As the host country of the COP29 climate conference, authoritarian Azerbaijan wants to improve its international reputation and secure financing for the modernization of its energy sector. How should democratic states and international civil society approach the next COP?
The article was machine-translated from German and corrected for readability.
Azerbaijan has made mainly negative international headlines in recent years. As could be seen last week in the German television movie and a documentary of the same name, “Am Abgrund”, it bribed members of the Parliamentary Assembly of the Council of Europe, including Members of the German Bundestag, for years. Through its military takeover of Nagorno-Karabakh and the surrounding areas, Azerbaijan de facto forced over 100,000 Karabakh Armenians to flee to Armenia. After the nine-month Azerbaijani blockade of the region, which had caused a humanitarian crisis, and several armed conflicts, Karabakh Armenians could not imagine a future under Baku's rule.
Now, Azerbaijan wants to polish up its international image as the host country of COP29. On December 7, in a first joint statement, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev announced not only a prisoner exchange but also Armenia’s support for Azerbaijan's candidacy as the host of COP29 – and in return, Azerbaijan’s support for Armenia's candidacy as a member of the COP Bureau. The UN World Climate Conference will now take place in Baku in November 2024.
Azerbaijan's fossil economy and state
Both the old and the new Baku are built on fossil fuels. As described by Thomas de Waal, at the beginning of the 20th century, the oil boom made the city an important global metropolis that Hitler wanted to conquer and thus defeat the Soviet Union. The Soviet Union, therefore, shifted its main oil production to more remote Russian regions so that at the time of its collapse, Azerbaijan produced only a tiny proportion of Soviet oil. After the end of the first Nagorno-Karabakh War in 1994 and with the consolidation of statehood under Heydar Aliyev, a high-ranking Soviet official and the father of current President Ilham Aliyev, Azerbaijan began to successfully advance oil production together with British Petroleum (BP), making large profits. Meanwhile, oil production is falling, and reserves could be used up in 25 years. However, after the discovery of the Shah Deniz gas field in 1999, Azerbaijan expanded gas production, which is expected to increase further in the next few years.
State and economy are closely intertwined, and political economists view Azerbaijan as a rentier state. Oil and gas revenues are partially redistributed to the middle class through wages for state employees, whereby the state secures their loyalty. Oil and gas exports account for about 90% of Azerbaijan's exports and 60% of the state budget. State-owned energy company SOCAR operates refineries and pipelines and manages the imports and exports. Regarding climate and social standards, the company occupies one of the lowest places in the Oil and Gas Benchmark Ranking of the World Benchmarking Alliance, which is not least due to the protected position that the company enjoys in Azerbaijan and that has shielded it from costly regulations. In a 2020 case, the European Court of Human Rights “found Azerbaijan responsible for the ill-treatment of investigative journalist Idrak Abbasov,” beaten by SOCAR security personnel under the eyes of the police. The flame towers that rise over Baku are symbolic of the fusion of state and fossil fuel industry - also because they were built by an offshore company with connections to the ruling family.
Corruption and oppression
Azerbaijan is one of the most corrupt states in the world. The country ranks 154th out of 180 in Transparency International's corruption perception index. President Aliyev has ruled the country with an increasingly harsh hand for years. The American non-governmental organization Freedom House describes Azerbaijan as “not free” and gives it 7 out of 100 points in the Global Freedom Index. According to Human Rights Watch, the human rights situation has “seen a dramatic deterioration since mid-2012.” The regime takes action against opposition politicians and civil society through arrests, restrictive legislation, and co-optation. The state refuses to register independent associations that express themselves critically; hence, such organizations cannot receive any funding, including from abroad. On the other hand, government-organized non-governmental organizations (GONGOs) are financed by the state and enjoy pseudo-participation in decision-making. In 2017, Azerbaijan was excluded from the Extractive Industries Transparency Initiative (EITI) board due to its repressive civil society legislation; shortly afterward, the country withdrew from the initiative.
Citizens' protests are usually brutally suppressed – as was the case in the summer of 2023, when environmental protests against the construction of a wastewater reservoir for a gold mine and their violent repression by the security forces shook the village of Söyüdlü. In the months before the early presidential elections on February 7, 2024, which the OSCE assessed extremely negatively due to the numerous violations of democratic standards, the government took firm action against criticism. Among those arrested were Gubad Ibadoglu, a visiting scholar at the London School of Economics and opposition politician, and six journalists, including from the investigative media platform Abzas. Three other journalists from the independent Toplum TV and four activists who were arrested in a major crackdown last week also remain in custody. Human rights defenders count them all among the over 250 political prisoners in the country. Already on January 24, 2024, the Parliamentary Assembly of the Council of Europe voted against the confirmation of the Azerbaijani delegation in an annual procedure, noting Azerbaijan's inadequate implementation of its commitments as a member of the Council of Europe.
Nonetheless, it cannot be denied that Ilham Aliye and his wife Mehriban Aliyeva, the country's vice president since 2017 following a constitutional change, are popular with many Azerbaijanis. Especially since the complete restoration of Azerbaijani control over Nagorno-Karabakh in 2023, President Aliyev does not need to fear serious political competition in the short and medium term.
