Ammon News - Abdulhamid Hamid Al-Kba - As Azerbaijan seeks to solidify its image as a regionally responsible environmental player following its hosting of COP29 in Baku, the Ministry of Ecology and Natural Resources has published a draft Climate Law for public consultation. This is not merely a technical document; it represents an attempt to reshape the balance between the country’s traditional oil-based economy and its growing international commitments.

The key question is whether this draft law represents a genuine strategic transformation or a calculated exercise in image management following the climate summit.

The draft proposes the establishment of a national carbon registry, the regulation of carbon pricing mechanisms through an emissions trading system and a carbon tax, and the creation of a five-year carbon budget that sets the maximum allowable emissions. It also establishes a national inventory, monitoring, reporting and verification (MRV) framework, as well as procedures for registering carbon projects. The law would apply to government bodies and legal entities, with exceptions for defense, security, and emergency situations.

Azerbaijan has achieved a significant milestone by registering the “Hydro-3” project (the Mirik and Gargarshliq small hydropower plants in Lachin) under the Gold Standard. The project generated 10,745 carbon units and is expected to prevent the release of 45,000–50,000 tons of CO₂ annually. These are the country’s first internationally recognized carbon credits from renewable energy. This practical achievement now finds a broader legal foundation in the proposed Climate Law, which aims to institutionalize such initiatives at the national level.

In my view, the project carries dual importance. Technically, it places Azerbaijan among countries equipped with modern tools for carbon management. Economically, it opens doors to green financing and the export of carbon credits, especially in the Karabakh region, which is intended to serve as a green model.

On a regional level, Kazakhstan is more advanced in this field, having operated a more mature emissions trading system for years. This gives Baku an opportunity to accelerate the development of its carbon governance framework, but it also places greater pressure on it to prove that it is not merely producing legislation on paper.

Nevertheless, I expect implementation to be the real test. Imposing carbon pricing could impact heavy industries and the oil sector, requiring a just transition that includes worker retraining and support for small and medium enterprises. Additionally, reliance on international verification and transparency will be crucial to maintaining credibility, especially after hosting the summit. The continued heavy dependence on oil and gas leads some to question the speed of this shift.

Azerbaijan appears to be entering a new chapter in its climate policy. The proposed Climate Law, together with the proposed national carbon registry and the first international carbon credits from hydropower, indicate a desire to reconcile its oil economy with a greener future.

The initial indicators are promising, but success will not be measured by laws alone. In the end, neither markets nor international summits will judge Azerbaijan’s climate policy — it will be judged by the tangible reduction in emissions and the economy’s genuine ability to adapt to a post-carbon era. The coming years will reveal whether Baku has truly embarked on a strategic transformation or merely taken another symbolic step on a long road.

*Abdulhamid Hamid Al-Kba- Opinion Writer Specializing in Central Asia and Azerbaijan Affairs