The EDB: Central Asia is particularly vulnerable to physical climate risks, primarily due to water scarcity
Almaty, 2 November 2023. By 2050, the available water resources in the Syr Darya and Amu Darya basins – the region’s two largest water sources situated in southern Kazakhstan and along Uzbekistan’s southern border with Turkmenistan – could decrease by 10% to 15%. Water shortages inevitably impact the region’s agricultural sector, which relies on water as a critical factor in food production. The reduction in wheat yields in seven oblasts of Kazakhstan could result in direct economic losses exceeding US $1.2 billion by 2030. Conrad Albrecht, Managing Director and Head of the Directorate of Sustainability at the Eurasian Development Bank (EDB), highlighted these concerns during the Seventh North and Central Asia Multistakeholder Forum on the Implementation of the SDGs in Almaty.
“Kazakhstan, being the only Eurasian nation to have implemented a carbon pricing system, faces the additional challenge of a potential carbon tax amounting to US $250 million. Most economies in the region heavily rely on carbon-intensive industries, necessitating a transition towards more sustainable production methods,” he said.
He also pointed out that the region’s carbon dioxide (CO2) emissions significantly exceed its contribution to the global economy in terms of both GDP and population. However, countries such as Armenia, the Kyrgyz Republic, Tajikistan and Uzbekistan have a share of global CO2 emissions lower than their share of the world’s population, indicating that the region’s economies are critically carbon intensive.
The energy sector is the largest source of greenhouse gas (GHG) emissions in the region, accounting for 42% of total emissions, followed by industry, transportation, construction and agriculture. These five sectors collectively contribute to 90% of GHG emissions in the region.
“All countries in the Eurasian region are taking climate change extremely seriously, acknowledge their direct contribution to the global agenda and are ready to make ambitious commitments to decarbonisation. Nevertheless, Central Asian countries still require substantial support from multilateral development banks – while climate finance to the region is increasing, it remains significantly smaller compared to other low- and middle-income countries,” he stressed.
Multilateral development banks provide valuable assistance and have special programmes focused on Central Asia and there is substantial untapped potential for synergies among these institutions.
“Institutional investors should focus not only on new capital flows and new funding sources, which are commonly discussed, but I would emphasise the issue of redirecting existing capital towards revised procurement criteria aligned with nationally determined contributions (NDCs) and the Paris Agreement. It is also crucial to enhance the alignment and coordination among these institutions and with the private sector, which provides climate finance solutions,” added Conrad Albrecht.
Despite the serious challenges, Central Asian countries are prepared to make ambitious decarbonisation commitments and mobilise international funding to achieve their climate goals.
The EDB is a development bank with significant expertise in the region and a cumulative green project portfolio exceeding US $600 million, with significant climate impacts.
The Bank intends to expand this portfolio by implementing several major projects including the Eurasian Transport Network, the Eurasian Commodity Distribution Network and the Central Asian Water and Energy Complex, among others, as well as by exploring opportunities for cross-border investments among its Central Asian member countries.
The Seventh North and Central Asia Multistakeholder Forum on the Implementation of the Sustainable Development Goals was hosted by the Subregional Office for North and Central Asia of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), bringing together many participants, organisations and international partners.
Additional Information:
The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries. For more than 17 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals US $7 billion. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles.
Eurasian Development Bank
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