The potential of the green economy to impact socio-economic well-being in the Republic of Azerbaijan

Abstract

The transition to a green economy has become a strategic imperative for sustainable development, particularly in countries like the Republic of Azerbaijan, where environmental degradation and economic dependency on fossil fuels present significant challenges. Despite global discourse on green development, limited empirical analysis has focused on the socio-economic implications of green policies in the Azerbaijani context. This study explores the potential of green economy initiatives—such as renewable energy deployment, eco-friendly technologies, and efficient resource utilization—to enhance social welfare and economic resilience. We used the Toda-Yamamoto causality test on time series data from 1990 to 2020, to identify a unidirectional causal relationship from employment to carbon emissions, highlighting the critical role of labor market dynamics in environmental outcomes. Our results underscore those green economic strategies can contribute to job creation, social equity, and the development of innovative ecological sectors, thereby fostering long-term improvements in quality of life. These insights support the formulation of integrated policies that align environmental sustainability with socio-economic goals. Therefore, we advocate for increased investment in green technologies and cross-sectoral collaboration to facilitate Azerbaijan’s transition to a low-carbon, inclusive economy. As global environmental concerns intensify, Azerbaijan’s green transformation offers a model for other resource-dependent economies seeking to balance growth with ecological responsibility.