Background
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Key Findings
- BiH faces significant risks from natural hazards like floods, wildfires, and heat waves, leading to major economic and social impacts. The 2014 floods alone affected one million people and caused damages equivalent to 15% of GDP. Climate-related damages could reduce GDP by up to 14% by 2050 without adaptation. To mitigate these risks, BiH needs $6.8 billion in adaptation investments, mostly frontloaded within the coming decade, yielding high economic and social returns.
- Achieving net-zero emissions by 2050 will require major shifts, particularly in the energy sector, including replacing lignite coal generation with solar PV and wind, enhancing energy efficiency, and transitioning to cleaner energy sources in transport, heating and industry. This transition will require $5.8 billion in investments by 2050, with minimal impact on GDP. The private sector is expected to fund a significant portion of the decarbonization efforts, especially in transport, buildings, and power.
- To support these ambitious climate goals, BiH needs to expand its green debt market. Developing a sustainable finance framework aligned with EU standards will attract scalable green investment. Partnerships and access to international climate funds, like the Green Climate Fund, will be essential for funding climate projects, which could include collaborative projects in municipal services, like district heating pilot initiatives.
- To ensure a fair transition, BiH should address the social impacts of net-zero, including potential household cost increases. Targeted government support and careful planning are necessary to protect low-income households and prevent worsening energy poverty.
Recommendations
The CCDR outlines key recommendations for actions to be taken in the short term (through 2030) to build a strong foundation for expanding climate efforts in the future. These recommendations focus on critical areas: boosting resilience and adaptation, advancing decarbonization and mitigation, establishing supportive macroeconomic policies and financing, and improving institutional and regulatory frameworks to support effective climate action.