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The ancient oil capital and the climate conference. The geopolitical and financial importance of the COP 29 for Azerbaijan by Giovanni Chiacchio

The famous traveler Marco Polo described in his masterpiece “il Milione” a particular tripe of oil which was extracted in the Absheron Peninsula, in the modern day Azerbaijan. In the 19th Century the region was the first to host an effective oil production and by 1901 Azerbaijan produced half of the world oil. From that moment, the world’s economic development was linked to burning fossil fuels. Now, the country whose capital was know as “the oil capital of the world” is going to host the annual ediction of the Conference of Parties (COP), the most important conference about climate change. Hosting this conference represents above all a clear geopolitical victory for Azerbaijan, but could also be a great occasion to bring tot he world attention one of the region most affected by climate change.

The legitimation factor

The recent history of Azerbaijan has been marked by a constant state of conflict with its neighbor, Armenia, which was frozen when both Baku and Erevan were occupied by the USSR. During the last years of the Soviet Union all of its regions saw a resurgence of nationalism, which greatly affected Azerbaijan. Even before its effective independence from USSR, Baku was involved once again in a brutal conflict against Armenia for the control of Nagorno Karabakh, a mountainous region located at the center of Caucasus. The First Nagorno Karabakh war ended in 1994 and resulted in a catastrophic defeat for Azerbaijan, which lost 13.6% of its territory. During the 90s Azerbaijan has pursued a policy aimed to build a vast network of pipelines in order to connect its natural gas reserves sited in the depths of the Caspian Sea to Europe, a major center of consumption. In the subsequent years Europe became the most important destination of Azerbaijan natural gas, and the two actors built a strong energetic partnership.

This economic partnership didn’t determine the formation of a political one, Bruxelles and Baku were in fact divided by a clear asymmetry related to their respective posture on the international system. Europe was described as a “post westfalian paradise” by the American author Robert Kagan in his masterpiece On Paradise and Power, while Azerbaijan maintained a clear westfalian foreign policy. This asymmetry clearly emerged in 2020, when after the failure of diplomacy Baku used its powerful army built with massive natural gas revenues to retake Nagorno Karabakh from Armenia. This time, thanks to its massive relative growth in the previous years, Azerbaijan crushed Armenian forces in less than two months. Yerevan only kept the control of 27% of Karabakh protected by a contingent of Russian peacekeepers. Even though European counties had long supported Azerbaijan territorial integrity, they advocated for a peaceful resolution of the dispute and opposed the use of military force. On 24 February 2022 Russian Federation, the most important gas provider for Europe, launched a full-scale military invasion of Ukraine. Desperately needy of gas, Europe greatly increased its imports from Azerbaijan. After months of fighting, Europe signed a deal aimed to double gas imports from Azerbaijan by 2027.

The second Russian invasion of Ukraine provided to Azerbaijan a great opportunity to complete the reintegration of Nagorno Karabakh, thanks to the complete inability of the Russian peacekeepers to counter Baku’s action. So, Azeri Armed Forces enacted a complete blockade of the region which culminated with a rapid military operation in September 2023, ended with the complete restoration of Azerbaijan control over Karabakh. This operation resulted in the flight of over 100.000 Armenians from Karabakh which was widely described as an ethnic cleaning. This event caused a massive backlash in Europe and severely undermined Azerbaijan credibility to Bruxelles. European Parliament adopted a resolution aimed to reconsider the energetic partnership with Azerbaijan and impose targeted economic sanctions to Baku and France started to provide weapons to Armenia, in order to restore the military balance in the region. Due to this state of affair, Azerbaijan needs an intangible good in order to relaunch its relations with Europe and confirming is role as a fundamental partner, legitimacy. Hosting the most important conference about climate change, one of the most important issues for European public opinion. The COP 29 provides to Azerbaijan an unprecedented opportunity to rehabilitate its image after the Karabakh operation and presenting itself as a responsible and trustworthy actor.

