Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability

April 24, 2024

Preview Citation

Format: Chicago

Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability, (USA: International Monetary Fund, 2024) accessed November 21, 2024

Summary

Kazakhstan is vulnerable to transition risk due to the importance of its energy- and emissions-intensive sectors. Domestic and global climate policies would negatively affect Kazakhstan’s economy, its firms, industries, and banks, with heterogenous impacts across industries and banks. Using both micro and macro modeling approaches, the climate risk analysis suggests Kazakhstani banks are exposed to significant transition risk from domestic and, more importantly, global climate policies. The risk is especially higher for carbon intensive sectors, such as fossil fuel extraction, refining, and electricity generation. Banks with large exposure to emissions-intensive sectors experience up to 30 percent additional losses under a disorderly 1.5°C scenario over a 5-to-7-year horizon, compared to the baseline. Banks with a small share of portfolio with emissions-intensives sectors may still experience losses, as climate change mitigation actions affect the economy at large and the financial health of individual consumers, businesses, and industries.

Subject: Climate change, Climate policy, Environment, International organization, Monetary policy

Keywords: Climate change, Climate policy, Climate-related TRANSITION, Cost of goods sold, FSAP finding, Global, IMF-World Bank Financial Sector Assessment Program, Kazakhstan's greenhouse gas emissions

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2024/096
Stock No:

1KAZEA2024006
ISBN:

9798400273629
ISSN:

1934-7685

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