The country’s economy is heavily dependent on oil and gas, which account for a third of GDP and 90% of exports. With existing oil reserves dwindling and expected to last another 25 years, comprehensive and effective decarbonization efforts will help diversify the economy and open up new drivers of growth, such as green hydrogen and agriculture, says the World Bank Group’s Azerbaijan Country Climate and Development Report (CCDR), released today, APA-Economics report.
Note that agriculture is a sector critical to Azerbaijan’s non-oil economy. The sector contributes less than 8% of GDP but accounts for 36% of total employment. However, the sector is highly vulnerable not only to extreme weather events but also to the existing water deficit in the country. Climate-proofing the sector to higher temperatures and lower water availability must include improved irrigation efficiency and the introduction of climate smart agricultural practices to improve productivity while building resilience to climate change and reducing emissions.