Georgia’s Move Towards a Green Economy: Opportunities, Drawbacks and Structural Challenges – New Eastern Europe

Green issues are not usually the first thing that comes to mind when it comes to Georgian politics. Nevertheless, recent treaty signings show that countries are starting to take climate change seriously. Tbilisi must then ensure that such promises lead to real change.

August 16, 2022 – Rasha Gamjashvili –
Articles and commentary

Enguri hydroelectric power plant in Georgia.Photo: Sakusa/Shutterstock

The best way to determine a country’s economic and political priorities is to look at what is written in key strategic documents. The Association Agreement and Comprehensive Free Trade Area Agreement between Georgia and the European Union are the most significant legal agreements in the country’s recent history. Georgia and the EU signed these treaties in June 2014. This is an ambitious move that lays the groundwork for Tbilisi’s future political and economic integration with the EU. The Association Agreement between the Parties entered into force two years after its signature.

While these documents are very important, the role of other important documents focused on Georgia’s economic and political development should not be overlooked. It is worth emphasizing that Georgia also signed another important document. “Georgia’s Accession to the Treaty Establishing the Energy Community”. By signing this document, the country underscored its ambition and political goals to transform energy security and promote renewable energy development. These agreements urged Georgia to meet all its obligations and positively transform its energy security system. A new energy policy came into force in 2015 to establish short-, medium- and long-term goals for energy development focused on the utilization of the country’s renewable energy resources. Top priority. The government has decided to reduce imports and use locally available renewable energy sources to achieve this goal.

a wealth of challenges

First, Georgia has great potential to harness renewable energy resources. Broadly speaking, the country has a lot of hydropower potential. Across the country she has 26,000 rivers, 300 of which are important rivers that produce energy. It is estimated to have a total potential capacity of 15,000 megawatts (MW). In addition, wind energy could generate 1500 megawatts (MW) of power in these rivers. Georgia also has geothermal water reserves with an annual capacity of 250 million cubic meters. The country experiences high levels of solar radiation due to its geographical location. Most of the country has 250 to 280 days of sunshine per year and 6,000 to 6,780 hours of sunshine. Judicious use of these resources could save Georgia 7 tons of conventional fuel in the near future.

Georgia has long implemented ambitious environmental and energy reforms as part of association agreements with the European Union and the European Energy Community. After reviewing these strategy documents, it’s easy to draw some conclusions. First and foremost, progress has been made in the energy transformation, and international organizations recognize this progress. But some multifaceted challenges are also evident. The following points should be considered as the main challenges for Georgia in transitioning to a green economy.

1) It is necessary to formulate a long-term strategy based on solid analysis, and it is also important to establish appropriate implementation mechanisms.

2) It is also important to ensure that the energy strategy is aligned with Georgia’s development goals, including compatibility with strategic climate change documents, sustainable development strategies, and economic, environmental and social policies.

3) Georgia also needs to improve its national energy statistics collection.

4) It is worth noting that the country strengthens its analytical capacity for energy market and policy analysis and cooperates with think tanks that specialize in this area.

5) Governments should pass laws governing electricity and gas markets to promote energy efficiency and renewable energy.

6) The country should focus on further development and creating a competitive energy market.

7) Governments should protect vulnerable groups who do not have equal access to various services.

8) It is important to promote transparency and effectively monitor different key sectors.

Summarizing these points, the main challenges relate to the lack of a comprehensive energy strategy and robust analysis. Proper monitoring and enforcement are also critical to a successful path to a green economy.

possibility of change

Despite these obstacles, Georgia has the potential to transform its energy sector. Georgia’s natural resources are a significant source of national wealth and have the potential to accelerate inclusive socio-economic development. It should be noted that the country’s dependence on non-renewable resources has had a negative impact on agriculture, forests, air quality and coastal zones. This clearly had a negative impact on the economy. For example, land degradation is estimated to have cost him 0.7% of GDP in 2018. The country is focused on developing the tourism sector. As a result, coastal damage has a direct impact on this sector, with an estimated economic loss of her 5% of GDP in 2018. Clearly, air pollution adversely affects people’s health, increases mortality, and significantly reduces a country’s GDP. Like other countries, Georgia faces serious threats from climate change as it directly affects every part of the country. It adversely affects sectors such as agriculture, water resources, forests, coastal areas and public health.

