Azerbaijan is taking significant steps in the energy transition process, according to Economy Minister Mikayil Jabbarov, who spoke at the "Baku Climate Action Week," Azernews reports.

"One of the 14 key initiatives included in the action agenda of the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) is the establishment of the Climate Finance Action Fund (CFAF). We believe this fund can play an important role in addressing the existing gaps in climate finance. The capital for the fund is expected to come mainly from fossil fuel-producing countries and companies involved in oil, gas, and coal production," Jabbarov said.

He emphasized the importance of investing in climate action for developing countries and small island states, highlighting Azerbaijan's belief that resource-rich nations should take the lead in combating climate change. "This initiative could have significant benefits in bridging the gaps in climate finance. With an initial capital raising of US$1 billion and at least 10 donor countries joining the fund, we believe this will be a key topic of discussion at COP29," the minister added.

Jabbarov also addressed the pressing need to develop a "green economy" in response to global climate changes, decreasing natural resources, and increasing demand. He warned of the potential economic consequences of climate change: "According to the calculations of the World Bank, as a result of the effects of climate change, global GDP will decrease by 1.5-5% annually until 2050. Climate change disrupts the ecological balance and negatively affects biodiversity. These factors once again emphasize the importance of taking urgent measures to mitigate the wide-ranging effects of climate change."