New CTTN Report Highlights Challenges and Opportunities for Emission Trading Mechanisms in CAREC Nations

A CTTN-funded study reveals critical implementation barriers for emission trading systems (ETS) in Central Asia’s developing economies. Dr. Razi and Dr. Ramzan’s analysis underscores Kazakhstan and China’s contrasting approaches, with Kazakhstan’s 7% emission reduction target lagging behind regional decarbonization needs while China’s national ETS offers transferable lessons.

EU carbon border measures pose acute challenges for CAREC’s export-driven industries, particularly impacting Kazakhstan’s metallurgical sector where production costs could rise 12-18%. The report cautions against direct replication of Western carbon pricing models, advocating instead for phased market mechanisms that balance climate targets with energy security priorities.

Essential reforms center on three areas: sector-specific carbon pricing frameworks, cross-border certification protocols, and modernized emissions monitoring infrastructure. These measures could help avoid 45-60 million tonnes of annual CO2 emissions by 2030 while mitigating trade risks from evolving carbon regulations.

The findings provide actionable insights for policymakers navigating the region’s unique post-Soviet industrial legacy and growing renewable energy ambitions. With CAREC economies accounting for 9% of Eurasia’s industrial emissions, effective ETS implementation remains crucial for aligning economic growth with global climate commitments.