Crossroads Asia

How the EU Can Contribute to the Green Transition in Central Asia

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Crossroads Asia | Environment | Central Asia

How the EU Can Contribute to the Green Transition in Central Asia

By focusing its efforts on a few key sectors, the EU can strengthen Central Asia’s resilience, prosperity, and regional cooperation.

How the EU Can Contribute to the Green Transition in Central Asia
Credit: Facebook/Akorda

The green transition poses a significant geopolitical and geoeconomic challenge, giving rise to various scenarios of competition and cooperation that are currently more crucial than ever before. One key challenge that has been highlighted by Russia’s invasion of Ukraine is the importance of securing energy supplies. However, the green transition also holds immense potential for cooperation, particularly between the European Union and Central Asia.

Recent global trends and geopolitical developments, including digitalization, the abrupt withdrawal of U.S. forces from Afghanistan, the rise of an increasingly assertive China, and more recently, revisionist Russia’s invasion of Ukraine have pushed the EU to engage more with Central Asian countries, which Brussels previously kept at a distance. In response, the EU launched the Global Gateway Initiative on Water, Energy, and Climate, showing its commitment to supporting the green transition in Central Asia.

As part of this effort, the EU recently conducted a study on sustainable transport connections with Central Asia. While some skeptics dismiss this effort as mere rebranding, Brussels, as a benign external actor, has the potential to make a positive impact. By promoting integrated water governance, renewable energy, and climate-smart agriculture, the EU can strengthen Central Asia’s resilience, prosperity, and regional cooperation, aligning with not only with the EU’s strategic interests but also the broader U.S. interests in the region.

Integrated Water Governance

The EU plans to focus on enhancing the management of water resources in Central Asia, with the ultimate goal of ensuring sustainable and fair access to water for all stakeholders. The region’s water resources are naturally interconnected through transboundary rivers such as the Amu Darya and Syr Darya, which flow across different countries. After the dissolution of the Soviet Union in 1991, the five independent countries of Central Asia inherited a complex system of trading energy for water. This system involved downstream countries like Uzbekistan, Kazakhstan, and Turkmenistan supplying electricity generated from fossil fuels to upstream countries like Kyrgyzstan and Tajikistan during the cold winter season. In return, the upstream countries would store water in their reservoirs for summer irrigation needs.

However, since the early 1990s, there has been an alarming increase in water consumption, reaching an unsustainable level. This has intensified competition for this invaluable resource, raising concerns about potential water wars in Central Asia.

The crux of the water problem in Central Asia lies not necessarily in a water shortage but in the inadequate usage of available resources. Recent research has revealed that the region has one of the poorest water use efficiencies worldwide. The average water use efficiency is calculated to be $2.5 per cubic meter, which is significantly below the global average of $19.01 per cubic meter.

Given this issue, the EU can play a pivotal role in promoting integrated water management through strengthening institutions and governance in Central Asia. EU-funded technical assistance should assist the countries in the region in creating innovative and comprehensive legal frameworks, policies, and regulations concerning the water-energy nexus, taking into account the competing demands of upstream hydroelectricity generation and downstream agricultural production. To achieve these goals, Brussels should reassess the European Union Water Initiative National Policy Dialogues and support the reformation of the International Fund for the Saving Aral Sea.

Additionally, the EU can assist in establishing efficient monitoring systems, improving data collection and analysis, and enhancing decision-making processes. Successful implementation in these areas could encourage further financial contributions from Team Europe, including EU member states, their implementing agencies, public development banks, the European Investment Bank, and the European Bank for Reconstruction and Development. Overall, these efforts would not only enable the regional countries to effectively manage and allocate their limited water resources sustainably and equitably, thus enhancing water security, but also promote socioeconomic development in the region.

Renewable Energy

The EU intends to promote the development and utilization of renewable energy sources in Central Asia, aiming to reduce the region’s reliance on fossil fuels and enhance energy security. The region, it is important to note, possesses significant untapped potential for renewable energy. Available evidence suggests that small-scale hydropower capacity could range from 275 MW to 30,000 MW, solar PV capacity from 195,000 MW to 3,760,000 MW, wind capacity from 1,500 MW to 354,000 MW, geothermal capacity from 2 MW to 54,000 MW, and bioenergy capacity from 200 MW to 800 MW.

However, despite this potential, the deployment of renewable energy projects in the region has been limited, with only 5,225 MW of small-scale hydropower being installed across five countries. Among all countries, Kazakhstan is at the forefront of renewable energy development, especially in regards to large-scale solar PV (over 800 MW) and wind installations (over 300 MW), where they have actively engaged international private sector companies.

