Publication: Azerbaijan : Towards Green Growth - Issues Note
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Date
2022-09
ISSN
Published
2022-09
Author(s)
World Bank
Abstract
The welfare and economic growth of
Azerbaijan’s development trajectory based on fossil fuel
extraction has come at the expense of the environment, other
non-oil industries, and human capital growth. Due to its
lack of economic diversification, the country is highly
vulnerable to transition risks, volatility of fossil fuel
markets, and climate change. This note, produced in support
of Azerbaijan’s ambition for green growth, identifies how
increased climate action and greening of a number of sectors
have the potential to spur diversification of Azerbaijan’s
economy, contribute to addressing sector- and
country-specific environmental challenges and goals, reduce
greenhouse (GHG) emissions, address the identified physical
and transitional climate risks and vulnerabilities, and
strengthen long-term climate resilience of the country.
Investments in resource efficiency, sustainable
intensification of agriculture, better land use and urban
planning, water and waste management, switching to
cost-effective renewable energy, and research on low-carbon
hydrogen and Caspian maritime space are the green measures
that can have an immediate positive impact on Azerbaijan’s
economy and the environment. The first stage in identifying
areas for wealth development will be a comprehensive green
growth and asset diversification strategy, informed by
detailed sectoral analysis and supported by capable
institutions. Once mobilized by public sector interventions
through policies to enable and incentivize green investments
and green finance instruments, private enterprises will take
the lead in relocating capital to green supply chains,
creating jobs and building human capital while increasing
the focus on innovation and efficiency. Cutting system leak
emissions in the oil and gas industry could contribute
significantly to reducing GHG emissions at lower costs.
Enhancing the environmental performance of enterprises will
be made possible by promoting eco-efficient policies and
investments in cleaner production and technologies.
Beginning now and leveraging this transition to green growth
and diversification through the use of public resources and
revenues from fossil fuel exports, Azerbaijan can mitigate
certain short-term difficulties and promote long-term
sustainable growth to ensuring a cleaner environment and
economic prosperity.
Citation
“World Bank. 2022. Azerbaijan : Towards Green Growth - Issues Note. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/38073 License: CC BY 3.0 IGO.”