YEREVAN, November 8, 2024 –Armenia can enhance energy security, protect its people from the harmful effects of pollution, and ensure more sustainable growth with effective action to tackle climate change, finds the World Bank Group's Armenia Country Climate and Development Report (CCDR), released Contact online >>
YEREVAN, November 8, 2024 –Armenia can enhance energy security, protect its people from the harmful effects of pollution, and ensure more sustainable growth with effective action to tackle climate change, finds the World Bank Group''s Armenia Country Climate and Development Report (CCDR), released today.
Armenia is highly vulnerable to the adverse impacts of climate change, particularly floods, droughts, heat stress, hail, and landslides. Its economy is highly energy-intensive and reliant on fossil fuels, contributing to acute environmental problems, including air pollution. The country ranks among the lowest in Europe in terms of air quality. The annual costs of the damage of pollution to the health of Armenia''s citizens are estimated to be as high as 10.6% of GDP.
The CCDR finds that the cost of inaction is high. The impact of climate change on the water and agriculture sectors alone could shrink Armenia''s economy by up to 3% by 2060 and increase poverty by as much as 2.7 percentage points by 2030. Investments to reduce the impacts of climate damage would, in contrast, expand the economy by 0.5-1% per year.
The country has long relied on natural gas imports to power its cities and industries, heat its homes, and fuel its transportation. Natural gas represents 63% of the country''s total energy supply, one of the largest shares in the world. The energy sector also accounts for two-thirds of Armenia''s greenhouse gas emissions (GHG).
The CCDR finds that decarbonizing the energy sector is more affordable than sticking with imported gas. This is because fossil fuels have hidden costs that go beyond just their market price, such as increased healthcare costs, reductions in productivity, and degradation of natural resources.
"Investing in effective climate action offers Armenia an opportunity to create new growth drivers and quality jobs. Faster decarbonization can strengthen Armenia''s energy independence while lowering the cost of energy to the economy," said Carolin Geginat, World Bank Country Manager for Armenia.
Armenia also faces a high level of water stress, with over-extraction in areas like the Ararat Valley and Lake Sevan threatening both agriculture and drinking supplies. In addition, transboundary water flows, which account for up to 35% of Armenia''s water source, are declining due to climate change and intensified human activities, such as dam construction and water diversion, in upstream countries. Water plays a key role in Armenia''s economy with a quarter of all jobs in the agriculture sector. It is also essential for electricity production (hydropower) and metals and mineral production, which make up more than a third of all exports.
Targeted investments of about $8 billion[1] up to 2060, complemented by policy reforms, can help Armenia enhance energy security through clean, domestic energy; boost agriculture productivity, improve food security, and strengthen resilience against climate change. The report estimates that with the right set of policy reforms approximately 75% of the targeted investment could be financed by the private sector.
"We see a vital role for private investment in solar, energy storage, critical infrastructure, and enhancing agricultural resilience. Climate-focused public-private partnerships can serve as a catalyst for low-carbon and resilient infrastructure. Armenia has a strong track record of attracting private capital in the energy sector and can leverage this experience to attract private investment to other sectors" said Ivana Fernandes Duarte, Regional Manager for the South Caucasus, at the International Finance Corporation.
The report highlights two main priority areas that can put Armenia on a path to sustainable long-term growth:
In addition, the report stresses the importance of key reforms to enable these transformations:
*This press release has been updated to reflect a revision related to energy investments.
Armenia, a mountainous, landlocked country in the South Caucasus, is one of the most vulnerable countries in Europe and Central Asia to climate change. The nation''s average temperature has risen by more than 1.2°C since 1929, and changing climatic patterns have caused the degradation of important landscapes, including watersheds and wetlands.
In the face of those challenges, Armenia has launched an ambitious effort to adapt to climate change and cut domestic greenhouse gas emissions, which fuel the climate crisis.
The United Nations Environment Programme (UNEP) recently spoke with Armenia''s Deputy Environment Minister, Gayane Gabrielyan, about those plans and how the country is preparing for a new climate normal.
How is Armenia addressing its environmental challenges, including the climate crisis?
