“The most difficult issues in the discussion of the new environmental code within the walls of parliament will be related to counterarguments from the side of the “big” business,” Eldos Abakanov, Deputy Chairperson of the “Kazakhstan Association of Environmental Organizations”, analyzes the legislative innovations in an article, written specifically for CABAR.asia.
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One of the key trends in modern development is the benchmark for sustainable development, which implies harmonious development in terms of environmental, social and economic components. The world community is aimed at a “green” transformation of economic processes with an eye toward respect for the environment. In 2020, the main topic of the World Economic Forum in Davos was ecology and the whole range of related problems.
According to the World Bank, Central Asian countries are more prone to climate impacts. ADB experts determined that the average damage from the impact of climate change in Central Asia will be close to $ 547 million per year by 2050.
Kazakhstan’s focus on the formation of an environmentally friendly economy is enshrined in the concept approved in 2013 on the transition of the Republic of Kazakhstan to the “green economy”. To implement the ambitious goals of the concept, a number of laws and by-laws were adopted (on energy conservation and energy efficiency, support for renewable energy sources, etc.). Mechanisms and instruments of economic incentives are also used.
Environmental image of Kazakhstan
By the end of 2020, it is expected to bring the share of renewable energy to 3% (by 2030 – to 10%) and reduce the energy intensity of GDP to 25%, in 2019 the share of municipal solid waste processing in the republic amounted to 13.2%.
Despite the positive sectoral results in the direction of the “green economy”, a rather critical environmental situation is still observed in Kazakhstan.
The state of the environment is relatively stable and does not exceed the established maximum allowable concentrations (MAC) of pollutants in the atmospheric air of populated areas. However, it should be noted that the MAC according to PM 2.5 (particulate matter) in Kazakhstan is higher by 28.5% according to the established WHO requirements.
In order to inform annually the population about the actual environmental situation on the territory of Kazakhstan, on the basis of Article 166-1 of the Environmental Code of the Republic of Kazakhstan, a National Report on the state of the environment and the use of natural resources is being developed.
The National Report reflects data on the qualitative and quantitative characteristics of the environment and natural resources, the ecological situation in the regions, the anthropogenic impact on the environment, including the main socially significant environmental problems, the implementation of state policy in the field of the environment and the use of natural resources.
Consequently, in 2018, emissions of pollutants into the atmosphere from stationary sources (in comparison to 2017) increased by 3.8% and amounted to 2,446.7 thousand tons. Of the total share, the main volumes of polluting substances in the atmosphere are in Pavlodar region – 28%, Karaganda region – 24.01%, Atyrau region – 7%, Aktobe region – 6.46% and East Kazakhstan region – 5.34%.[1]
It should be noted that in 2018, the share of industry amounted to about 30% in the structure of GDP. In dynamics, production volumes of the mining and metallurgical industry are growing and since 2013, mining of metallurgical ores has grown by 2 times, and metallurgy by 2.5 times. Accordingly, the environmental situation in those cities where industrial facilities are located, the air pollution index is at a high level.
At the same time, the problem of air pollution exists in in non-industrial cities of the country as well. For example, according to the data of the RSE “Kazhydromet”, from 2016-2019, the main air pollutants in Almaty are nitrogen dioxide, sulfur dioxide, carbon monoxide and suspended solids. According to the monitoring results of 16 observation stations, the environmental status of the air basin of Almaty in 2019 was “7”, that is, it refers to the “high” level of pollution.
In the structure of the population’s morbidity, the share of respiratory diseases is 43.5%, and only in the city of Nur-Sultan the number of cases with respiratory diseases from 2015 to 2016, increased by 44%.[2]
The population has started to “physically” feel the deterioration of the environment. In social networks, environmental issues such as “black” snow in Temirtau, a mass death of fish in Atyrau, etc., caused a public outcry in social networks.
It is important to note that a favorable environment ensures economic sustainability. Considering the impact of ecology on the economy, many economists start from the Kuznets environmental curve, where GDP increases to a certain peak, not considering the impact of economic processes on the environment, after which there is a decline in economic development.
