ARVAK Center comment, 22.11.2024(1)
On 11.11.2024, the UN Climate Change Conference COP29 started in the capital of Azerbaijan. Baku, together with relevant UN structures, has thoroughly prepared for this event, trying to ensure that the scale and significance of COP29 will not be inferior to the memorable Paris Environmental Conference of 2015. Azerbaijan’s extreme interest in hosting the international climate summit is also evidenced by the fact that in its time Baku managed to obtain Yerevan’s consent to cede the right to host COP29 in exchange for the release of several dozen Armenian prisoners of war.
According to the COP29official website, the conference is intended to be proactive and “must be an enabling COP, delivering concrete outcomes to translate the pledges made in last year’s historic UAE Consensus into real-world, real-economy results”(2).
On the agenda is the issue of creating an international fund under the UN auspices, the financial resources of which would be distributed among countries to combat global climate change. It is planned that the fund’s resources will amount up to $1 trillion per year, and its main donors should be the developed countries, as well as the states that ensure their growing prosperity through fossil resources and industries associated with an increased risk of environmental pollution(3). The resources of the “Climate” or “Ecology” Fund are planned to be aimed at restoring the natural ecological balance, introducing “ecological technologies” into the industrial sectors of the economy, developing the cluster of renewable energy sources all over the world.
Even before the beginning of autumn it was believed that the conference had every chance of reaching agreements on the Fund, thereby turning the Baku event into one of epochal significance. However, as the opening dates of the conference approached, it became known that the most influential world leaders refused to participate in the summit one after another. This led the authoritative international media to treat both the Baku conference itself and the chances of creating a global “ecological” fund, at least within the announced scale, with skepticism(4).
It is necessary to note that international mass media have already written about the AzR motives to host the UN Climate Conference, that the organization of such a large-scale event with representatives of about 100 countries of the world (from 40 to 70 thousand participants) was necessary for I. Aliyev to “legitimize” the ethnic cleansing of Armenians in Nagorno-Karabakh and to rehabilitate his authority. Apparently, this played a certain role in the plans of the head of AzR, as well as his desire to demonstrate to the international community and the domestic audience that under his leadership Azerbaijan has obtained the image of a “successful” and “dynamically developing country”. But besides the purely propagandistic motives, the Aliyev regime may have plans to use the international climate platform for its immediate purpose: to support Azerbaijan’s oil-dependent economy and to salvage the country’s problematic environmental situation. For Baku, these motives may be no less valuable than the political and image dividends from the large-scale event.
The Azerbaijani economy remains dependent on the oil and gas sector and, consequently, on fluctuations in world prices for hydrocarbon raw materials, despite the authorities’ constant promises to diversify it. Although the plan for a dynamic diversification of the Azerbaijani economy has been declared priority by the government, in reality there has been no tangible progress in this area. Revenues from oil and gas exports continue to form the basis of Azerbaijan’s national income, even taking into account the decline in oil production recorded in the recent years. In turn, the drop in the production of raw materials, due to the peculiarities of the structure of the Azerbaijani economy, slows down the development of non-oil, but closely knotted sectors of the economy. That is why Baku, hoping to stabilize the volume of extracted oil, urges the international companies operating Azerbaijani wells to develop less profitable oil-bearing strata and explore new fields. This, in turn, aggravates the already difficult environmental situation on the Caspian shelf, which has pushed Azerbaijan into the ranks of the region’s outsiders in the index of countries’ environmental efficiency(5). A low environmental rating, in turn, cannot but affect the attractiveness and prospects of Azerbaijan’s future oil and gas programs. Thus, a vicious circle is outlined, the exit from which seems very difficult given the local mentality and the economic management practices in effect in the country.
The Azerbaijani authorities cannot help but see that dependence on hydrocarbons hinders the country’s development, and the extreme bureaucratization of the system does not allow to repeat the successful experience of Indonesia, Malaysia and the UAE, which relatively quickly diversified their economies, and did not place the oil production at the forefront of their development, but only in the position of an industry that insures its stable development. As a result, Azerbaijan lags behind the dynamics of reorganization of the above-mentioned developing and developed (Norway, Singapore) oil-producing economies and is at the level of African countries (Nigeria, Gabon, etc.). Although even among the African raw material exporters there are states that have achieved tangible success in getting rid of oil and gas dependence (for example, Algeria).