Gayane Gabrielyan (GG) : Armenia is among the most vulnerable countries to climate change in the Europe and Central Asia region. Reducing Armenia''s vulnerability to climate change requires greater investments and greater integration of both climate change adaptation and disaster risk reduction. In this regard, the Government of Armenia is mainstreaming and integrating climate crisis considerations into national and sectoral development policies.
In 2016 the government began discussing the National Adaptation Plan process by conducting national consultations and undertaking a rapid stocktaking exercise. The stocktaking provides a qualitative assessment of the institutional framework and capacities relevant to the process. With financing from the Green Climate Fund, the Government of Armenia is in the process of developing a national plan for climate change adaptation.
How is Armenia incorporating environmental issues into its policymaking?
GG: The government has been mainstreaming and integrating climate change considerations into national and sectoral development policies. As such, the implementation of energy efficiency measures and the introduction of renewable energy sources are high priorities, contributing also to economic and social goals.
Among the examples of our policy are the approval of the National Action Program of Adaptation to Climate Change and the adoption of the updated Nationally Determined Contributions 2021-2030 under the Paris Agreement, which sets the new unconditional mitigation target of a 40 per cent reduction below 1990 emissions levels by 2030. Within the government, a special inter-agency council was established to effectively streamline and elevate climate-related decision processes.
Moreover, according to the Government Action plan for 2021 to 2026, the sector-specific policy will fundamentally be aimed at raising Armenia''s resilience to climate change by introducing best practices of adaptation, by actively participating in the global efforts for low carbon development and by fulfilling international commitments on climate change mitigation.
The transition to climate neutrality is at the core of Armenia''s energy independence, energy security and green growth policies. Our long-term goal is to achieve climate neutrality in the second half of this century.
How important is global cooperation in tackling the climate crisis?
GG: I think everyone across the world acknowledges that this is an absolutely decisive decade ahead in which we have to prove ourselves with the aim of preserving our shared future and common home. We can keep the goal of limiting global warming to 1.5°C and a low-carbon future only if we come together and commit to doing our part with strong determination and ambition.
The threat of climate change knows no borders. Every country has a unique experience to share in terms of identifying and tackling the problem in an effective way. Sharing this experience is always beneficial.
GG: We are party to 10 Multilateral Environmental Agreements administered by UNEP, and within these frameworks, actively involved in global and regional initiatives and processes.
The reports, reviews, outlooks and other sectoral documents developed within the UNEP initiatives are an introductory basis for the formulation of national environmental policies and allow Armenia, as a developing country, to learn from the experience of partner countries, as well as obtain information on the best available tools and policies. The direct and indirect support received by Armenia from UNEP has an important role in shaping the environmental agenda and reforms implemented in the country''s environmental sector.
Armenia pays its full share to UNEP''s Environment Fund, thereby providing crucial support to UNEP''s work in helping countries address the triple planetary crisis. What motivates you to provide core funding to UNEP?
GG: Considering the effective participation of Armenia in the processes carried out within UNEP, it is obvious that responsible payments from all countries are necessary for the effective functioning of UNEP and its implementation of core activities. Armenia reaffirms the importance of further strengthening and scaling up cooperation for the implementation of the ambitious environment and climate crisis agenda.
Energy is responsible for the majority of climate change-causing greenhouse gas emissions, mostly from the burning of fossil fuels. Despite efforts to reduce these emissions, the trajectory of CO2 emissions globally remains far higher than what is needed to avoid the worst effects of climate change.
Note that numbers shown below refer to CO2 emissions from fuel combustion in the energy sector. They do not include other important sources of energy-related greenhouse gas emissions such as methane leaks from oil and gas operations, which are more difficult to measure. The Greenhouse Gas Emissions from Energy Data Explorer has more complete estimates for most countries and regions.
Per-capita energy-related CO2 emissions tend to be higher in more economically-developed countries, but can also vary greatly depending on the structure of the economy and the energy system. For example, per-capita emissions will be higher in countries that rely more on carbon-intensive modes of transportation (like driving and flying), have a higher share of energy-intensive industries (like steel or chemicals) or depend heavily on fossil fuels for power generation.
The vast majority of CO2 emissions in the energy sector come from the burning of fossil fuels such as coal, oil and natural gas for power generation or to fuel vehicles and machines.
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