Kazakh emissions trading scheme: legal implications for land use

Kazakhstan ratified the Kyoto Protocol on 26 March 2009. As part of measures aimed at implementing the Kyoto Protocol, Kazakhstan is preparing for launching its first domestic emissions trading scheme (ETS). National cap-and-trade system is expected to be a key climate-policy instrument for reaching general commitments of the country to mitigate climate change. Emitters which are subject to the Kazakh emissions trading scheme are allocated with emission caps, which can be traded within national cap-and-trade scheme. Such emitters can reduce their own emissions and then sell excess of cap allowances on the market. If emitting more than allowed, they can buy allowances if any available, otherwise are obliged to pay strict fines defined by the government. Domestic sectors, which are subject to Kazakh emissions trading scheme, were chosen with the intention to regulate key sectors and categories by one market-based tool. Kazakh ETS will cover companies emitting from twenty thousand tons of carbon dioxide equivalent per year. In the time when Kazakhstan is actively investigating other options for reducing emissions to comply with its present voluntary commitments and future commitments under the Kyoto Protocol, establishment of a domestic emissions trading scheme may be a good option. That is why Kazakh ETS is taking serious attention of the government. In this way, the government intends to raise the interest of operators to move gradually to energy efficiency and low-carbon policy by their own initiatives. GHG emissions can be reduced by several means such as establishing renewables,installing energy-saving technologies, and such others; however, GHGs can also be reduced through increasing GHG absorbing measures, provided within the land use, landuse change and forestry (LULUCF) sector of the Kyoto Protocol. Kazakh emissions trading scheme does not provide trading of carbon units in the LULUCF sector directly. Planting new forests to absorb carbon dioxide in the atmosphere is one viable option to employ forests to curb climate change. The idea of planting carbon offsets is now being implemented worldwide under the Kyoto Protocol and beyond it. There are three major frameworks for LULUCF projects. First, avoiding emissions by conservation of existing carbon stocks, second, increasing carbon storage by sequestration, and third, substituting carbon for fossil fuel and energy intensive products. The aim of the study is to analyze how the LULUCF sector can be employed under current Kazakh emissions trading scheme.