Reasonably, the ecological situation in all these countries is directly proportional to the degree of their dependence on the oil and gas sector, as it is evidenced by international sources. Accordingly, the devastating state of the Azerbaijan’s ecology is directly related to the state of its economy, based on the “pumping–selling–budget replenishment” scheme that has been typical to this country for the past 30 years. And yet, the official Baku shows no intention of recognizing and, moreover, demonstrating to the world the direct connection between the regressive economic model and the poor environmental situation in the country. On November 13, 2024, at the “Youth at the Forefront of the Fight against Climate Change” conference organized within the COP29 framework, the Vice President of the Republic of Azerbaijan Mehriban Aliyeva stated that Azerbaijan accounts for only 0.1% of global greenhouse gas emissions, which is allegedly an extremely low indicator of the destructive impact of the Azerbaijani fossil fuel industry on the deterioration of the global climate(6). At the same time, she emphasized that Azerbaijan is facing major problems with a rapid shallowing of rivers and the Caspian Sea, but she preferred not to link this issue with the irrational exploitation of the country’s natural resources using old, minimally environmentally friendly technological methods.
It is noteworthy that recent studies by Azerbaijani specialists point out that the shallowing of the Caspian Sea is allegedly caused mainly by the general increase in temperature in the region, which leads to intensive evaporation of the sea water, formation of vast wind streams in the Central Asian deserts drying up the Caspian Sea waters, as well as a reduction in the volume of water flowing into the Caspian Sea from the Volga River. The factor of a possible impact of oil and gas production on the ecology of the Caspian Sea was not mentioned among the reasons for the impending disaster. It is obvious that in Azerbaijan (as well as in Kazakhstan and Turkmenistan) it is not customary to link environmental problems with the oil-producing industry at the official level. Specialists in Baku tend to consider the construction of “reservoirs and other hydraulic structures on the rivers feeding the sea, preventing water from flowing into the Caspian” to be the only anthropogenic factor contributing to the decrease of the sea water level(7). It is clear that they mean the RF, whose policy on water intake from the Volga River is not liked by the AzR and other Caspian Turkic countries, which do not consider the intensive exploitation of the oil-bearing Caspian shelf to be one of the main reasons for the degradation of the reservoir ecology.
Already during his April trip to Moscow, and then during V. Putin’s August visit to Baku, I. Aliyev raised the issue of reduction of the Volga River water resources flowing into the Caspian Sea with the Russian President, asking him to solve the problem. V. Putin ordered that the governors of the Volga regions of the Russian Federation prepare detailed reports and proposals on the issue. In early October 2024, on the initiative of the Russian side, a joint working group of Russian and Azerbaijani scientists was formed with the purpose of which was studying the problems of shallowing of the Caspian Sea. However, as can be seen from the Russian media, the RF specialists are already inclined to believe that one of the main reasons for the violation of the ecological balance of the Caspian Sea is ill-considered economic management and aggressive methods of exploitation of natural resources by the Caspian countries: “Departments and bodies of the Caspian countries are more developing the extractive branches and the agricultural industry instead of rationally using bioresources, tourism and recreation”(8).
Shallowing of the Caspian is not the only environmental problem of Azerbaijan, caused by the methods of management in this country. The ARVAK Center has already written about how the mining industry of Azerbaijan affects the violation of the ecological balance of this country, pollutes the natural environment and causes deaths and serious illnesses of Azerbaijani citizens. Using connections and support from British-American companies with a dubious reputation, which have stakes in the republic’s gold mines, Baku avoids responsibility for the environmental damage and is unwilling to introduce environmentally friendly but expensive technologies into the mining industry. The situation is similar in the oil production sector, which Baku neither intends to reorganize in the complex structure of its economy, nor seeks to “ecologize” with new technologies.
In his opening speech at the COP29 conference, I. Aliyev said that he had been mercilessly criticized for being the author of the phrase “Oil and gas are a gift from God”. He confirmed that he still believes this and called the attempts to accuse Azerbaijan of polluting the environment by exploiting fossil fuels “hypocritical”. “Oil and gas are gifts from God, like the sun, wind and minerals. Every natural resource, whether it’s oil, gas, wind, sun, gold, silver, copper – they are all natural resources. Countries should not be blamed for having them and should not be blamed for bringing these resources to the market”(9). At the same time, the President of Azerbaijan assured that he is a staunch supporter of the transition to “green energy”, as a proof of which the next day he signed an agreement with Kazakhstan and Uzbekistan on partnership “in the field of development and transmission of green energy”. This refers to the project of laying the so-called “green cable” along the bottom of the Caspian Sea, which in the future should be connected to another cable leading from Azerbaijan and Georgia along the bottom of the Black Sea to Europe (ARVAK center have published about before), thereby providing the Old World with renewable energy sources from the South Caucasus and Central Asia(10). The construction costs of the Uzbekistan–Kazakhstan–Caspian Sea Azerbaijan section have been assumed by the Saudi company ACWA Power.
