In 2024, climate’s hottest club is COP29. Tickets to Baku, host for this year’s United Nations Climate Change Conference from November 11 to 22, are few and far between. Passes to the Blue Zone housing plenary sessions and high-level discussions are far harder to come by compared to the Expo City venue in Dubai, capital of the United Arab Emirates (UAE) and the host of COP28 in 2023. COP attendance famously skyrocketed last year as 84,000 participants flocked to the Emirati’s tour de force. This year, Azerbaijan is halving attendance with only an expected 40,000 invitees.
Even the Green Zone, the venue adjacent to the main event, is enviably exclusive. With booth prices ranging between $300,000 and $3,000,000 the pricey real estate is coveted by industry and NGOs alike. Responding to concerns about this year’s decreased capacity, the UN’s climate lead Simon Stiell reminded skeptics that “bigger doesn’t necessarily mean better.”
Although a stark contrast has been drawn between the Dubai and Baku participation numbers, there is one key feature that the two hosts share: Both the UAE and Azerbaijan are petrostates.
Why Azerbaijan?
For the second consecutive year, the world’s largest climate conference is being hosted in a country with fiscal dependence on fossil fuels. This decision has outraged climate activists who have questioned the conference’s legitimacy: How can government officials advance a decarbonization agenda in a country reliant upon oil and gas revenues? It has also spurred conversations on the selection process.
The COP host is chosen from one of the five United Nations regional groups: the African Group, the Asia-Pacific Group, the Eastern Europe Group, the Latin American and Caribbean Group (GRULAC), and the Western European and Others Group (WEOG). Traditionally, the host is selected well in advance. Brazil (the host of C0P30) was even chosen before Azerbaijan. But when the mantle for COP29 passed to the Eastern Europe Group, finding a consensus proved challenging.
Russia’s invasion of Ukraine and the European Union’s subsequent decoupling from Russian gas has resulted in fraught political relationships marked by hostility. Against this background, the Russian government sent an email to other Eastern European representatives, arguing that “EU countries, driven by politics from Brussels, do not have the capacity to serve as honest and effective brokers of global climate negotiations.” Russia’s opposition eliminated a large swath of candidates: Of the 23 countries in the Eastern Europe Group, 11 are EU members and 14 are NATO members.
Since a COP host must be selected through consensus rather than a simple majority, the conference remained “homeless” as countries jockeying for leadership faced a series of diplomatic blockades. The Kremlin’s obstruction of Bulgaria’s COP candidacy was foreseeable. It was also unsurprising that Armenia originally objected to Azerbaijan’s bid in response to their military offensive in Nagorno-Karabak, which displaced 100,000 Armenians. However, after prolonged negotiation, Armenia lifted its opposition in December 2023.
Azerbaijan was not the bloc’s first choice—its selection was the result of complex geopolitical negotiations that had little to do with climate policy. But the fact that COP is once more being hosted in a petrostate sets a dangerous precedent for behavior deemed permissible both during and after the conference.
Picking Petrostates
In 2021, Carbon Tracker identified 40 petrostates, thirteen of which derived more than 50 percent of their GDP revenue from fossil fuels—both the UAE (52 percent) and Azerbaijan (64 percent) were on the list. While COVID-19 and Russia’s invasion of Ukraine have since shifted oil and gas revenues, each of the last three COP hosts remain reliant on fossil fuels for at least 25 percent of respective national GDP. In a world desperate for decarbonization, it is deeply contradictory to convene the largest climate conference in a country where state interests are reliant upon fossil fuels.
For many petrostates, failure to adapt to a clean energy transition would be economically devastating. This is particularly true for Azerbaijan, which relies on its oil and gas industries for 90 percent of exports—26.6 million tons of crude oil and 22.6 billion cubic meters of natural gas in 2022. On its vulnerability index, Carbon Tracker ranked Azerbaijan as a Tier 4 State (out of 5), exposing a clear over-reliance on industries antithetical to the spirit of the upcoming conference. Given the degree of GDP dependence and government intertwinement with the national oil and gas companies, it is fair to question Azerbaijan’s intentions.
Despite the obvious concerns, some have come to Azerbaijan’s defense arguing that a true transition requires meaningful partnerships with petrostates. Azerbaijan’s most laudable technical priority is its focus on the expansion of battery storage capacity and transmission grids, even though the practical structure of its ambition remains to be seen. Proponents also point to the new strategic agreement between Azerbaijan and Masdar, a UAE renewable energy company, which will install 1GW of solar and onshore wind energy as evidence of progress. While state investment in renewables is much needed, this isn’t the first time that a contract with Masdar has been used to justify hosting COP in a controversial location.
Operating on six continents with a global project valuation of $30 billion and a gross energy capacity of 22 GW, Masdar is a major producer of renewables. From its first 10 MW Solar Photovoltaic Plant—which produces 17,500 MW annually—to the Mohammed bin Rashid Al Maktoum Solar Park—which powers 240,000 homes per year—Masdar’s investments substantiated Dubai’s claim to pro-climate legitimacy despite the country’s petrostate status. But Masdar became a focal point last year when its chair, Sultan Al-Jaber, was chosen as the COP28 president. Although Al-Jaber led (and continues to lead) the major renewables firm, he was (and continues to be) the head of the Abu Dhabi National Oil Company (ADNOC)—the UAE’s state-owned oil company.
