Climate finance has become a pressing global issue, with funding increasing significantly over recent decades. Most mitigation funding targets the energy and transportation sectors, the primary sources of greenhouse gas emissions. On the other hand, adaptation financing is directed towards infrastructure projects in water resources, agriculture, and land use—sectors that are highly vulnerable to climate impacts. However, there is a striking disparity: mitigation efforts receive over 17 times more funding than adaptation projects.

This research is part of the UNDP programme, funded by the European Union (EU), which is establishing a regional Sustainable Development Goals (SDG) Platform for Central Asia. Serving as a knowledge-sharing hub, it monitors sustainable development progress in the region and accelerates such progress by spotlighting areas needing greater attention.

Kazakhstan's environmental challenges

Kazakhstan faces several critical environmental challenges, including climate change, ozone depletion, biodiversity loss, desertification, water and air pollution, and waste accumulation. Desertification is particularly severe, affecting 70 percent of the country's territory due to its natural characteristics. These challenges highlight the urgent need for effective climate financing strategies.

Trends in climate finance in Kazakhstan

Kazakhstan's climate financing at the state level is implemented through budget allocations for environmental and climate-related programmes and activities. The country's climate budget is divided into two main categories.

The general climate budget encompasses budget expenditures on programmes that directly and indirectly impact climate change and the environment. It acts as a ceiling for climate-related spending.

A strict climate budget includes expenditures directly contributing to climate change responses, representing the floor of climate-related spending.

General climate budget and the SDGs

The general climate budget in Kazakhstan addresses several SDGs:

• SDG 2. End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.

• SDG 6. Ensure availability and sustainable management of water and sanitation for all.

• SDG 7. Ensure access to affordable, reliable, sustainable, and modern energy for all.

• SDG 8. Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

• SDG 9. Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.

• SDG 11. Make cities and human settlements inclusive, safe, resilient, and sustainable.

• SDG 12. Ensure sustainable consumption and production patterns.

• SDG 13. Take urgent action to combat climate change and its impacts.

• SDG 15. Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and biodiversity loss.

From 2019 to 2021, Kazakhstan's total climate budget increased by 1.25 times, reaching 2,396 billion tenge in 2021, accounting for 12.1 percent of the state budget.

Allocation of climate funds

SDG 9 (Industrialization, innovation, and infrastructure) received the largest share of the overall climate budget, with 77 percent or 1,741 billion tenge over three years. Conversely, SDGs related to decent work, clean energy, responsible consumption, and production received minimal funding, ranging from 0 to 1 percent of the state budget.

For SDG 13

The overall climate budget under SDG 13 focuses on three main tasks:

• Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries (13.1).

• Integrate climate change measures into national policies, strategies, and planning (13.2).

• Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning (13.3).

In Kazakhstan, funding primarily supported tasks 13.1 and 13.2, with 99 percent allocated to policy integration.

The need for a strict climate budget

Preliminary analysis indicates that 13 percent of Kazakhstan's state budget is allocated to climate-related issues, either directly or indirectly. However, the budget system and expenditure planning must focus entirely on climate change. Many budget programmes are based on sectoral needs without considering future climate impacts. For instance, infrastructure projects like schools, kindergartens, and hospitals often need more climate resilience features such as energy efficiency and flood resilience.

Where to go in the future?

Given Kazakhstan's commitments under the Paris Climate Agreement and the need to decarbonize the economy, it is crucial to assess budget expenditures to identify sectors with positive and negative environmental impacts. This assessment will help develop a strict climate budget focusing on direct climate action expenditures, ensuring a more effective and targeted approach to addressing climate change.

By prioritizing climate financing and aligning it with the SDGs, Kazakhstan can better tackle its environmental challenges and foster a more resilient and sustainable future.

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This publication was funded by the EU. Its contents are the sole responsibility of UNDP and do not necessarily reflect the views of the EU.