Montenegro is facing serious climate challenges, including frequent floods, earthquakes, landslides, and increasingly severe droughts, wildfires, and heatwaves. Floods are the most destructive natural hazard in Montenegro, affecting 10,000 people each year and causing an average of $90 million in damages annually. Earthquakes also present a significant risk, impacting 9,000 people annually with average losses amounting to $70 million. These issues disrupt livelihoods and key economic sectors such as agriculture and transport, threatening economic stability. Without timely adaptation measures, these challenges are expected to worsen as climate change progresses.
The report highlights that addressing Montenegro's climate challenges requires substantial investments for risk mitigation and adaptation to evolving conditions. According to the findings, climate-related disasters could reduce Montenegro’s GDP by 7.9% by 2050. To adapt to climate change effectively would require an investment of $5.7 billion over the next decade or so. Such investments would bring significant benefits including damage prevention, accelerated economic growth, and improved social and environmental outcomes.
Investments in urban adaptation strategies like green infrastructure and water management systems are deemed essential for resilience. Nature-based solutions such as floodplain restoration are considered cost-effective while benefiting ecosystems and communities.
To achieve net zero emissions by 2050, Montenegro must transition from coal to renewable energy sources like wind and solar power, supported by hydroelectric power. Enhancing energy efficiency in buildings and industries alongside electrifying heating and transportation are crucial steps forward. The estimated additional investment needed to reach net zero is approximately $235 million by 2050; over 70% of this will be financed by the private sector through green bonds, public-private partnerships, and carbon pricing.
A critical aspect of Montenegro’s green transition is supporting coal-dependent communities through alternative job creation and targeted support to prevent energy poverty. A sustainable growth strategy integrating climate adaptation and mitigation efforts aims to strengthen public sector capacity while enhancing human capital and global competitiveness.