Full decarbonisation of Polish economy by 2050 would require USD 449 bln in investment - WB
Full decarbonisation by 2050 would require a total investment of USD 449 billion, equivalent to 4.5 percent of GDP over the next 25 years, wrote the World Bank in its latest Country Climate and Development Report on Poland (CCDR).
"Decarbonising the economy by 2050 will require total cumulative investments of USD 105 billion in the power sector and USD 449 billion overall—that is, in transport, buildings, industry, agriculture, and forestry—equivalent to 1.1 percent and 4.5 percent of GDP over the next 25 years, respectively," the bank wrote in the report.
However, it added that more than 90 percent of these capital expenditures are due to already existing needs to modernise aging power plants and buildings, as well as to replace inefficient industrial installations and transport fleets.
"The incremental CAPEX investment costs of achieving NZ2050 compared to current policies are only USD 28 billion over a quarter century, or 0.3 percent of cumulative GDP over the period," the bank wrote.
It was pointed out that a large part of the investment gap can be filled through private investment.
"Poland can leverage substantial EU funding but it is estimated that up to 56 percent of the required investment for a resilient net zero pathway will come from the private Country Climate and Development Report: Poland
62 sector," the World Bank analysts assessed.
"Mobilizing public and private finance hinges on establishing appropriate institutional and governance frameworks and incentives while enabling the financial sector to efficiently allocate capital toward the transition," they added.
In their view, in order to decarbonise, Poland must also increase its portfolio of green financial products.
"Poland has the lowest share of sustainable funds of all the EU countries, accounting for 1 percent of the value of all Polish funds’ assets at end-2022 compared to 47.5 percent for the EU," it was written.
In addition to EU funds, the bank pointed out that sources of support for Polish climate investments could include foreign direct investment and engaging the private sector through public-private partnerships.
"Fostering cooperation between state-owned companies and private companies can also contribute to accelerating decarbonisation," it noted.
At the same time, the World Bank stressed that both the agricultural sector and the economy as a whole will be increasingly vulnerable to losses from climate change, including from floods and droughts, which can threaten food and energy security.
"Failure to invest in climate change adaptation could mean a 1.2 percent reduction in GDP by 2050," the bank estimated.
"However, relatively small investments in increasing climate resilience (of about 0.1 percent of GDP) in sectors such as agriculture, water, forestry and transport over the coming 25 years could almost completely offset the costs of climate shocks by 2050, and could halve them by 2040," it added.
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