Remarkably, during his speech at the opening of COP29, Ilham Aliyev distorted the facts: in reality, no one has ever accused Azerbaijan of possessing and selling oil and gas. If Baku was and still is criticized on international platforms, it is only for the fact that the production of hydrocarbons there is carried out in violation of international environmental standards for the exploitation of natural resources. And also, for the fact that the Azerbaijan’s oil revenues have been used to militarize the country, unleash wars and ethnic cleansing, bribe individual politicians and entire governments, and impose authoritarian methods of governing the country and its people. However, it is important for I. Aliyev to show, first of all, the Azerbaijani society, that it is not he personally and the regime he built that are accused, but the country as a whole.
Summarizing the review of open data on the COP29 agenda, as well as analyzing the rhetoric of the Azerbaijani authorities and the comprehensive work they have carried out by them on the sidelines of the conference, it is possible to conclude that Baku is simultaneously working in two directions. On the one hand, Azerbaijan is making it clear that it does not intend to abandon its current policy of oil and gas exploitation and change the structure of its economy. On the other hand, it is simultaneously trying to gain access to international funds and resources aimed at restoring the natural balance and implementing large-scale projects in the field of renewable energy sources (RES). In order to effectively combine these two objectives, Baku must pursue a policy of denying the direct link between its degrading oil production and the catastrophic environmental situation.
Instability of the world hydrocarbon prices, which periodically shakes international market of fossil fuels, is, according to a number of international experts, poses the main problem of the Azerbaijani economy. It undermines the stability of economic growth and reduces its predictability, narrows the field of comfort for international investments in non-oil high-tech sectors. On the other hand, the volume of hydrocarbon production in Azerbaijan has been steadily decreasing since the late 2010s, despite repeated statements by I. Aliyev that the country still has “reserves for a hundred years”. Meanwhile, the question is not how many more years Azerbaijan would be able to pump oil and gas from the Caspian shelf, but that the entire architecture of the global economy is changing, where oil and gas are giving up their leading role in some countries to the new “three pillars” – IT, RES and logistics.
The Azerbaijani leadership can only understand that something has to be done about economic diversification, and it has to be done very quickly. But the fact is that getting rid of dependence on oil and gas is a decades-long activity. In fact, the oil-producing countries that managed to diversify their economies embarked on this path already in the 1990s of the 20th century, i. e. when Baku concluded its “Contract of the Century” (1994) and was just entering the era of the post-Soviet “sovereign oil industry”. This anachronism is already being felt now, as the sunset of the oil era enters its final stage, and the oil and gas market loses its former leverage over geo-economic and, consequently, geopolitical processes in the world.
Another factor that makes Baku to resort to forced diversification is the domestic political situation. Before the “solution” of the Karabakh problem, the Aliyev regime justified the social imbalance and problems of the economic system with the “Armenian occupation” and “wartime”, while now, at least formally, such arguments have lost their relevance. Despite the extreme weakness of political opposition, Azerbaijani society, is increasingly generating discontent with the state of affairs in economy, social sphere and ecology. In its desire for change, it no longer accepts tying up welfare issues with the “Armenian question”. Today, in search of a way out of the current situation, the I. Aliyev regime is trying not to replace, but to compensate for the country’s oil dependence by participating in global logistics and renewable energy projects. To this end, Baku has embarked on the path of integration into the Chinese One Belt, One Road mega-project, having signed the “Declaration on Strategic Partnership” with Beijing in July of this year(11). Within the same logic, aiming at the status of a full-fledged financial and economic beneficiary of continental logistics projects along the North-South axis, AzR has deepened its relations with the RF in recent years, effectively bringing them to an allied level, as evidenced by the signing of the Moscow Treaty on February 22, 2022(12).
