BELGRADE, December 17, 2024 -- Serbia can maintain its economic growth and create new jobs if it invests in climate change resilience and decarbonization, according to the World Bank Group's Country Climate and Development Report for Serbia, released today.
The report highlights that Serbia would need to invest $9.5 billion over the next decade to protect people and property from the damaging and escalating impacts of floods, landslides, droughts, heat waves, wildfires, and earthquakes. These investments, equivalent to around 0.5 percent of GDP per year, can help Serbia better control the impacts of climate change on water and energy security, agriculture, transportation and road infrastructure. Without those investments, the country's economy might contract by at least 15 percent from climate related disasters in 2050.
"The benefits that come with those investments will outweigh the cost by far. They will help protect people and property but also pave the way for employment growth, add new skills and create greater trade opportunities, especially in green sectors, for example the manufacturing of electrical equipment for the wind industry," said Nicola Pontara, the World Bank Country Manager for Serbia. "And with an additional investment of $10.4 billion over the next 25 years, Serbia could also achieve its net-zero target in 2050."
Achieving net zero will require phasing out coal and building solar, wind, hydro and natural gas capacity, whilst also electrifying transport and improving energy efficiency across heating and industry. Investing in climate adaptation and a decarbonized economy will both be crucial for the resilient and clean development of Serbia's economy. Moreover, the report found that 85 percent of investments in decarbonizing the economy can come from the private sector with the right regulatory environment.
"Serbia's private sector is positioned to lead the country's transition to a greener economy, driving innovation and investments in renewable energy, energy efficiency, and sustainable development," said Nicolas Marquier, IFC Regional Manager for the Western Balkans. "With the right regulatory framework, these efforts can bridge the climate finance gap and unlock opportunities for a more sustainable future."
The path to climate resilience and a carbon neutral economy requires complex transformations combining investments with further reform of the financial sector to make it more accessible for small enterprises and startups, the development of a green debt market, improvements in education and training, as well as streamlined regulations, greater transparency and less state intervention in various industries.