According to a study by Spanish scientists of 119 European cities, it was revealed that environmental factors directly affect economic growth. According to scientists, environmental factors account for 20.2% of GDP growth per capita.
In view of the foregoing, it is undoubted that the revision of the environmental regulation mechanisms and control in the direction of tightening and bringing the legislation in line with the best international experience is a timely measure.
What will the new edition of the environmental code give?
The current environmental code in Kazakhstan was adopted on January 9, 2007, and its latest revision came into force in December 2019. Unfortunately, the 75 amendments introduced over a 12-year period did not create the necessary conditions for achieving the set goals for regulating the environmental quality and establishing permissible impact on it, ensuring environmental safety, preservation of ecological systems and biological diversity.
The new edition of the Environmental Code of the Republic of Kazakhstan is being developed in accordance with the instructions of N. Nazarbayev, voiced in the message to the people of Kazakhstan “new development opportunities in the conditions of the fourth industrial revolution”, from January 10, 2018.
The justification for the need to reform environmental legislation is an in-depth analysis carried out by experts of the Organization for Economic Cooperation and Development (OECD), where one of the four key issues for successful development of Kazakhstan in the medium term is to increase the effectiveness of environmental regulation and bring the current legislation in line with the OECD approach criteria.
In 2018, the Concept of the new Environmental Code was approved, and on December 24, 2019, the approved version of the code was sent for consideration and adoption to the Parliament of the Republic of Kazakhstan.
As part of this material, it is proposed to dwell on some of the main innovations of environmental legislation that will affect the political and economic processes in the country.
The issue of reorienting environmental revenues
As part of a comprehensive country review, OECD experts drew attention to the application of fees for issuing environmental permits for environmental emissions and penalties for violating environmental limits, as a means of increasing revenue to the treasury, rather than an integrated pollution prevention and control system in terms of environmental permits and compliance requirements. In international practice, funds received for environmental pollution are directed towards its restoration.
At the moment, all revenues (from environmental payments, payments for emissions into the environment, fines, compensation for environmental damage, payments for nature use) are not targeted. Annually, funds in the amount of about 110 billion tenge come to the republican and local budgets.[3] However, due to the lack of focus on environmental payments, in some regions the share of costs for the implementation of environmental protection measures was no more than 10%.[4]
In the discussed edition of the code, norms are set for 100% use by local executive bodies of environmental payments for the implementation of nature protection measures, according to the approved list.
The draft Code also provides for the introduction of one of the oldest principles called “polluter pays”, which is widespread and used throughout the world, especially in OECD countries.
The main message of this principle is to stimulate environmental awareness among nature users by introducing high fees for the negative impact. The introduction of the polluter pays principle implies the prevention or elimination of environmental damage.
If case of environmental damage is established, the authorized body in the field of environmental protection sends a notification to the address of the violator about the need to develop and coordinate with the remediation program. Remediation is a set of measures to eliminate environmental damage through restoration, reproduction of a component of the natural environment that has suffered environmental damage, or, if the environmental damage is completely or partially irreparable, replacing such a component of the natural environment. The restoration of the environmental component is recognized as the achievement of the basic state of the disturbed component of the natural environment.
Environmental impact assessment
In Kazakhstan, environmental permitting systems are currently in place, formed on the basis of a differentiated approach to environmental components that was widespread in the USSR. Such systems, as a rule, are ineffective, often complex and contradictory, insufficiently consider the principle of environmental protection in general and international recommendations, in particular, the experience of the European Union. Reform (optimization) of the permit system, reduction of the administrative burden on business, including in the field of ecology, is carried out by the government of the Republic of Kazakhstan on an ongoing basis.
According to the current version of the code, environmental impact assessment (EIA) is part of the design and estimate documentation and is a fairly formal procedure. Especially in terms of holding public hearings and public participation in decision-making. According to estimates by the Association of Environmental Organizations of Kazakhstan, in 2019, compared to 2018, violations during public hearings increased by 20%.
The draft code provides for the prohibition of the implementation of the intended business activities, including the issuance of environmental permits and the provision of land without conducting an environmental impact assessment first.
