Armenia’s green economy challenges and opportunities on the path to climate neutrality

The EU and Armenia are writing a new chapter in their relationship with the EU-Armenia Comprehensive and Enhanced Partnership Agreement, in force since 1 March 2021. This collaboration represents a significant step towards a sustainable future, with Armenia committed to aligning its economy with the EU’s climate goals and aiming for climate neutrality by 2050 as set out in the European Green Deal.

The Green Deal is an ambitious roadmap by the European Commission to make the EU climate-neutral by 2050. For Armenia, an associated nation, this presents an exciting opportunity to integrate into global movement towards sustainability and innovation.

To support Armenia on its path, the Green Agenda project, led by Stockholm Environment Institute and funded by the Swedish International Development Cooperation Agency (Sida), is designed to assist the country in revamping its economy to meet these ambitious climate goals.

We spoke with Alen Amirkhanian, Director of the Acopian Center for the Environment at the American University of Armenia, about what achieving climate neutrality means for Armenia.

Adhering to the Green Deal and the Green Agenda opens up significant funding and resources for Armenia through European Community programs, enabling capacity building, market expansion and the development of new products and services.

“The green economy impacts all sectors, from mining and agriculture to transport and energy,” Alen Amirkhanian notes. “It seeks to balance environmental and social sustainability while creating opportunities for economic growth and development.”

Amirkhanian points out that while Armenia doesn’t differ significantly from other countries on its path to climate neutrality, it does face unique challenges. Addressing these challenges presents Armenia with new opportunities on the journey towards a green economy and climate neutrality. For instance, the country currently imports 94% (including nuclear fuel) of its energy resources. As such, it stands to gain from sustainable energy solutions that will lead Armenia towards decarbonization and energy security.

Furthermore, positive steps toward climate adaptation can enhance food safety, even though some hurdles like water and waste management will need to be navigated. Transitioning to more sustainable infrastructure, technologies and practices may present difficulties, but it also allows the country to innovate and increase its resilience.

At its core, the green economy addresses more than just environmental issues. According to Amirkhanian, it is important to understand that the basis of the green economy is primarily economic, and the green transition provides both economic and environmental benefits. Although some small groups might have to make extra efforts to adapt to the transition, society and Armenia’s economy will ultimately benefit.

A successful shift to green economy requires teamwork between the government, businesses, citizens and civil society. The government plays a vital role by creating clear laws, supportive policies and international partnerships, as well as identifying sectors for a knowledge-based economy while encouraging eco-friendly businesses practices.

“Businesses have a significant role to play and could gain in the medium and long term,” Amirkhanian emphasizes. “All projections indicate that we will face increased water shortages in the region, including in Armenia. Businesses need to understand what this means for sectors like agriculture, energy and mining, and must also consider how they might be affected by changes in precipitation and increased evaporation over the next 20–30 years.”

A citizen, in turn, can adopt eco-friendly habits by saving energy and water, making informed purchases, avoiding harmful chemicals and using sustainable alternatives. Raising awareness is essential and can be done through product labeling, information campaigns and education. Amirkhanian also highlights the positive role of civil society in this effort. Non-governmental sector should not only advocate for change, but also engage in awareness-raising campaigns proposing solutions to speed up the transition to a green economy.

Measurement is key to ensuring a proper green transition, and Amirkhanian points out that the transition can be tracked using a number of indicators. For instance, energy intensity – which measures how much energy is used to generate a unit of GDP – is one way to track this transition. Other indicators include the volume of carbon dioxide emissions and liters of water used per unit of economic output. Europe has established many SEPA (Single European Payments Area) targets that provide indicator benchmarks for countries seeking to align their practices with those of the European Community.

In summary, Amirkhanian highlights that Armenia is already working on the initiatives aligned with the EU Green Deal. These include efforts such as EU4Sevan, EU4Environment, new water sector planning efforts, and the development of energy conservation and efficiency as well as renewable energy sources. He believes these efforts need to speed up.

“Our citizens are becoming more aware each day. Organic and sustainable solutions benefit both human health and the environment. This shift has started in Armenia, and I believe that with focused efforts, we can achieve considerable results in the next 10–15 years.”