Climate as Economy: Why Green Transformation Matters for Uzbekistan

Tashkent, Uzbekistan (UzDaily.com) — Climate is no longer a topic only for environmentalists. Today, it directly affects the economy, investment, agriculture, and quality of life. Globally, annual greenhouse gas emissions have reached a record approximately 57.4 billion tons of CO₂ equivalent, and this figure continues to rise despite international agreements.

For Uzbekistan, where water has always been a strategic resource, climate change has become one of the main development challenges. Since the 1960s, the average temperature in Uzbekistan has risen by about 1.6°C, nearly three times the global average warming of approximately 0.6°C. In certain regions, such as around the Aral Sea, temperature increases have reached 2.5°C, and droughts are becoming more frequent.

Rising temperatures, more frequent droughts, and water shortages are already affecting agriculture, energy, and food security. According to the United Nations Environment Programme (UNEP), the economic damage from climate-related events in the country averages around $92 million per year from climate-related disasters alone.

At the same time, external conditions are changing: international markets and investors increasingly take climate factors into account when making decisions. In this context, climate policy is becoming an integral part of economic strategy.

Addressing these new challenges cannot be achieved by a single country alone. Therefore, the Institute of Macroeconomic and Regional Studies, together with the Institute of Natural Resources Economics and Climate Change at the Higher School of Economics (Russia), is implementing a joint research project focused on adapting Uzbekistan’s economy to water and climate risks and advancing global green transformation. Its goal is to develop practical recommendations for the government and business.

Today, green transformation is not an abstract goal but a reality. Around the world, markets for green technologies are emerging, carbon regulation mechanisms are being introduced, and access to financing increasingly depends on environmental performance. For Uzbekistan, this means the country must account for new rules while safeguarding its own development interests.

Water remains the key challenge. Experts note that the traditional approach, based on expanding water supply, is no longer effective. Demand management is now paramount: modern irrigation systems, water conservation, and more rational land use. Sustainable solutions are also impossible without regional cooperation with other Central Asian countries.

It is equally important that reducing greenhouse gas emissions should not become an end in itself. For Uzbekistan, it is crucial that climate measures contribute to economic modernization, increased productivity, and job creation. In this way, climate policy becomes not a limitation but a tool for development.

The project also emphasizes climate finance. To attract international resources, the country needs clear strategic documents and a focus on tangible results. Prospects are linked to projects in the water sector, reducing industrial carbon intensity, and participating in international climate initiatives.

Uzbekistan plans to increase the share of renewable energy and aims to reduce the carbon intensity of its economy. Internationally, Uzbekistan participates in the reporting framework of the Paris Agreement and seeks to reduce greenhouse gas intensity per unit of GDP by 35% by 2030 compared to 2010, with an additional, more ambitious target of a 50% reduction by 2035. Russia actively participates in international climate agreements, targeting emission reductions by 2030 to roughly 70% of 1990 levels.

Business requirements are also changing. For companies operating in foreign markets, compliance with environmental and social standards is becoming a prerequisite for access to capital. This necessitates the development of national expertise and the training of specialists with new profiles.

The main conclusion is clear: climate is not a temporary agenda but a long-term factor in economic development. A comprehensive approach to water, climate risks, and financing allows Uzbekistan to build a more resilient and competitive growth model in the face of global change.

Mokhir Shagazatov, Director of the Land Reform Center, Institute of Macroeconomic and Regional Studies

Igor Makarov, PhD in Economics, Director of the Institute of Natural Resources Economics and Climate Change (INRECC), Higher School of Economics