On the other hand, I. Aliyev is trying to obtain for Azerbaijan the status of a “green energy” hub, connecting Central Asia with Europe, and also to convince the international community of the prospect of dynamic transformation of this South Caucasian country into a producer and consumer of renewable energy sources, with environmentally friendly industrial and agricultural sectors and unique opportunities for tourism. The Azerbaijani authorities are convinced that these programs, some of which are already being implemented and some of which are still being declared, should, in the medium and long term, soften the consequences of the decline of the oil era in this country. At the same time, as already mentioned, I. Aliyev’s regime does not intend and cannot afford to refuse the further anti-ecological exploitation of the remaining hydrocarbons, since the country’s economy and its methods of financing, in fact, do not leave any opportunities to get rid of the dependence on hydrocarbons. The plans announced by Baku still include increasing gas production volumes(13), as well as continuing the exploration of new oil fields.
Thus, Baku approached the organization of the COP29 conference with a set of contradictory expectations and maximalist demands, trying to turn this event into another universal platform for solving its ambitious tasks. The Azerbaijani “environmental case” raises many questions, and already now the international media do not contain any good reviews either about both the organizer of this event or about the course of the conference as a whole. It would be premature to sum up the results of COP29 before its completion, but international experts and research centers are already stating that the conference was a “failure” from the very beginning, due to the lack of consensus among the world’s major actors on the vision of the planet’s environmental problems and their solutions. Therefore, it seems logical to assume that the location of the “failure” was not chosen by chance. Otherwise, it would have been unlikely to entrust Baku with the successful mission of concluding an epochal agreement on saving the Earth’s Climate and Ecology at a cost of $1 trillion per year, which would have caused universal skepticism.
(1) The original (in Rus.) was posted on our website on 16.08.2024.
(2) COP29 starts tomorrow! 10 Nov, 2024, COP29 Updates | UNFCCC (download date: 12.11.2024).
(3) «Участники СОР 29 обсуждают финансирование защиты климата»: DW (11.11.2024), https://www.dw.com/ru/ucastniki-cop29-v-baku-obsuzdaut-finansirovanie-zasity-klimata/a-70750925\ (download date 12.11.2024).
(4) «Пустая трата времени»: мировые лидеры отказываются от участия в СОР29 в Баку»: Euronews (09.11.2024), https://ru.euronews.com/green/2024/11/09/cop29-world-leaders-refuse-to-take-part-we-explain-why\ (download date: 11.11.2024).
(5) «Рейтинг стран по уровню экологии»: https://nonews.co/directory/lists/countries/ecology\ (download date: 12.11.2024).
(6) «Мехрибан Алиева парирует нападки»: Haggin.az (13.11.2024), https://haqqin.az/news/332739\ (download date: 13.11.2024).
(7)«Проблема обмеления Каспия – взгляд из Азербайджана»: Каспийский вестник (13.11.2024), https://casp-geo.ru/problema-obmeleniya-kaspiya-vzglyad-iz-azerbajdzhana/ (download date: 13.11.2024).
(8) «Москва и Баку совместно займутся проблемой обмеления Каспийского моря»: РИТМ ЕВРАЗИИ (07.11.2024), https://www.ritmeurasia.ru/news–2024-11-06–moskva-i-baku-sovmestno-zajmutsja-problemoj-obmelenija-kaspijskogo-morja-76658\ (download date: 13.11.2024).
(9) «СОР29: Алиев назвал «лицемерной» критику в адрес Баку со стороны Запада»: Радио Свобода (12.11.2024), https://www.svoboda.org/a/cop29-aliev-nazval-litsemernoy-kritiku-v-adres-baku-so-storony-zapada-/33199761.html\ (download date: 13.11.2024).
(10) «Баку, Астана, Ташкент и Эр-Рияд подписали важный документ»: Haqqin.az (13.11.2024), https://haqqin.az/news/332756\ (download date: 13.11.2024).
(11) «Азербайджан и Китай установили стратегическое партнерство»: Anadolu Ajansi (03.07.2024), https://t.ly/I7ONY (download date: 15.11.2024).
(12) «Декларация о союзническом взаимодействии между Российской Федерацией и Азербайджанской Республикой»: Президент России (22.02.2022), http://kremlin.ru/supplement/5777\ (download date: 15.11.2024).
(13) «Азербайджан увеличит добычу газа на 51% к 2030 – Rystad Energy»: Daryo.uz (14.10.2024), https://daryo.uz/ru/2024/10/14/dobycha-gaza-v-azerbaydzhane-mozhet-prevzoyti-dobychu-nefti-prognoz-rystad-energy\ (download date: 15.11.2024).
