BAKU, Azerbaijan, July 15. The current geopolitical and macroeconomic situation will only complicate matters for Central Asian countries in their path to a ‘green’ economy, the official at European Bank for Reconstruction and Development told Trend.
The official noted that in 2021, it was forecast already that while higher prices may benefit commodity exporters such as Azerbaijan, Kazakhstan and Russia, they may have a lasting negative effect on importers, particularly in the southern and eastern Mediterranean region.
“Growing concerns about potential shortages of gas over the winter period could drive public sentiment away from renewable energy and push countries towards greater use of fossil fuels. High prices of natural gas, oil and other commodities weigh on the trade balances of energy importers. Many countries will be under pressure to mitigate the burden of higher energy expenses on low-income households. High energy prices, supply-chain disruptions and, in some cases, currency depreciation have pushed up inflation significantly. This is a cause for concern,” the EBRD said.
The Bank also noted that higher energy prices may provide an early test of the strength of public support for a greener future.
“While such support has been strong and rising globally in recent years, in some economies, including Egypt, Lithuania, Kazakhstan, Poland and Romania, it is lower than it was in the late 1990s,” the Bank said.
The official emphasized that the current geopolitical and macroeconomic situation will only complicate matters as the existing energy supply chains are broken or distorted.
“Poorer economies may have to prioritize between their immediate green plans and emergency measures to keep their countries going and but there is no alternative to going green in the long-term,” the official concluded.