Addressing Industrial Air Pollution in Kazakhstan

Reforming Environmental Payments Policy Guidelines

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Kazakhstan has recorded impressive economic growth rates since its independence, driven mainly by export of commodities and high rate of energy use. These rates are not sustainable and are generating significant air pollution, in particular from industrial stationary sources. This is putting at risk the country’s development ambitions to become one of the top global economies by 2050 and converge towards OECD living standards. Building on OECD previous analysis, this publication shows that Kazakhstan’s environmental payments (environmentally related taxes, non-compliance penalties and compensation for damage regulation) for industrial air pollutants, as currently applied, impede energy efficiency and pollution abatement with heavy-handed non-compliance responses and focus on rising revenues. They also add to the cost of doing businesses in the country with limited environmental benefit. In the spirit of the Polluter-Pays Principle, much more reforms of regulation of environmental payments are needed. This report provides guidelines for reform drawing from air pollution regulations in OECD member countries and the results of the analysis of the system in Kazakhstan carried out by the OECD in close co-operation with the Government of Kazakhstan.

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How to charge taxes for air pollutants from stationary sources?

Kazakhstan’s industrial operators are subject to pollution charges for their emissions below and above their relevant emission limit values (ELV). This is part of a quite unusual system of “paying to pollute”, which originated before 1991. The pattern continues in various forms in the environmental regulatory framework of many other post-Soviet states.Considering this command-and-control heritage, this chapter explores how Kazakhstan can incorporate elements of environmental policies from OECD member countries. Specifically, it asks what incentives can hasten the transition towards a scheme promoting the adoption of best available techniques to reduce pollution, in line with the Polluter-Pays Principle.

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