VIENNA, July 17, 2024 – The six economies of the Western Balkans need to collectively invest at least $37 billion over the next decade to effectively protect people and property from the damaging impacts of climate change, according to the World Bank Group’s Western Balkans regional Country Climate and Development Report (CCDR), released today.
The report highlights that effective climate action would yield significant benefits for Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. These investments could prevent loss of life, property damage, and productivity declines while accelerating economic growth.
The region is already experiencing severe impacts from climate change. Over the past decade, floods have affected two million people, with projections indicating worsening conditions due to extreme rainfall. Wildfires are also on the rise, with over 1,500 recorded in 2021—a 21% increase over the past decade. Additionally, droughts are impacting agricultural production and heatwaves are contributing to air pollution-related premature deaths.
“Climate change poses a clear threat to economic development in the Western Balkans,” said Xiaoqing Yu, World Bank Country Director for the Western Balkans. “The costs of investing in adaptation are significant. But the good news is that the benefits are even higher. By preparing for climate hazards, we can save lives, safeguard local communities, and stimulate economic growth.”
World Bank estimates indicate that climate change adaptation investments yield substantial returns—about $4 in benefits for every $1 invested.
To remain competitive and attract international investments while bolstering energy security, countries in the Western Balkans must also reduce their greenhouse gas emissions. Achieving climate neutrality by 2050 would require an additional $32 billion investment.
Reaching net-zero greenhouse gas emissions by 2050 is feasible if solar, wind, and hydropower can generate over 95 percent of total energy production—up from one-third currently.
Decarbonizing buildings through energy efficiency investments is essential. The transport sector must also transform significantly by reducing vehicle demand and shifting to sustainable modes of transportation and electric vehicles.
A significant portion of funding can come from the private sector. To mobilize private investments effectively, stable regulatory environments and attractive financial markets are necessary.
“Adapting to climate change is key for the countries in the Western Balkans to maximize their potential and spur strong sustainable growth,” said Nicolas Marquier, IFC Regional Manager for the Western Balkans. “For this, private sector participation will be essential. The report outlines a clear and timely pathway to achieving this shift to net zero and ensuring local communities receive economic benefits from this green transition.”
The CCDR outlines several policy recommendations organized into three categories:
- Transversal: Integrating adaptation and mitigation efforts across institutions.
- Transboundary: Enhancing cross-border collaboration on climate risks.
- Targeted: Addressing specific needs of vulnerable communities through education reforms and adoption of climate-smart practices.
The World Bank Group aims to devote 45% of its financing to climate action by 2025. During fiscal years 2023 and 2024 alone it has committed nearly $1.2 billion of climate finance in the Western Balkans.
Country Climate and Development Reports (CCDRs) integrate climate change considerations with development goals. They help prioritize actions that reduce greenhouse gas emissions while boosting adaptation efforts. CCDRs inform governments, citizens, private sectors,and development partners about impactful actions needed for a low-carbon resilient transition.
Contacts:
In Vienna: Filip Kochan (fkochan@worldbank.org)
Belgrade: Gordana Filipovic (gfilipovic@worldbankgroup.org)
Pristina: Lundrim Aliu (laliu1@worldbank.org)
Skopje: Anita Bozinovska (abozinovska@worldbank.org)
Sarajevo: Jasmina Hadzic (jhadzic@worldbank.org)
Tirana: Ana Gjokutaj (agjokutaj@worldbank.org)