In the heart of the Caspian region, Azerbaijan is grappling with environmental challenges that are reshaping its economic landscape and foreign trade dynamics. A recent study published in the Scientific Bulletin of Mukachevo State University. Series: Economics, led by V. Teymurova, sheds light on how these environmental issues are impacting the country’s economy and what role human capital plays in mitigating these effects.
Azerbaijan’s economy is feeling the heat from air pollution, land degradation, water scarcity, and climate change. The study reveals that air pollution alone is costing the country between 0.11% and 0.14% of its gross domestic product (GDP) annually. Land degradation is even more costly, with estimates suggesting it drains 10-11 billion manats from the economy each year. These environmental challenges are not just environmental issues; they are economic ones too, hitting key sectors and reducing productivity.
The study, which analyzed atmospheric emissions such as CO2, methane, and nitrogen oxides, also looked at the Human Development Index (HDI) indicators. These indicators cover education, health, and standard of living, providing a comprehensive view of how environmental challenges are affecting the population.
Teymurova notes, “The COVID-19 pandemic had a significant impact on Azerbaijan’s HDI, dropping it from 0.762 in 2019 to 0.722 in 2020. However, by 2022, it had bounced back to 0.760, almost returning to the 2019 level. This resilience shows the effectiveness of measures to restore the economy and improve the quality of life.”
However, the study also highlights significant disparities in vocational education levels, with enrolment at only 12.4% of the total number of students in 2020. This limitation in innovation potential is a concern for a country looking to develop sustainable solutions to its environmental challenges.
Azerbaijan’s participation in international environmental initiatives, such as cooperation with the Green Climate Fund, is a step in the right direction. This cooperation promotes the introduction of modern technologies in renewable energy, including the development of solar and wind power plants. These initiatives are not just about reducing environmental impact; they are about boosting the country’s international competitiveness.
The study suggests that developing human capital, strengthening environmental culture, and implementing environmentally friendly technologies can contribute to sustainable economic growth. This is a call to action for the energy sector, which has a significant role to play in this transition.
As Azerbaijan navigates these challenges, the findings of this study could shape future developments in the field. It underscores the need for a holistic approach that considers both environmental and economic factors. It also highlights the importance of human capital in driving innovation and adaptation.
For the energy sector, this means investing in renewable energy technologies, promoting environmental education, and fostering a culture of sustainability. It means seeing environmental challenges not as obstacles, but as opportunities for growth and innovation. After all, the future of Azerbaijan’s economy may well depend on how it responds to these challenges.
The study, published in the Scientific Bulletin of Mukachevo State University. Series: Economics, provides a roadmap for this transition, offering insights and recommendations that could guide policymakers, businesses, and communities in their efforts to build a more sustainable and prosperous future.