Azerbaijan's climate policy
According to a study by the World Bank and the Asian Development Bank, the climate crisis will make temperatures in Azerbaijan rise faster than the global average, and the country will face severe climate stress due to increasing extreme weather events, agricultural losses, and adverse health impacts. Azerbaijan ratified the United Nations Framework Convention on Climate Change (UNFCCC) in 1995 and the Kyoto Protocol in 2000, hoping this would help mobilize international financing for the country. Germany and Azerbaijan agreed on a corresponding Memorandum of Understanding in 2007. However, it took the Azerbaijani government years to make the first steps towards renewables. In 2017, Azerbaijan ratified the Paris Agreement. In 2021, laws were passed on using renewable energy in electricity production and on energy efficiency; moreover, National Priorities for Socio-Economic Development, which prioritize “green growth,” were adopted.
The country's climate goals are not ambitious and have hardly been implemented so far: CO2 emissions are to be reduced by 35% by 2030, and by 40% by 2050, with a baseline of 1990, that is, before the collapse of the Soviet industry, which was responsible for large emissions. So far, Azerbaijan is not on the way to achieving these goals. By 2030, 30% of electricity production is supposed to be generated from renewable energy. However, renewables currently only account for 7% of electricity production, although the country has significant potential for wind and solar power. In October 2023, President Aliyev opened a sizeable solar park; investments are flowing in from the United Arab Emirates, other countries, and the EU, and also Socar wants to enter the “green business.” However, there is no credible medium to long-term strategy for expanding renewables, and experts criticize that renewables will be used primarily to save gas in domestic consumption and to export more of it.
Controversially, Azerbaijan aims to establish a “green energy zone” in areas recaptured from Armenia in 2020 and seeks international investments also for the rest of Karabakh. In February 2024, the German-Azerbaijani Chamber of Commerce organized an event on “rebuilding water and wastewater infrastructure in the Karabakh region,” which, according to media reports, was supported by the German Ministry of the Environment as part of the environmental protection export initiative. The British Embassy in Baku had already organized a similar event in November 2023.
The EU as the main buyer
The EU is the country's largest trading partner, accounting for 66% of Azerbaijan's exports. Especially after Russia's full-scale invasion of Ukraine, Azerbaijan has become an important energy supplier for the EU. In July 2022, Brussels and Baku agreed to more than double gas supplies from Azerbaijan by 2027. However, this would require expanding the transit infrastructure and gas production itself. Recently, Azerbaijan has, among other things, imported additional gas from Russia and Turkmenistan (via Iran) to meet domestic needs while increasing exports. Despite the planned raises, Azerbaijan's role as a gas supplier should not be overestimated: Even with a massive expansion of deliveries, the country will probably not provide more than 5% of EU gas imports.
The EU also wants to import electricity from Azerbaijan in the future: In December 2022, Azerbaijan, Georgia, Hungary, and Romania agreed to cooperate on building a submarine electricity cable as part of the EU Global Gateway Initiative. Whether it can be realized depends on various factors, including the expansion of renewable energy in the South Caucasus and the further course of the Russian war of aggression in Ukraine.
COP29: Azerbaijan wants legitimacy and financing
If revenues from fossil fuels dry up in the medium term due to the EU's move towards climate neutrality, Azerbaijan's economy and state model would clearly fail. To ensure authoritarian stability, Azerbaijan must inevitably turn to renewable energies, for which it wants to attract further international financing at the COP. In addition, after the bad international press in recent years, the Azerbaijani regime wants to extract external legitimation from such a high-level mega-event in Baku. After the initial PR failure when Azerbaijan introduced its all-male COP committee, 12 women were added – an excellent example of why women's participation does not equate to a feminist approach. Mukhtar Babayev, COP President and Minister of Ecology and Natural Resources, previously worked for SOCAR for 26 years; the COP-Committee, moreover, includes current executives of the fossil industry, highlighting clear conflicts of interest.
How to approach COP29 politically?
Sadly, Azerbaijan is neither the first authoritarian state nor the first fossil state to host a COP. To tackle the climate crisis, collaboration is necessary, even with difficult partners. Therefore, as long as Azerbaijan refrains from further military escalations against Armenia, a major boycott of COP29 cannot be expected for the time being, even if Armenian civil society has already called for it in a widely supported statement. Some independent Azerbaijani actors are asking the international community, instead of a boycott, to advocate for broad civil society participation opportunities, the reinforcement and implementation of Azerbaijan's climate and environmental goals, and the release of political prisoners.
From Azerbaijan's perspective, whether the COP will be not only a financial but also a political success will largely depend on how the country deals with its civil society ahead of the event and whether it makes genuine steps towards peace with Armenia. Democratic states and international companies should be careful not to allow themselves to be used for greenwashing during the COP and beyond.
In any case, COP29 in Baku has one good thing: it offers the opportunity to raise awareness of the climate crisis in Azerbaijan and the region, which is low even among young people, and it can generate a real impetus for urgently needed further climate action in the South Caucasus.
