Azerbaijan has announced the ‘Climate Investment Fund for Future’, which aims to raise at least $1 billion from fossil fuel producing countries and companies including state oil company Socar. The Fund will target climate projects in developing countries that need support, meeting next generation of NDCs to keep 1.5C within reach, and addressing the consequences of natural disasters.
The fund will be headquartered with its secretariat in Baku, Azerbaijan, its board of directors will include representatives from contributors, and an independent audit committee will publish quarterly data including financial reports and project evaluations. Shareholders will collectively make decisions and a working group is being established with international financial experts to further develop the management model and funding mechanism.
“Enabling action is an essential part of the COP29 agenda and we are committed to leading by example. I am grateful for the direction and support that I have received from the President of Azerbaijan,” said COP29 President-Designate Mukhtar Babayev. “We have heard that communities want action not words, and today by launching the Climate Finance Action Fund we are taking a significant step. We are calling on donors to join us so that we can fulfil the COP29 plan to enhance ambition and enable action.”
“This process of intergovernmental cooperation, and each year’s COP, is of vast significance. It is humanity’s best hope to avert the global climate crisis, and spread the huge benefits of decarbonization and climate resilience,” said UNFCCC Executive Secretary, Simon Stiell. “A successful COP in Baku is more important than ever. But this process is not easy and there is much to do. I am grateful for the hard work of the incoming COP President, his team, and the initiatives they are spearheading to create the grounds for success.”
COP29 Chief Negotiator Yalchin Rafiyev said, “We have assessed the shortcomings in financial markets and carefully listened to the concerns of communities. This will be the first fund with both fossil fuel producing countries and companies across oil, gas and coal. It will be the first to both provide investment and to address the consequences of natural disasters. And it will be the first to receive annual transfers from its contributors. We also have given special attention to accessibility and speed when addressing the consequences of natural disasters and to ensuring that shareholders collectively make decisions.”
The Fund was launched against a backdrop of ongoing critiques of the country’s heavy dependence on hydrocarbon revenues. Meanwhile, BP forecasts increased oil and gas demand despite acknowledging the need for clean energy transition.
This initiative follows President Ilham Aliyev’s earlier defense of Azerbaijan’s substantial oil and gas reserves, which he described as “god-given.” The fund is seen as a move to align with global climate goals, despite the country’s heavy reliance on hydrocarbon revenues.
At the previous COP28 summit in Dubai, nearly 200 nations agreed to phase out fossil fuels in an equitable manner to achieve net zero emissions by 2050. Critics, however, question Azerbaijan’s commitment to reducing its dependency on oil and gas.
Oil and Gas Demand Forecasts Increased
BP, one of the world’s largest oil producers, recently raised its forecasts for future oil and gas demand, indicating a slowdown in the transition to renewable energy. The energy giant’s annual outlook reveals a projected oil demand of 97.8 million barrels per day by 2035, over 5% higher than last year’s estimates.
Although BP acknowledges the need for a swift shift to clean energy, the report notes that current renewable energy growth is insufficient to meet global energy demands. Consequently, BP anticipates continued significant roles for oil and gas for the next 10-15 years.
The forecast also emphasizes a resilient oil demand in petrochemicals and emerging economies, driven by rising prosperity and living standards. Despite the increased projections for fossil fuel consumption, BP projects lower CO₂ emissions by 2050 under its net-zero scenario.
With COP29 approaching and ongoing debates about climate finance, these developments highlight the complex challenges in balancing economic growth with environmental sustainability.
