The countries of the Western Balkans will have to invest billions of US dollars in the coming years to protect their populations and assets from the effects of climate change. This is according to the World Bank's new Climate Change and Development Report (CCDR), which was published on Wednesday.

The World Bank’s analysts estimate that at least USD 37 billion will be needed over the next ten years, with a focus on a fundamental shift to renewable energy sources.

The World Bank is actively supporting countries in limiting greenhouse gas emissions and strengthening resilience to extreme weather events.

The goal is to allocate 45% of its financial resources to climate action by 2025, with funds split evenly between climate change mitigation and adaptation. In the 2023 and 2024 fiscal years alone, the World Bank has provided almost 1.2 billion dollars for climate activities in the Western Balkans.

Inaction is not an option

The Bank emphasises that effective action can bring huge benefits to the Western Balkan countries, which include Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Serbia and Montenegro. These investments would help prevent the loss of lives, property and productivity while accelerating economic growth.

Inaction is not an option for the region, the report warns, pointing out that the region is already severely affected by climate change.

Two million people have been directly affected by flooding in the last ten years, and with increasingly extreme rainfall, the consequences are set to worsen. Forest fires are also a growing threat: over 1,500 fires were counted in 2021, an increase of 21% compared to the previous decade. In addition, droughts have a negative impact on agricultural production and heatwaves contribute to air pollution, which causes thousands of premature deaths in the Western Balkans every year.

Decarbonisation and a profound transformation of the transport sector are necessary

Xiaoqing Yu, the World Bank’s Director for the Western Balkans, explained that the necessary investments will bring multiple benefits.

“By preparing for climate hazards, we can save lives, protect local communities and boost economic growth,” Yu said, estimating that every dollar invested in these initiatives returns about four dollars.

Western Balkan countries in particular are expected to reduce their greenhouse gas emissions in order to remain competitive, improve their energy security and attract foreign investment. Achieving climate neutrality by 2050, in line with the European Union’s targets, would require an additional investment of 32 billion dollars.

The World Bank estimates that greenhouse gas emissions could be reduced to zero by 2050 if solar, wind and hydropower plants could generate more than 95% of total energy, well above the current share of one third.

In addition, the decarbonisation of the building sector through investments in energy efficiency and a profound transformation of the transport sector are required.