We’ve entered an entirely new era in the globe. The world is not on track to limit global warming to 1.5°C (2.7°F) to pre-industrial levels, as set out in the Paris Agreement. Current national pledges are not sufficient to reduce harmful greenhouse gas (GHG) emissions to avoid a global climate disaster. Many national efforts to address climate change tend to focus narrowly on specific sectors, address these in a siloed manner, lack ambition, and fail to fully engage non-state actors and local governments responsible for significant emissions. Cities consume two-thirds of the world’s energy and account for 70 percent of global GHG emissions. It is estimated that by 2030, cities will be expanding into key global disaster zones for biodiversity, severely affecting natural ecosystems and their critical role for cities. 

Cities, being at the forefront of climate impacts, are experiencing a convergence of challenges due to climate change and rapid and unplanned urbanization. Rising global temperatures have caused extreme weather events including flash floods, storms, droughts, and heatwaves in cities. All of these have impacts on urban services, housing, infrastructure, livelihoods, urban ecosystems, cultural practices, as well as the health and well-being of residents. Rising food and energy prices exacerbate these impacts, with the most vulnerable being hit the hardest. Faced with escalating extreme weather events, urban centers worldwide grapple with the dual task of preparing for inevitable climate impacts and actively seeking sustainable solutions. However, two significant obstacles remain: collaboration with national governments and access to financial resources to deliver their commitments. Despite their crucial role, cities, towns and states often find themselves without the necessary financial resources to implement effective climate action. 

Today, more than three billion people live in hotspots that are highly vulnerable to climate change and more than one billion urban dwellers live in informal settlements. Climate change impacts both increase urban populations due to climate-driven displacement and migration and aggravate the underlying socio-economic challenges that come with urbanization. At the same time, cities are a key contributor to climate change, as urban activities are major sources of greenhouse gas emissions.

In 2020, Kazakhstan announced its commitment to reaching carbon neutrality by 2060. Kazakhstan targets to achieve a 25 percent reduction in GHG emissions by the conclusion of 2030 compared to the 1990 base year in its updated Nationally Determined Contribution (NDC) and seeks to facilitate access to an international technology transfer mechanism, encourage financing for climate investments and involvement in global research endeavors, foster the advancement of promising low-carbon technologies, and promote initiatives to cultivate local expertise. The vast majority of CO₂ emissions in the energy sector come from the burning of fossil fuels such as coal, oil and natural gas for power generation or to fuel vehicles and machines. As part of its decarbonization strategy, utility tariffs will be projected closer to cost recovery, while the state will provide vulnerable families with targeted assistance. This will help the country remain on track to meet its objectives on the climate front by incentivizing private investment in renewables and energy-efficient technologies. 

Fulfilling the challenges of green economic transition and energy efficiency hinges directly on the effective participation of small and medium-sized enterprises (SMEs). To this end, the government has committed to reducing regulatory barriers for SMEs, enhancing the effectiveness of budgetary spending and existing SME support mechanisms, and developing high-quality infrastructure as well as monitoring, reporting, and verification processes for energy-efficiency data. The government pledged to raise the proportion of GDP contributed by SMEs from 33.5 percent to 40 percent by the decade's conclusion. SMEs, particularly energy service companies (ESCOs) and providers/installers of energy-efficient equipment and controls, undertake numerous projects annually in lighting, heating, and industrial sectors nationwide. However, the complete market capacity of SMEs in energy efficiency, valued in the hundreds of millions of dollars per annum, remains untapped, leading to missed economic prospects and unrealized reductions in greenhouse gas emissions. Moreover, Kazakhstan adopted amendments to the law on renewable energy very recently, allowing citizens to install solar panels up to 200 kilowatts (kW) in their homes, in which their consumption is estimated no more than 15-20 kW and can sell the surplus energy to the national grid through the local energy supply organization. It is estimated that the share of electricity generated by renewable energy sources by 2030 will rise from 5 percent to 15 percent by 2030. 

In Kazakhstan, enabling "green" investments is essential for reaching the ambitious target of achieving carbon neutrality by 2060. The Ministry of National Economy of the Republic of Kazakhstan projects that this transition will demand US$610 billion in investment over the next four decades. Substantial public funding will be necessary to establish regulatory and institutional structures and develop financial and physical infrastructures. The private sector is anticipated to contribute more than 96 percent of the investments.