The future, nevertheless, looks promising for renewable energy in Central Asia, except for Turkmenistan. Kazakhstan is a good example of effective policies and implementation. Uzbekistan has also taken a vital step by enacting a renewable energy law and initiating wind and solar projects. Kyrgyzstan and Tajikistan have also established some legislative and regulatory frameworks for renewable energy.

In recent years, Central Asian countries have been facing energy deficits and natural gas shortages. This issue has even affected the world’s largest natural gas producers like Turkmenistan, Uzbekistan, and Kazakhstan. Despite their abundant resources, these countries have struggled to meet their energy demands due to increased domestic consumption and infrastructure shortcomings. Given these challenges, the EU can play a critical role in facilitating the transition to renewable energy in Central Asia, which would meet the increasing energy demand of the region while decarbonizing the energy supply.

To accomplish this, the EU should encourage investments in renewable energy projects, support the implementation of clean energy technologies, and advocate for energy efficiency measures. The European Fund for Sustainable Development Plus (shortly known as EFSD+) can be the primary financial tool for mobilizing investments through the Global Gateway. This innovative instrument could provide guarantees, blending grants, technical assistance, and other forms of support to facilitate investments. By utilizing these resources, the EU would encourage regional solutions that promote climate neutrality and environmental sustainability in Central Asia and contribute to its international commitments, including the 2030 Agenda, Sustainable Development Goals, and the Paris Agreement.

Climate-smart Agriculture

The EU aims to support Central Asian countries in their efforts to mitigate and adapt to climate change. The region is home to a growing population of over 78 million people, which is projected to exceed 85 million by 2030 and 104 million by 2050. This population growth will inevitably lead to increased demand for agricultural products, which will place more strain on limited water resources and may cause domestic and regional instabilities.

Furthermore, the region is already experiencing the impacts of climate change, such as rising temperatures, unpredictable weather patterns, shifting agricultural boundaries, invasive species, and more frequent extreme weather events. According to World Bank studies, if these issues are left unresolved, Central Asia may witness economic damages costing up to 1.3 percent of GDP per year due to droughts and floods. Additionally, these studies project a decline of 30 percent in crop yields by 2050, which could potentially force around 5.1 million people to relocate due to climate-related issues.

Given these daunting challenges, the EU has the potential to have a significant impact on the region by promoting the adoption of climate-smart agricultural policies and practices, assisting in the development and implementation of national action plans, and supporting capacity-building initiatives. Specifically, the EU can help facilitate the implementation of climate-smart inputs, the adoption of agro-ecological practices, the utilization of efficient irrigation technology, and the implementation of precision farming methods. These measures can assist the region in mitigating and adapting to the effects of climate change, improving soil health and biodiversity, and enabling farmers to generate higher incomes while producing high-quality food.

Moreover, agriculture is a major contributor to global greenhouse gas emissions, accounting for 19 percent to 29 percent of the total. Since Central Asia relies heavily on agriculture as a key economic sector, there is a significant opportunity for substantial and long-term reductions in greenhouse gas emissions through climate-smart agriculture. By supporting the adoption of sustainable agricultural practices, the EU can assist the region in making progress toward reducing its emissions while contributing to global efforts to combat climate change.

In conclusion, recent global trends and geopolitical developments in Eurasia have provided the EU with a renewed drive to enhance cross-border cooperation with Central Asian countries. This is particularly evident through the Team Europe initiative, which aims to support the region’s green transition.

Despite facing skepticism from both within and outside the union, the EU, taking into account specific characteristics of the region, can still play a more significant political role. This can be achieved by focusing on key areas such as water governance, renewable energy promotion, and support for climate-smart agriculture. By addressing these issues, the EU can help Central Asian countries strengthen their international stature, attract new investment opportunities, and diversify their partnerships. Ultimately, this will contribute to the region’s resilience and prosperity, and foster greater regional cooperation, in line with the EU’s and the United States’ strategies for Central Asia.

Looking ahead, Central Asian countries, specifically Kazakhstan and Uzbekistan, can play a crucial role in assisting the EU in reducing the risks associated with critical mineral imports required for clean energy technologies. By diversifying away from China, the EU can create an alternative market for these minerals. Additionally, three Central Asian countries – Turkmenistan, Uzbekistan, and Kazakhstan – have the potential to aid the EU in providing an alternative to Russian natural gas for the European market.