2024-07-17 08:32:20
Azerbaijan, which is hosting this year’s COP29 climate summit, has abandoned plans to tax fossil fuel producers to raise money to fight climate change and instead aims to create a new fund for “green” investments in poor countries.
This was reported by Day.Az with reference to the British news agency Reuters.
A source speaking on condition of anonymity told Reuters that Azerbaijan had initially floated the idea of introducing a tax on fossil fuel extraction to raise money to fight climate change, but it had met resistance from some countries.
“We had several rounds of talks with interested parties – with other potential investors – and we had to adjust the idea of the fund to make it attractive to potential investors as well,” the source said.
“Azerbaijan will be one of the main contributors to this fund,” he said, adding that the fund will also seek voluntary contributions from other fossil fuel producing countries.
Other sources familiar with the discussions told Reuters that Gulf oil and gas producing countries had opposed the initial idea of a tax.
The revised proposal calls for the creation of a fund during the COP29 summit and the use of public-private partnerships to de-risk investments to help developing countries reduce emissions and cope with worsening climate change.
Poor countries struggle to attract investment due to high interest rates and debt burdens. Africa has received just 2% of global renewable energy investment over the past two decades, according to the International Renewable Energy Agency.
The issue of financing will be at the centre of the COP29 climate talks in Baku in November, where countries will try to agree on a new target amount for rich countries to transfer to poor countries each year starting in 2025.