In the process of environmental impact assessment, the following types of impacts are subject to accounting: direct impacts, indirect impacts and cumulative impacts – impacts resulting from constantly increasing negative changes in the environment, caused in aggregate by past and existing impacts of anthropogenic or natural, as well as reasonably predictable future impacts that accompany the implementation of the intended activity.
When developing an EIA, the opinion of the public concerned is necessarily taken into account, and public hearings and expert meetings are held, without whose approval it is impossible to implement the project. That is, the role of the public in decision-making has been strengthened.
In the draft of new environmental code, all stages of the EIA, from the submission of the application to completion of the procedure, will be covered on the websites of the authorized ministry, as well as local executive bodies, which include the territory of the proposed activity and the media. The public will be able to follow all stages of the EIA: to express their opinion, to uphold it at the legal level, and also to see if they have taken it into account. Each stage of the EIA will be covered on the above sites, and public hearings will be covered in the mass media. For example, from the moment of submitting an application for an EIA, the public has 30 calendar days to make comments and recommendations on the project of the planned activity, i.e. the public may initially prevent a poor-quality EIA, thereby stopping the negative impact for the environment.
In this vein, one can say that the EIA mechanism has been revised from “total” regulation to the target approach – according to the degree of hazard of the facility. Another innovation is the introduction of post-project analysis, which should ensure the quality of projects under development.
The impact of the Code on enterprises
An important point in the code is the issue of transition of enterprises of Kazakhstan to integrated environmental resolution (IER) using the best available technologies (hereinafter – BAT).
As noted above, the Environmental Code aims to apply the best practices of OECD countries. In Europe, the use of the IER tool and BAT is the most effective mechanism for the comprehensive prevention of environmental pollution, minimization and control of negative anthropogenic impact on the environment. Its implementation began more than 20 years ago and is regulated by the EU Industrial Emissions Directive (IED).
The main criteria are the use of less hazardous substances, low-waste technologies, recycling of substances through waste processing, reduction of resource consumption and negative environmental impact, reduction of emissions, etc.
The Code edition for objects of category 1 (one) defines the requirements for the mandatory transition to IER. With the introduction of BAT, the industry is exempted from environmental charges. These funds can be used to modernize enterprises, and in case of failure, environmental payments will be increased significantly.
According to industry experts, the transition to BAT will be a fairly capital-intensive process, and for 26 companies of four basic sectors of the economy, the amount may amount to 16 trillion tenge. Of course, these figures are difficult to verify, it is possible that there are opposing arguments from large enterprises to maximize the simplification of procedures when discussing the code within the walls of the Parliament of the Republic of Kazakhstan.
To determine the readiness of economic sectors for the transition to BAT from the Ministry of Ecology, Geology and Natural Resources, work has begun on a technological audit of the basic sectors of the economy, based on which the development of BAT Handbooks will begin. At the same time, it is assumed that, considering the transition period, the introduction of BAT can be delayed up to 15 years.
Preserved Area in the Northern Aral Sea Region
Since the middle of the last century, processes on the irrational use of water resources have begun on the territory of Central Asia, which led to the occurrence of the largest environmental disaster of the Aral Sea. In less than 50 years, the process of intense disappearance of the whole sea has begun. Unfortunately, the Aral Sea has lost its purpose as an economic, environmental, and natural site.
The most significant manifestation of the negative impact of water on the state of basin ecosystems is due to a reduction in environmental flow in the lower Syrdarya River, causing degradation of lake and pond systems, natural flood-plain areas, meadows and hayfields.
Currently, surface water pollution in the Kyzylorda region is monitored at 2 water areas in the Syrdarya River and in the Aral Sea, the quality of which is assessed as “moderate pollution level”. The drying up of the Aral Sea is a vivid example of an environmental disaster, where the extent of environmental and economic damage to the Central Asian region has not yet been fully estimated.
