Baku: Climate change is already altering investment models, business competitiveness, and the structure of economies, Representative of the President of Azerbaijan on Climate Issues Mukhtar Babayev stated at a roundtable held in Baku. This event was part of the Fourth Climate Week of the UN Framework Convention on Climate Change (UNFCCC), hosted by the Republic of Azerbaijan and organized by the Ministry of Foreign Affairs, APA reports.

According to Azeri-Press news agency, Babayev emphasized that climate targets are implemented through decisions made in the real economy. He highlighted the World Bank's findings that in developing economies, the private sector accounts for 90% of jobs, 75% of investment, and more than 70% of economic output. Therefore, the private sector's role is crucial. While renewable energy and electrification technologies are commercially viable and competitive, sectors such as cement, steel, chemical, aviation, and shipping face challenges due to expensive solutions and the need for major infrastructure or commercially mature technologies. Babayev stressed the importance of implementing existing solutions while accelerating innovation and technology transfer for developing solutions.

Babayev also addressed the financial challenges, noting that merely calling for more private finance will not suffice. Private capital operates by considering risk and return factors. To facilitate project financing, guarantees, blended finance, and risk sharing are necessary. He advocated for banks to integrate climate finance into their core activities and for climate factors to be considered in everyday banking and investment decisions. Furthermore, Babayev highlighted the increasing connection between climate policy and trade and industrial policy, emphasizing the need for high standards to support transformation and expand opportunities for developing economies. He underscored the importance of affordable, accessible, and scalable technology and finance, along with predictable policies, to ensure competitiveness and sustainable growth as we approach COP31.