Azernews.Az

Qabil Ashirov

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In a move to support Azerbaijan’s transition toward a greener economy, the World Bank has recommended the introduction of a carbon tax as the first step in the country’s carbon pricing strategy, Azernews reports.

Speaking at a seminar titled “Carbon Pricing and International Carbon Markets”, held in collaboration with the Azerbaijani government, Yasemin Oruc, head of the World Bank’s office in Azerbaijan, outlined a series of policy suggestions aimed at guiding the country’s shift to carbon pricing mechanisms.

According to Oruc, if the Azerbaijani government decides to adopt carbon pricing tools, the most effective starting point would be the introduction of a carbon tax based on the carbon content of fuel types. She emphasized that such a tax should be applied at the point where fuel enters the economy—either when it is imported or produced domestically.

“This approach can be implemented through the existing excise system,” Oruc noted, adding that in its initial phase, the tax would cover approximately 60% of Azerbaijan’s total carbon emissions.

Looking ahead, Oruc stated that Azerbaijan could eventually expand the scope of the carbon tax by transitioning to an emissions trading system (ETS). One of the primary advantages of this model, she said, is the ability to channel carbon tax revenues into direct cash transfers for low-income households, helping them cope with the effects of rising prices.

Experts have welcomed the proposal, describing it as a balanced strategy that addresses both environmental concerns and social equity. By combining carbon reduction efforts with financial protections for vulnerable populations, the model offers a dual benefit: mitigating climate change while ensuring economic fairness.