The (green) energy hub

After the decline of its oil production subsequent at the Second World War, Azerbaijan relaunched itself as a natural gas exporter. During the 90s huge reserves of natural gas were discovered in the depths of the Caspian Sea. That treasure would have later become the most important source of revenues for Azerbaijan. But the Caspian Sea is not only rich of gas, it has also a tremendous potential of offshore wind energy. During the last years Azerbaijan has heavily invested in energetic transition by launching three big renewable energy projects and approving the law: “On use of renewable energy sources in the generation of electricity”, which promoted investments in the green energy sector. The growth of renewable energy production will ensure three fundamental achievements for the Baku government: free more resources for export and, grant a long-term role as a green energy export to Europe and integrate the areas of Karabakh and Nakhchivan.

On the first hand, the growing use of green energy for domestic consumption will enable Azerbaijan to free huge amounts of natural gas in order to export it in Europe. This would strengthen Baku’s role as a crucial emerge exporter and provide additional revenues to invest in its economic diversification. Secondly, the European demand of gas will inevitably decrease in the long term. Thanks to the progressive exploitation of its enormous green energy potential, Azerbaijan could become a green energy exporter to the European Continent. Baku has recently signed a memorandum with Romania, Georgia and Hungary aimed to implement the project of the Black Sea Energy Caspian-Black Sea-Europe Green Energy Corridor. A submarine cable to supply Azeri green energy to Europe. This has the power both to help the worldwide energetic transition and show to other fossil fuel dependent countries a different path of development. At the same time, Baku could function as a hub for green energy in the Caspian region. Central Asian Countries, which enjoyed ethnic similarities and cordial relation with Azerbaijan have a great potential of green energy production. Azerbaijan, Kazakhstan and Uzbekistan concluded a draft agreementL aimed to establish a green energy partnership in order to export clean energy to the European continent.

Finally, the liberated areas in the Karabakh region and the Autonomous Republic of Nakhchivan have long suffered respectively from Armenian occupation and blockade. The Azeri government declared the ambitious goal to make these regions “net zero emission” by 2050. The reintegration of these territories could represent a formidable challenge for the Azeri government, and they could bring a huge weight to the state budget. Investing in clean energy could grant an economic growth to these areas and ensure their integration on the economy of Azerbaijan, preventing the formation of two black holes draining state funds. These ambitious goals required huge international investments. The COP 29 represents a great opportunity to show to the international investors the great potential of Azerbaijan as a green energy export and a green energy hub, improving the current situation of the country and ensuring its future.

Bring the worldwide attention to the forgotten world

Environmental problems were regarded as a major threat to the national security of Azerbaijan in the National Security Concept of 2007. Azerbaijan currently represents one of the most affected countries by the global warming. The country’s temperature is projected to increase to 4.7 degree, above the global average. Baku is also regarded as 61st on 191 in the Inform Risk Index, which measures the countries most at risk of natural disaster. In particular Baku is affected by risks of heatwaves and drought, as well as by Caspian Sea shrinking. At the same time, Central Asian Countries, deeply linked to Azerbaijan, are experiencing a severe desertification due to their semi arid climate and the concurrently increase of worldwide temperature. The progressive evaporation is also depriving these countries of their water reserves. However, the international community doesn’t’ seem to devote much attention to this region. The local countries need international funds in order to finance projects aimed to increase the production of green energy and avoid natural disasters. The COP 29 is one of the most followed events in the world. It could help Baku to bring the world’s attention bot to its problems and the problems of its neighbors.

A juncture between East and West, Azerbaijan has seen a massive growth both of its economy and its geopolitical importance during the last years. Strengthened by a military victory against its traditional enemy and the Russian energy export decline after the invasion of Ukraine, Baku has reached the peak of its power. However, Azerbaijan growth has been linked to the export its massive reserves of natural gas. This state of affairs makes the country’s position highly unstable in the long term. The COP 29 represents un unprecedented occasion to get both legitimacy necessary to ensure its role as a main energy exporter and international fund to diversify its economy and guarantee a stable future.

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