Afforestation in Central Asia: An Analysis of Kazakhstan’s Potential as a Carbon Market

BeZero Carbon
Apr 20 · 4 min read

BeZero’s Political Risk Intern, Henry Hunt, discusses changes to the carbon market in Kazakhstan and the role of Nature-Based Solutions in delivering carbon neutrality.

Nature-based Solutions (NbS) employ the sustainable use of the ecosystem services as a tool to absorb CO₂ emissions. NbS can be utilized in many forms, but “revegetation” is one of the more straightforward and quantifiable means of carbon sequestration.

BeZero is a registered broker and project originator for the UK Woodland Carbon Code. We also help initiate, manage, and monetize projects internationally, and we’ve been assessing the opportunities in countries with huge land masses, such as Kazakhstan. The suitable ecological profile, federal-level carbon neutrality pledge, and pre-existing emissions trading scheme make Kazakhstan a fitting locale for forest projects and carbon credit management (Sarsembayeva 2015).

While Kazakhstan’s potential as a viable carbon market is strong, operations in the country are not without risks. This blog presents an overview of Kazakhstan’s economic and legislative profile for investors, as well as identify specific risk factors that could inhibit the ability of NbS to be carried out effectively.

Kazakhstan’s Profile as a Carbon Market

The Kazakh economy is largely dependent upon the profitability of its oil and gas sectors. This may make it seem an unlikely participant in the global transition towards climate action. But, with the ousting of its longtime head of state, Nursultan Nazarbayev, in 2019, the reorientation of Kazakhstan’s political order has made way for economic shifts intended to diversify and modernize the state’s export driven economy.

Kazakh Exports. Acquired from Simoes et al via a CC-BY-SA-3.0 license.

This change in emphasis was made most apparent in the aftermath of the 2019 election, when recently inaugurated President Kassym Tokayev pledged to achieve national carbon neutrality by 2060 (Satubaldina 2020).

Kazakh’s objective will be met through a combination of strategies; most notably the gradual reduction of fossil fuel exports, the construction of Central Asia’s first CO₂ emissions trading system, and the planting of two billion trees.

While the Kazakh government’s strategy of phasing out oil and gas exports, consequently reducing direct and indirect emissions, would have a major impact on their emissions profile, it has yet to be effectively implemented.

Though Kazakhstan’s fossil fuel production has dipped due to the COVID-19 pandemic, it is predicted that this metric will revert to pre-pandemic levels by 2025. The absence of significant sectoral downsizing in the oil and gas industry has forced the Kazakh government to prioritize their burgeoning emissions trading scheme by investing heavily in the creation of carbon sinks as their primary means of emissions reduction (Climate Action Tracker).

Kazakhstan’s vision of afforesting portions of its vast farmlands will not only help neutralize their emissions by sequestering CO₂, but it will also improve soil quality and limit desertification, creating further demand for the initiation of these operations. These afforestation efforts will occur exclusively on plots of farmland that once were forested, and due to poor soil quality resulting from over cultivation, have since been disaffected by desertification processes (Meshkov et al. 2012).

The Kazakh government’s ability to successfully execute their afforestation plans will be highly dependent upon their capacity to, directly or indirectly, monetize CO₂ sequestration in the form of carbon credits. The potential value of these credits could prompt further foreign investment in these projects, both financing their domestic agenda and acting as an example of how carbon finance can be utilized in the developing world in its push towards carbon neutrality.

Kazakh Eco-zones. Acquired via World Wildlife Fund.

Risks in the Kazakh Market

An understanding of the various risk factors associated with operating in Kazakhstan is of critical importance to any company valuing and managing the sale of carbon credits in this market.

The quality of forestry schemes, which are largely funded by the profits from the sale of their carbon credits, are highly susceptible to a set of local risk factors which can threaten viability.

Due to the Kazakh government’s recent decision to ban the sale of farmland to foreign purchasers (Reuters 2021), and because over 74% of Kazakhstan’s total territory is ‘designated for agriculture’, international businesses are now largely unable to directly own the land on which these reforestation projects occur (Satubaldina 2019). This legislation requires that international business ventures operate exclusively as Natural Capital advisory services working to support land owners in their sale of carbon credits.

While Kazakh-specific legislation hinders the ability of foreign operators to enter the market, other variables jeopardize the permanence of forestry projects even after they have been established.

Risks such as general corruption, illegal logging, and breaches of the Paris Agreement’s Article 6 (adjusting emission values in accordance with international trades) when observed within the context of BeZero’s Carbon Offset Framework, erode the potential quality of credits; as these risks have the potential to transform a once prospering plot of biodiverse afforested land into a compromised space in which corrupt institutions allow natural exploitation to occur. Through BeZero’s exclusive Carbon Offset Framework, the risk factors associated with each respective afforestation project will be rated, allowing plot owners to mitigate damages, maximize profits, and ensure the legitimacy of their carbon sequestration objectives.

Written by Henry Hunt, Political Risk Intern currently studying Geopolitics, Territory, & Security MA at King’s College London.


Climate Action Tracker (2021)

Meshkov et al (2012)

Reuters Staff (2021)

Sarsembayeva, M. (2015)

Satubaldina, A. (2019)

Satubaldina, A. (2020)

Nunez et al (2020)

‘Kazakh Exports’

‘Kazakh Eco-zones’

BeZero Carbon

Perspectives & developments within the voluntary carbon offset market

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