Baku: A domestic carbon market has not yet been formed in Azerbaijan, and the country should start building the necessary infrastructure for its creation now, Ali Ahmadzada, economist at the Sustainable Finance Department of the Central Bank of Azerbaijan (CBA), said during a panel discussion titled 'Scaling Climate Finance through Carbon Markets' held as part of Baku Climate Week.

According to Azeri-Press News Agency, Ahmadzada highlighted that while an international mechanism exists that Azerbaijan could join in the future, the domestic carbon market is still in its nascent stages. He pointed out that several core issues need addressing to establish such a market, though Azerbaijan can leverage existing global experiences to expedite this process.

The CBA representative underscored that over 20 jurisdictions worldwide have been developing carbon markets for over two decades. Azerbaijan can learn from their experiences, including mistakes, to build a more reliable carbon market efficiently and cost-effectively.

Ahmadzada stressed the significance of studying carbon market models from the European Union, China, Kazakhstan, and Uzbekistan. He specifically mentioned China's approaches that manage emissions without hindering economic growth, which could serve as a model for Azerbaijan.

He further stated that Azerbaijan's initial focus should be on establishing a legislative framework and creating a monitoring, reporting, and verification (MRV) system. Ahmadzada emphasized that the MRV system is crucial for ensuring the reliability of carbon projects and could potentially facilitate Azerbaijan's access to international carbon markets.