Moving Georgia towards sustainable development requires an intensive mix of effective policies, effective incentives and investments. To achieve this, Georgia must properly address structural problems, analyze the impact of losses on economic activity and take appropriate action. A multisectoral approach to sustainable development needs to be developed, as well as improved forest and landscape management, coastal zone development, and pollution control. This will help Georgia accelerate its transition to green growth.

Georgia’s environment is a valuable economic resource. However, the consistently high cost of environmental destruction demonstrates the need for sustainable and green economic development.

There has been some progress in the legal framework governing the forest sector. The Georgian government prioritizes forest management. The government is working to improve the management of degraded watersheds, while at the same time supporting sectoral reforms, especially those of forestry institutions. There are also signs of declining watershed quality in the eastern region, where land degradation is more of a problem. Governments should seek more funding to address this problem and direct it toward improving land management, rehabilitating damaged landscapes, and strengthening environmental infrastructure.

At the same time, the country’s coastal areas are facing greater challenges due to land degradation. This not only directly affects public health and the safety of Georgians living in coastal areas, but also negatively affects the economic development of the state. Improving early warning systems requires detailed geological surveys and specialized tools. Georgia should follow the good example of other Black Sea Basin countries that rely on a healthy coastal environment, mainly for their fishing and tourism industries. Georgia could benefit more from its fisheries, increase the number of jobs in these areas and improve the socio-economic conditions of its population if the problems associated with coastal degradation were successfully addressed. Fluctuations will exacerbate the situation. Erosion could accelerate and more flooding could occur. For this reason, the Georgian economy should become more resilient.

It is important to note that the transition to a green economy will be futile unless pollution levels are reduced. Georgia should address this issue by regulating and monitoring air pollutants in all industries. This type of monitoring system should also be created and developed. The country’s air defense laws should be improved. Transport-related pollution is a significant contributor to the country’s air pollution. Georgia has raised fuel standards to meet her EU standards, but needs to improve its fuel quality inspection and monitoring system.

national mobilization

Thanks to some reforms, Georgia has a good reputation as a “reform nation”. These reforms can provide the basis for the country’s new green economy. Tbilisi has made some excellent decisions and has become a leading state in making business valuations and other important assessments. Although economic activity is largely carried out by the private sector, the country has the potential to encourage such companies to create even more jobs. As a former Soviet republic, Georgia used to be completely state-owned. After the Rose Revolution, Georgia privatized many state-owned enterprises between her 2004 and 2011. Nevertheless, further action is required. At present, forest land is mainly managed by the government, and agricultural land is privately owned. We need to support the private sector so that it can responsibly use natural resources and create jobs. Most importantly, countries must improve the knowledge and skills of their workers in order to create ‘green jobs’. Governments should invest more in education and training for those who need to learn new skills.

In summary, Georgia has made great strides in greening its economy, but this must become a top priority for the country in order to achieve better results. The country has implemented several environmental policies over the last decades, but there is still much work to be done. The law is not yet finalized, but the country needs a comprehensive environmental strategy that goes beyond paper. Achieving achievable goals, such as reducing air pollution and resource inefficiency, requires aggressive implementation. Finally, the focus should be on public health, coastal zones, ecosystem sustainability, and enhancing national biodiversity.

This article was funded by the National Endowment for Democracy and Note from PolandYou can subscribe to the project newsletter or listen to the VoiCEE podcast.

Rasha Gamjashvili He holds a BA in Social Sciences in International Relations from the International Black Sea University (Georgia) and an MSc in Social Sciences from Vytautas Magnus University (Lithuania). Lasha is a contributor to several think tanks and has worked on European and international events.

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Energy, Energy Security, Georgia, Green Transformation, South Caucasus

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