Petrostate Azerbaijan is planning to raise at least $500mn to fund green projects as its first step in marshalling climate finance before the UN COP29 Summit it will be hosting in November.
Baku plans to launch the project under the working title ” Climate Investment Fund for Future”, with a contribution by the state oil company of Azerbaijan, Socar. A senior official from COP29 confirmed this. The fund would also seek additional capital from fossil fuel producers.
The amount is a far cry from the $30bn fund that the United Arab Emirates announced at the last COP28, in Dubai. This fund aims to mobilize $250bn in private sector investments for climate action by 2030.
The COP29 officials stated that the Azeri Fund would be a good starting point for fossil-fuel companies to make contributions. They could do this by establishing a mechanism whereby they can donate either lump sums of money or a portion of their revenue.
This move follows the Azeri president Ilham Aliyev’s earlier defense of the country’s oil and gas “given by God” reserves. He argued that fossil fuels will be needed in Europe for many years because the demand for energy is so high.
Azerbaijan is reluctant to discuss the issue of fossil fuels, a concern that has been privately voiced by several diplomats and negotiators. Azerbaijan relies heavily upon oil and gas revenue.
At the COP28, held in Dubai, almost 200 countries committed to a transition “in a fair, orderly, and equitable manner” from fossil fuels to achieve net zero emissions by 2020. However, little progress has been made towards this goal under the UN Climate Process.
Azeri officials are currently discussing whether 50% of the capital should go to developing countries most affected by extreme weather.
Once the concept is complete, we will reach out to those who we believe could contribute. . . “We will ask all countries who produce and use fossils fuels to join the initiative,” said the official. The official added that the fund was not a tax on fossil fuel companies.
The UN climate talks held in Bonn, Germany, in June, midway before the COP29 Summit, ended in recriminations among developed and developing nations over a new climate finance goal.
Last year, the previous $100 billion-a-year goal set in 2009 finally was reached. This was two years late and came after a reclassification.
The EU and US, who are major donors, have asked countries like China and Saudi Arabia that have achieved significant economic growth to increase their contributions in the future. This push was met with fierce opposition on the basis that historical emissions which led to climate change were for the benefit the wealthy economies.
UN climate negotiators are frustrated by the stalemate and the prospect of achieving climate targets for COP29 that will address the effects of global warming.
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