The Western Balkans must invest at least $37bn over the next decade to adequately protect citizens and property from the increasingly harmful effects of climate change, according to a report published by the World Bank on July 17.

The report states that implementing adequate measures to respond to climate change could bring enormous benefits to the Western Balkans. These investments would help to avoid loss of human life, property and productivity, and also stimulate economic growth.

"Absence of action is not an option for the region, as it is already strongly influenced by climate change," the report states. Over the past decade, floods have directly affected 2mn people, with effects expected to worsen due to increasing extreme precipitation.

Forest fires are another growing threat, with over 1,500 recorded in 2021 — a 21% increase over the past decade. Droughts negatively affect agricultural production, and heat waves contribute to air pollution, causing thousands of premature deaths annually in the Western Balkans.

"Climate change is a clear threat to the economic development of the Western Balkans," said Shaoqing Yu, director for the Western Balkans at the World Bank. "The costs of investing in adaptation are significant. However, the good news is that the benefits of these investments are even greater."

World Bank estimates suggest that investments in climate change adaptation yield significant returns, especially in low- and middle-income economies. For every dollar invested, benefits worth about four dollars are realised.

Western Balkan countries need to reduce their greenhouse gas emissions to remain competitive, improve energy security, and attract foreign investment. Achieving climate neutrality by 2050, in line with the European Union's goals, would require an additional investment of $32bn.

The report asserts that it is possible to reduce greenhouse gas emissions to zero by 2050 if solar, wind, and hydropower plants can produce more than 95% of the total energy, a significant increase from the current one-third.

Decarbonising the building sector through energy efficiency investments and transforming the transport sector by reducing vehicle demand, adopting sustainable transport modes, and switching to electric vehicles are also necessary.

The report emphasises that a significant portion of the required funds can come from the private sector. However, to mobilise private investment, Western Balkan countries need to ensure a stable regulatory environment and attractive financial markets.

"Adapting to climate change is crucial for the countries of the Western Balkans to make the most of their potential and foster strong, sustainable development," said Nikola Marchije, regional manager of the International Finance Corporation (IFC) for the Western Balkans.

"The participation of the private sector will be of crucial importance. This report shows a clear and timely path for achieving zero emissions while protecting local communities and achieving economic benefits from this green transition," Marchije said.