordance with the country's enhanced national climatic plan.
The JCM proposed by the Japanese government provides for the involvement of private investment in the distribution of advanced technologies and the creation of infrastructure to reduce or remove greenhouse gas emissions. Projects are implemented in the partner country (in this case, Kazakhstan), and the amount of emission reductions from these projects are partially credited to the country that invests in these projects (in this case, Japan). The proposed JCM provides the opportunity of subsidies to the cost of low-carbon technology for the entrepreneurs who implement approved green projects in Kazakhstan.
During the visit, the parties discussed the possibility of signing a memorandum that will provide for the launch of the “Joint Crediting Mechanism”, the establishment of the necessary regulatory framework, a monitoring system, and the accounting and validation of greenhouse gas reductions during the JCM's implementation in Kazakhstan.
Today, the Kazakhstan is exploring carbon markets to attract “green” investments. To this end, the country is developing regulatory, institutional, and legislative norms for the development of new investment vehicles in the green economy. With the support of UNDP, who have provided analytical and expert support for the formation of a support system for green projects, pilot initiatives are implemented in the area of energy efficiency and energy saving, sustainable agriculture, etc.
All these measures will allow Kazakhstan to create conditions for attracting “green” finance in technological modernization of production facilities in the country, implementation of low-carbon projects, including through "Internationally Transferred Mitigation Outcomes" (ITMO)*.
*ITMO “Internationally Transferred Mitigation Outcomes” are the units of greenhouse gas reductions that may be applied within the international emissions trading mechanism of the Paris Agreement.
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