WARSAW, November 6, 2024 - Accelerated action on decarbonization can help stimulate economic growth, enhance competitiveness and protect people from the harmful impacts of air pollution, says the World Bank Group's Poland Country Climate and Development Report (CCDR), released today.
As the world's 9th largest coal user, Poland's continued heavy reliance on coal for power and industrial production is already posing severe risks to people and its economy. Poland has the highest number of deaths attributable to air pollution in Europe, at an estimated 40,000 premature deaths per year, and it is the only country on the continent where pollution-related deaths increased between 2015 and 2020. Extreme droughts, meanwhile, are inflicting losses of about $1.4 billion per year, while 600,000 people and $7 billion worth of assets are at risk from flooding every year.
Accelerating decarbonization can deliver huge gains. Achieving the EU target of net zero emissions by 2050 will add a cumulative 4 percent gain in the Gross Domestic Product (GDP). At the same time, the reduction in air pollution brought about by decarbonization will lead to health gains equal to 1.4% of GDP over the same period.
"Poland's prospects of successfully navigating global decarbonization trends are bright. The country's strong manufacturing capabilities and relatively high manufacturing complexity position it well to attract a new wave of investment and expand into growing or new low-carbon lines of production," said Ary Naïm, World Bank Group Country Manager for Poland. "Accelerating Poland's green transition and reaching Net Zero by 2050 will result not only in higher competitiveness and growth, but will also improve air quality for all citizens and boost the climate resilience of the economy.
Achieving Poland's development and climate goals is affordable and within reach, provided the right set of policies and investments are implemented in a timely manner. Decarbonizing the economy by 2050 will require investments of about $450 billion. Given that only less than half of the required investment needs can be filled by domestic and EU resources, mobilizing private capital at scale will be key. This will require deepening the capital markets to address the financing gap; fostering interest of institutional investors in environmental, social and governance issues; and using public-private partnerships to finance low-carbon infrastructure.
A comprehensive transformation of the energy system is crucial to achieving net zero emissions by 2050. This will entail removing barriers to renewable energy expansion, strengthening Poland's transmission and distribution grid, using natural gas as a transition technology, and scaling up electricity trade. Decarbonizing energy supply is also critical to cut the private sector's carbon emissions to maintain competitiveness as global low-carbon efforts accelerate. On the demand side, energy efficiency measures and technology shifts can reduce energy demand by a quarter by 2050 compared to 2019.
Adaptation investments in key sectors, including in climate-resilient infrastructure, are needed to take full advantage of the economic benefits of decarbonization. Production factors will be increasingly vulnerable to climate shocks, especially in unfavorable weather scenarios. Under a pessimistic warming scenario, GDP losses from climate shocks could reach almost 1.2% of GDP in 2050 if no adaptation measures are taken. Resilience investments can however offset these losses almost fully by 2050, with benefits largely outweighing their costs.
Although decarbonization is expected to create about 300,000 jobs in green sectors, including renewables, grid infrastructure, and digitalization, the impacts will vary across sectors, regions, and workers. In just transition regions, both mine workers and employees of the mine-related sectors, as well as their families, will require adequate social protection and labor market policies to ensure a just transition. Targeted support programs will be needed to make sure that low-income and energy poor households are not disproportionately affected by full decarbonization.
Download the Poland Country Climate and Development Report
The World Bank Group's Country Climate and Development Reports (CCDRs) are core diagnostic reports that explore the interlinkages between climate change and development. They help countries prioritize the most impactful actions that can foster a low carbon transition and boost resilience, while delivering on broader development goals. CCDRs build on data and rigorous research and identify main pathways to reduce GHG emissions, their externalities and climate vulnerabilities, including the costs and challenges as well as benefits and opportunities from doing so. The reports suggest concrete, priority actions to support the transition. As public documents, CCDRs aim to inform governments, citizens, the private sector, development partners and all stakeholders engaged with the development and climate agenda. CCDRs feed into other core Bank Group diagnostics, country engagements and operations, and help attract funding and direct financing for high-impact climate action.
