Investing in climate resilience and transitioning the economy from fossil fuels to renewables will help Kosovo support its sustainable economic development and protect citizens from natural hazards, according to the World Bank Group¡¯s Country Climate and Development Report for Kosovo, released today.
The report concludes that Kosovo would need to invest an estimated US$2.8 over the next decade to protect people and property from the damaging and escalating impacts of climate change. In the long term, comprehensive adaptation investments represent the equivalent of 1.4 percent of GDP per year until 2050. While the costs of investing in adaptation are undoubtedly high, the costs of inaction are even higher, as are the benefits of action.
¡°Kosovo has made significant improvements in its living standards in the past decade, but these gains have come with some unwanted environmental and health impacts,¡± said Massimiliano Paolucci, World Bank Country Manager for Kosovo and North Macedonia. ¡°Investments in climate actions are expected to bring significant environmental and public health benefits while creating new job opportunities.¡±
By implementing climate adaptation initiatives, Kosovo can enhance human capital development and allow the country¡¯s workforce to improve skills and increase trade opportunities. Investing in adaptation would yield other economic benefits, including in key sectors such as agriculture by safeguarding rural livelihoods or railway and waste sectors where environmental and public health benefits are identified.
Historically reliant on coal due to its rich lignite deposits, Kosovo faces challenges with aging, inefficient lignite-based power plants, as well as deteriorating transport, heating, and residential infrastructure. These factors contribute to environmental degradation and negative health outcomes, highlighting the vulnerability of Kosovars to energy price fluctuations, energy poverty and the high cost of air pollution.
The report emphasizes that accelerating the energy transition to achieve economy-wide net zero emissions in Kosovo by 2050 is feasible, but it will require radical transformation and decisive action on the national and regional level. For example, lignite power plants would need to be phased out and fully decommissioned by 2045, replaced by significant upscaling of wind and solar capacity, complemented by storage and strong regional ties. The private sector will play a critical role in driving this transformation by investing in renewable energy, developing innovative technologies, and fostering partnerships to build a more sustainable energy future.
Commercial banks and firms have much to contribute to supporting both mitigation and adaptation action in Kosovo.
¡°Under a net-zero emissions trajectory for Kosovo, the private sector is expected to play a leading role in decarbonization, contributing about 85 percent of the required investments, particularly in the transport, buildings, and power sectors,¡± said Nicolas Marquier, IFC Regional Manager for the Western Balkans. ¡°To mobilize this capital, it will be crucial to establish an enabling regulatory environment that supports climate focused investments.¡±
The report offers recommendations for policy reforms and investments which focus on what can and should be done in the short term (until 2030), with an eye to laying the groundwork for the scale-up of climate action in subsequent decades.
Download the Kosovo Country Climate and Development Report here.
