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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What to do about monetary damages for industrial air pollutants?

Over the past few decades, Kazakhstan has been imposing compensation (monetary damages) for environmental damage (or damages to the environment) via the judicial system. These damages are allegedly caused by emissions into the air from stationary sources above the emission limit value. The chapter compares Kazakhstan’s underlying concepts and practices for liability provisions in case of environmental damage with the experience of OECD member countries. It reviews the legal framework, the assessment of environmental damage and the links between environmental liability and financial security. It then provides recommendations to streamline the system of environmental liability, thereby implementing more amply and effectively the Polluter-Pays Principle.

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