COP29 Host Baku: Cleaning Up a Century of Oil

Just a few miles from where the next UN climate conference will be held in Baku, Azerbaijan, lies a district historically known as Black City. For over a century, every house and factory in this area was stained with soot from the oil extracted and refined there, near the shores of the Caspian Sea. Baku, the world's first oil town, saw its first wells dug in the 1840s and refineries established in 1859. This burgeoning oil industry, which the Nobel brothers helped establish, significantly contributed to their fortune and played a crucial role in supplying the Soviet army during World War II.

Today, Baku still hosts operational oil wells, with their piston pumps nodding rhythmically and refinery flares illuminating the night sky. Despite these ongoing operations, fossil fuels now account for 90% of Azerbaijan's exports, marking it as one of the world's top 10 most oil- and gas-dependent economies. However, the black-stained buildings that once characterized the city have been replaced by the gleaming facades of what is now called White City, thanks to a comprehensive cleanup effort over the past two decades.

Aiming for a Green Transition

Azerbaijan is now attempting a similar transformation in its energy sector. President Ilham Aliyev has proclaimed that the country is in an "active phase of green transition," with targets to generate 30% of its electricity from renewable sources by 2030, up from about 7% today. Massive solar farms are being constructed near Baku, and there are ambitious plans to export low-carbon power to Georgia, Romania, and Hungary.

"We cannot deny the existence of the fossil fuel industry because it is a major source of income for many countries. And it's not something that can be abandoned overnight," said Yalchin Rafiyev, Azerbaijan's lead negotiator at COP29.

While Azerbaijan is making strides towards renewable energy, oil and gas remain pivotal to its economy. The country plans to increase its gas output by a third over the next decade. Aliyev has positioned this as a means to support Europe amidst the Ukraine crisis, asserting it as a "gift from the gods" and a "responsibility" to help Europe.

The Challenge of Hosting COP29

Hosting a COP is not unprecedented for oil-producing nations. The United Arab Emirates, which will host COP28, has already raised eyebrows by appointing Sultan Al Jaber, the CEO of its national oil company, Adnoc, as COP28 president. Other fossil fuel-producing nations like the UK, Qatar, Canada, and Brazil have also held the presidency in the past.

Laurie van den Burg from Oil Change International criticized the dichotomy in international climate diplomacy: "On the one hand, pledging to submit national climate plans in line with the 1.5C limit, while at the same time ramping up fossil fuel production."

A Path Forward for Azerbaijan

For Azerbaijan, there is no contradiction in being an oil and gas exporter while striving to limit global temperature rises to 1.5C above pre-industrial levels. Nigar Arpadarai, a key figure in the COP29 team, emphasized the importance of solidarity and collective effort in addressing climate change.

However, transitioning away from fossil fuels will be a monumental task. Central Baku's bustling traffic, modern highways, and luxurious hotels reflect a thriving economy that heavily relies on oil and gas. Despite this, Azerbaijan is conscious of the climate crisis's impacts, such as the declining Caspian Sea levels and regional water stress.

Last month, Azerbaijan proposed a fund for developing countries affected by climate change, although it would be voluntary rather than a levy on fossil fuels, which many economists advocate for.

The primary issue at COP29 will be securing the necessary finance for poorer countries to reduce emissions and manage extreme weather impacts. This will require trillions of dollars annually, but the wealthy developed world has struggled to meet even the longstanding commitment of providing $100 billion per year.

If Azerbaijan is to successfully host COP29 and transition away from fossil fuels, its efforts must go beyond merely whitewashing the facade of an oil-dependent nation. The country will need to make significant strides in renewable energy and broader economic reforms to genuinely address the climate crisis.