This year’s COP president-designate, Mukhtar Babayev, is not the sitting CEO of a major fossil fuel company. But before becoming Azerbaijan’s Minister of Ecology and Natural Resources, Babayev worked for the State Oil Company of Azerbaijan (SOCAR) as the vice president of Ecology. The portfolios of both Babayev and Al-Jaber are emblematic of the complex intertwinement of fossil fuel interests and transition targets in petrostates: Many officials have ties to both clean and dirty energy.
While activists and politicians demanded Al-Jaber’s resignation last year, his supporters pointed to Masdar as a beacon of renewable hope in a state embroiled in fossil fuels. Now proponents of Azerbaijan’s leadership are making that same case. But a Masdar partnership is not proof of good intent.
Research by the news website Politico found that Al-Jaber leveraged COP28 negotiations to advance fossil fuel interests. Ahead of the conference, Al-Jaber falsely claimed that there is “no science” that necessitates the absolute phase out of fossil fuels to stay within 1.5 degrees Celsius. Leaked internal documents also revealed a plan to “discuss fossil fuel projects” with 15 countries. And in the months since COP28, ADNOC has increased oil production, a far cry from the “beginning of the end” touted by the UNFCCC after last year’s final resolution.
Should that same sleight of hand be expected in Azerbaijan?
Baku’s Balancing Act
Azerbaijan lacks the sovereign wealth capabilities of its predecessor and has thus far demonstrated little interest in diversifying its energy sector. In fact, the prominence of natural gas in the country’s economy may actually increase dramatically over the coming years, in part due to its geopolitical neighborhood.
Ukraine’s last remaining transit agreement for Russian gas will lapse at the end of this year. Eyeing the writing on the wall, EU officials have appealed to Azerbaijan to facilitate a transition to alternate flows. While Azeri Gas has neither the existing excess capacity nor infrastructure to offer a drop-in alternative to the 15 billion cubic meters (bcm) supplied by Gazprom, its role in replacing volumes will likely reinforce the domestic importance of gas for years to come.
In the short term, Azeri Gas will likely fill the void by entering into swap agreements with Gazprom—essentially re-labeling existing flows. However, over time, Eastern European states like Slovakia may look to replace veiled Russian flows with truly alternate supply—sending a demand signal that could spur new upstream exploration and drilling efforts by Azeri Gas.
These negotiations will unfold parallel to COP, sending conflicting messages to European leaders and the global community writ large. Baku is therefore faced with the difficult task of balancing its fossil ambitions with its climate obligations.
So far, the COP presidency has made no indication of advancing Dubai’s pledge to “phase out” the use of fossil fuels. Instead, President Babayev has championed the cause of reducing methane emissions associated with waste and food systems, while dodging similar scrutiny for the energy and agricultural sectors which will release larger quantities of greenhouse gases.
Atop Baku’s bucket list will be deliberations surrounding the New Collective Quantified Goal—an updated target that will replace the $100-billion annual climate finance pledge, a milestone that wealthy nations only recently met. The new target must reflect the massive investments required in energy, industrial, and transportation decarbonization efforts while representing the overwhelming unmet need to respond to the effects of a rapidly changing climate.
Any decisions pertaining to Article 6.4 of the Paris Agreement—defining the structure of a global, UN-managed carbon market—will be equally salient. In this regard, Azerbaijan’s close affiliation with fossil fuels will certainly raise eyebrows, as offsets and carbon markets remain deeply divisive within climate circles. Still, introducing an effective global carbon market structure with robust monitoring and evaluation frameworks would be a strong step forward in international climate efforts and Baku could help lead the charge.
Russia Casts a Shadow
While the holder of the COP presidency is not the ultimate determinant of a successful conference, host nations provide important backdrops to the annual deliberations. Short on climate clout and without the deep pockets of its petrostate predecessor, Azerbaijan will certainly face a degree of criticism—which may spill over into formal proceedings. The presidency, after all, holds the mandate to steer plenary sessions and deliver outcomes on the convenings outlined objectives.
The Kremlin power politics that led to Azerbaijan’s selection, coupled with the expiration of Ukraine’s final transit agreement, will also cast a shadow over the conference. Russia is unlikely to be any more of an amenable party at the conference and the friction displayed during venue negotiations does not bode well for the herculean task of climate diplomacy.
While Azerbaijan’s fossil fuel dependency has undermined its legitimacy as a host, the jury is still out on its ability to deliver a consequential final resolution. Will Azerbaijan leverage the conference to promote fossil fuel interests, or will it pacify the industry and chart a sustainable decarbonization path for petrostates?
Emily Hardy co-writes IPQ’s CARBON CRITICAL column and is a Master’s Student at the University of Oxford. She was a James C. Gaither Junior Fellow in the Sustainability, Climate, and Geopolitics Program at the Carnegie Endowment for International Peace.
Dan Helmeci co-writes IPQ’s CARBON CRITICAL column. He is a researcher and former James C. Gaither Junior Fellow in the Sustainability, Climate, and Geopolitics Program at the Carnegie Endowment for International Peace.
