World Bank Warns of Climate Change Threats to Maldives' Economy

MALE, September 17, 2024 - A new World Bank report released today highlights the severe risks posed by climate change to the Maldives' economy, particularly its vital tourism and fisheries sectors. The Maldives Country Climate and Development Report (CCDR) paints a stark picture of the challenges facing the island nation and calls for urgent adaptation measures.

Key findings of the report include:

1. Tourism and fisheries, which account for nearly half of the Maldives' GDP and employment, are under significant threat from climate change impacts.

2. Coral reefs, crucial for beach formation, coastal protection, and tourism, are degrading rapidly. The report projects that almost all coral cover could disappear if global temperatures rise above 2°C.

3. Sea-level rise could lead to coastal flooding, potentially damaging up to 3.3 percent of the country's total assets by 2050, resulting in losses of US$0.7–1.1 billion of GDP.

4. Fisheries could see a decline in fish catch ranging from 17 to 100 percent by the end of the century, depending on emission scenarios.

5. Over 90 percent of surveyed resorts report beach erosion, and 60 percent have suffered infrastructure damage.

The report emphasizes the need for immediate action, outlining six key objectives:

1. Building fiscal and external buffers to ensure macroeconomic stability and finance climate action.

2. Mobilizing climate finance through new and existing channels.

3. Enhancing the climate resilience of islands and infrastructure.

4. Protecting and preserving marine ecosystems.

5. Strengthening the resilience of livelihoods, particularly in fisheries and tourism.

6. Unlocking development benefits from green transitions in key sectors.

David Sislen, World Bank Country Director for Maldives, Nepal, and Sri Lanka, stated, "The Maldives is at a critical juncture where the impacts of climate change and ongoing economic challenges converge. The CCDR outlines a pathway for the country to not only safeguard its natural assets but also to build a more resilient and sustainable economy."

The report estimates that adaptation to rising sea levels and related flooding alone will require investments of $2 to $4 billion. It calls for policy reforms, exploration of concessional financing, carbon markets, and expanded public-private partnerships to meet these financing needs.

As the Maldives grapples with these challenges, the World Bank Group has pledged its support to help the country navigate its path towards green and climate-resilient growth.