Since the beginning of 1960, increasing anthropogenic impacts, i.e. the intensive development of irrigation construction contributed, ultimately, to the emergence of the Aral Sea problem. Thus, by 1987 the total decrease in the water horizon compared to 1960 was 13.31 m. The water surface area over this period decreased from 66.1 thousand km2 to 38.1 thousand km2, and the water volume, respectively, from 1064 to 375 km3.[5]
The shrinking of the Aral Sea has dramatically affected the climate of the region, which has become more continental. The salinity of the Great Aral Sea has sharply increased, which negatively affected the local flora and fauna. Ports were closed and the activities of fishing enterprises were halted.
The draft code provides for a special section regarding the creation of a state protected area in the Northern Aral Sea region, which includes all issues related to the definition of its boundaries, modes of use in the protected area, general environmental requirements, environmental monitoring and much more.
Considering that the state protected area in the Northern Aral Sea region has not yet been created, it is considered advisable to start this work now.
Climate change and low-carbon development
According to the Paris Climate Agreement, low-carbon development is the main model of the economy. The participating countries determine their contributions to the achievement of the declared common goal on an individual basis, and review them once every five years. According to reports, total greenhouse gas emissions in Kazakhstan amounted to 346.15 million tons of CO2 eq.[6]
In the framework of the Paris Agreement, the Republic of Kazakhstan announced the unconditional goal of reducing greenhouse gas emissions for 15% by 2030 compared to the base 1990. In general, from 1990 to 2017, greenhouse gas emissions increased in industrial sectors and waste by 24% and 9%, respectively.In recent years, the climate policy of various states and integration associations has been strengthened. Border countervailing measures, namely carbon border tax, are being introduced. With the help of a border compensation tax, the costs of producing imported and national goods are balanced to maintain the competitiveness of the latter.
German experts cited the effects of the border tax on carbon emissions from the aluminum industry as an example. Thus, aluminum imports from Kazakhstan are up to 25% higher than from China.[7] These examples all indicate that Kazakhstan urgently needs to diversify its energy balance with a focus on the development of renewable energy sources. It should be noted that at the moment the GIZ project is developing a low-carbon development strategy until 2050.
Conclusion
As noted, the environmental situation in Kazakhstan requires urgent measures and the reform of environmental legislation is timely. Considering that the mechanisms and regulatory tools of the code are focused on the experience of OECD countries, and there are great hopes for accelerating the modernization of the industry of the Republic. In my opinion, the most difficult issues in discussing the code within the walls of parliament will be related to counterarguments on the part of the “big” business, regarding the economic feasibility of introducing the best available technologies and finding “suitable” all the rules for tax incentives and economic measures.
In the case of introducing an automatic environmental monitoring system at large-scale entities, on the one hand, the public will receive adequate and timely environmental information, on the other hand, which will improve the responsibility of enterprises in improving the quality of industrial environmental control.
In general, at this stage, a lot of work has been done in the development of the draft environmental code by the authorized body and the working group. Despite the disagreements and concerns regarding certain standards both from industry, environmentalists and other interested parties, the need to reform environmental legislation is clear.
This material has been prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project project. The opinions expressed in the article do not reflect the position of the editorial board or donor.
[1] National report on the state of the environment and on the use of natural resources of the Republic of Kazakhstan for 2018
[2] Statistical digest “Health of the population of the Republic of Kazakhstan and the activities of healthcare organizations in 2016”. Medinform LLP, p. 78.
[3] Report on the amounts of taxes and payments to the budget of enterprises, organizations and citizens. www.kgd.gov.kz
[4] “Information on budget revenues from payment for emissions into the environment and budget expenditures on environmental protection measures” Ministry of Ecology, Geology and Natural Resources.
[5] “The Aral Sea and Water Management Policy in the Central Asian Republics”, authors: Kurbanbaev E. Artykov O. Kurbanbaev S., 2010
[6] National report of the Republic of Kazakhstan on the inventory of anthropogenic emissions from sources and removals by sinks of greenhouse gases, that are not regulated by the Montreal Protocol, for 1990-2017.
[7] Introduction of carbon border tax: A protectionist trade barrier or effective climate policy? Aurora Energy Research Limited