November was a big month for climate action. Attending leaders, diplomatic delegations, or recorded messages — practically every nation had some presence at this month’s United Nations Climate Change Conference in Glasgow. Even North Korea was represented, with its Ambassador to the United Kingdom attending a speech by South Korean President Moon Jae-in.
Leaders across the world agree that it is time for climate action. There is much to lose long-term in failing to take appropriate measures and much to gain if green technology is both economically competitive and energy efficient. However, questions remain for emerging industrial economies attempting to balance decarbonization with development. After all, the West’s rise to economic dominance was fueled by hydrocarbons – and now the developed world refuses to fund hydrocarbon projects even if they address energy poverty in emerging markets.
Some of those questions were addressed at the three-day Astana Club conference in Nur-Sultan, Kazakhstan, where I spoke last week.
Joined by the likes of former UN Secretary-General Ban Ki-moon, former Afghan President Hamid Karzai, and former Turkish President Abdullah Gül – attendees offered perspectives on what Kazakhstan and her Central Asian neighbors achieved over the past 30 years since independence – and how they might successfully navigate the next 30. Achieving a ‘just’ energy transition for those countries still financially dependent on hydrocarbon and other raw materials production was central to this discussion.
Since its independence in late 1991, Kazakhstan, the largest landlocked country on Earth, has translated its rich natural resources into rapid economic growth. It attracted over $300 billion of foreign investment, and over half of it from the U.S. Kazakhstan also possesses immense renewable potential in the form of wind along the vast Kazakh steppe, and to a lesser extent, sun exposure in the south. Kazakhstan has vowed to reach carbon neutrality by 2060 – a bold target for a country which derives the lion’s share of government revenues from hydrocarbons.
Steadily, Kazakhstan’s government has enacted systemic market liberalization reforms that are putting the relatively young country on the right trajectory. In the early nineties, foreign companies invested tens of billions of US dollars in greenfield projects, starting with Tengiz, Kashagan, and Karachaganak, and purchased the majority of state-owned corporations in the oil and gas sector, a move made possible by the privatization of its energy industry. Development of these massive oil fields – led by America’s Chevron CVX +0.3% and Exxon – played a central role in the country’s economic growth, with real wages doubling from 1999 to 2014.