Econometric model for assessing the effectiveness of system-forming directions for achieving carbon neutrality

Abstract

The purpose of the study is to develop and test a comprehensive econometric model for quantitative assessment of the effectiveness of system-forming directions of state policy for achieving carbon neutrality in the Republic of Kazakhstan, taking into account regional specifics and sectoral structure of the economy. The research methodology is based on the application of panel data analysis methods, including fixed and random effects models, dynamic panel models, Oaxaca-Blinder decomposition for factor contribution assessment, and spatial econometric methods to account for regional spillover effects. The empirical base includes panel data for 17 regions of Kazakhstan for the period 2010-2024. For the first time for Kazakhstan conditions, a multi-level econometric model has been developed that integrates macroeconomic, sectoral, and regional decarbonization factors. An original composite Regional Carbon Neutrality Readiness Index is proposed, taking into account 28 indicators. The results showed that a 1% increase in energy efficiency reduces the carbon intensity of GDP by 0.47%, a 1% development of renewable energy reduces emissions by 0.18%, and an increase in the carbon price by 10 USD/ton CO₂ leads to a 2.3% reduction in emissions. Conclusion - significant regional differences in emission elasticity by decarbonization factors were identified. Under the optimal scenario, carbon neutrality can be achieved by 2058, subject to annual investments of 2.7% of GDP, which aligns with the Roadmap estimates. Practical value: the model can serve as a basis for adjusting the Strategy for Achieving Carbon Neutrality of the Republic of Kazakhstan by 2060, as well as for developing regional strategies for low-carbon development.