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Azerbaijan attaches significance to advancing green finance through diverse funding sources

6 May 2024 16:26 (UTC+04:00)
Azerbaijan attaches significance to advancing green finance through diverse funding sources

Nazrin Abdul, AZERNEWS

In an unprecedented move this November, Azerbaijan is set to take centre stage as the host of the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29), marking the largest international event of its kind.

Renowned as a leading state in the South Caucasus region, Azerbaijan has carved out a reputation as a steadfast and reliable partner within the modern international arena. Acting as a pivotal economic, political, and humanitarian hub, the nation stands poised to address one of the most pressing challenges of our time: climate change.

The reality of climate change confronts every nation on Earth, demanding collective action and shared responsibility from the international community. The widespread reliance on fossil fuels has triggered a surge in greenhouse gas emissions, propelling global temperatures to unprecedented levels and ushering in a new era of erratic weather patterns and escalating natural disasters.

The significance of COP29 transcends mere diplomatic engagements; it embodies a profound obligation shared by nations worldwide. Central to this obligation is the imperative need for financial mobilisation to combat climate change effectively. Throughout protracted negotiations, countries have consistently underscored the necessity for robust financial support spanning climate mitigation, adaptation, and resilience efforts. Pledges to establish a $100 billion fund have been reiterated by both developed and developing nations, setting the stage for COP29 to catalyse tangible progress in fulfilling these commitments.

Addressing the pivotal role of finance in climate action, President Ilham Aliyev emphasised during the opening ceremony of the 6th World Forum on Intercultural Dialogue the critical importance of financial resources in addressing climate-related challenges. Indeed, financing mechanisms lie at the heart of COP29's agenda, serving as a linchpin for translating climate aspirations into concrete realities.

In a comment for Azernews on the issue, Ayaz Museyibov, advisor to the executive director of the Centre for Analysis and Communication of Economic Reforms, advocates for a multifaceted approach encompassing innovative financial instruments and inclusive partnerships.

Museyibov underscores the imperative of harnessing traditional development models in tandem with innovative strategies to foster sustainable progress and catalyse transformative change. First of all, Ayaz Musayibov noted that in order to prevent the negative consequences of climate change, financial resources should be attracted from all possible sources.

"Because the fight against climate change is important not only from the social, health, and environmental aspects, but also from the economic point of view, and we understand how much economic damage climate change can cause on a global scale. Such a mechanism can be established with the inclusive partnership of states, international organisations, industrial sectors, individuals, and, in short, all stakeholders."

Museyibov also emphasised the importance of applying innovative financial mechanisms in this field.

"In general, the strategic development framework of any field and direction should include a two-dimensional approach.
The first of these is traditional development models, that is, the use of traditional methods (infrastructure, regulation, communication, etc.) to achieve the goals we want to achieve, and the second is the continuous application of innovations and new methods and approaches.

According to the expert, it is in this form that a continuous development cycle can be established and all "enablers" can be set in motion.

"Here, it can be more useful to approach the issue of innovative finance from this perspective. This means introducing new financial models to support solutions that need to be solved on a global scale. For example, incentives and attractive programmes can be applied to companies investing in areas of strategic importance from the point of view of climate issues. The main goal is to use the financial resources in the most effective way possible to meet the climate commitments."

Embracing a holistic vision of climate finance, Museyibov advocates for incentivizing investments in climate-resilient solutions and leveraging the transformative potential of Fourth Industrial Revolution technologies to preemptively mitigate climate-related risks. By embracing "climate-friendly" approaches, nations can avert costly environmental repercussions and chart a course towards sustainable development.

"The issue of climate-related prevention and damage reduction is also important here. That is, we have to decide on a global scale whether we should build a production or processing area with an investment of 100 million manats, and then spend a few hundred million funds to combat the consequences it causes to the climate, or whether we should also apply "climate-friendly" approaches and technologies of the Fourth Industrial Revolution. We must prevent such costs by doing so."

Against this backdrop, Azerbaijan emerges as a beacon of environmental stewardship, spearheading initiatives to harness renewable energy sources and transition towards a cleaner, greener future. With ambitious targets to slash greenhouse gas emissions by 35% by 2030 and 40% by 2050 compared to 1990 levels, Azerbaijan's hosting of COP29 signifies a pivotal milestone in its trajectory towards a sustainable, resilient, and inclusive green economy.

In essence, COP29 not only symbolises Azerbaijan's commitment to global climate action but also embodies a testament to the nation's unwavering dedication to shaping a more equitable, prosperous, and sustainable world for generations to come.

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