Cabo Verde: Urgent climate adaptation needed or GDP will shrink – World Bank

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Cabo Verde: Urgent climate adaptation needed or GDP will shrink – World Bank

12:42 CAT | 16 Jan 2025

FILE - Ribeira Grande Valley, on Santo Antão Island, Cabo Verde. [File photo: Marco Silva / World Bank]

The World Bank warned on Thursday that Cabo Verde must take urgent steps to adapt to climate change or else its gross domestic product will shrink over the next 25 years.

“Without urgent measures, GDP could contract by 3.6 percent by 2050,” said Indira Campos, the World Bank representative in the country, at the presentation in Praia of the Country Climate and Development Report (CCDR) for Cabo Verde.

According to these projections, poverty could also increase by 6.4″, with one in five people in Cabo Verde exposed to the negative effects of climate change.

Most of the damage, Campos said, “would come from the tourism sector” – with a 10% drop in revenue from what is currently the backbone of the archipelago’s economy.

The report suggests a transition from the “sun-and-sea” tourism model to others such as ecotourism, cultural tourism, nautical tourism and sport fishing, which are less susceptible to climate risks, so diversifying the offer that has thus far been concentrated on the islands of Sal and Boa Vista.

Episodes of prolonged cyclical droughts, desertification and extreme rainfall events that cause flash floods, especially in urban areas, are examples of the threats.

Rising sea levels, coastal erosion and the loss of biodiversity and ecosystems are problems that particularly affect beaches and coastal areas, jeopardising the sustainability of the tourism sector.

The CCDR is an “important public policy instrument” according to the World Bank representative, who added that, despite the threats, “Cabo Verde has the potential to turn challenges into opportunities, has shown leadership” on the issue and has set “ambitious goals” for the energy transition.

The document defines a roadmap that recommends “investments in renewable energies and smart agriculture” and other climate-resilient measures.

According to Campos, the archipelago needs $140 million a year, around 6% of GDP, over the next decade to respond to climate and development challenges.

“Innovative partnerships and a favourable business environment are needed to attract private capital,” she added, stressing that climate action could add between 0.4 and 1.0 percentage point to GDP by 2050, in addition to benefits in food security, social protection and quality employment.

Cabo Verde’s minister of agriculture, Gilberto Silva, announced at the ceremony that the government is due to send a climate law to parliament soon, aimed at “consolidating the regulatory and institutional framework” linked to this issue.

The country, he agreed, “needs more resources” to promote investment; he called for an innovative dynamic to attract funding, giving as an example the exchange of public debt for climate investment already agreed with Portugal.

The World Bank’s CCDRs were initially produced for 25 countries and now are being produced for more, with the aim of involving governments, the private sector, academia, think tanks and civil society in the discussion on climate change.

As public documents, they are intended to help frame actions on the development and climate agenda and signal high-impact actions that can attract funding.

In 2023, Portugal committed to being the first participant in Cabo Verde’s climate fund, with €12 million for projects related to strengthening renewable energies.

Also with regard to climate change, the International Monetary Fund is supporting the archipelago with funding of $31.7 million (€29.3 million) under its Resilience and Sustainability Facility (RSF).

Cabo Verde’s prime minister, Ulisses Correia e Silva, has advocated the creation of new funding mechanisms so that small island states can tackle climate change without resorting to budgeted development funds.

He also advocates the use of indices adjusted to the characteristics of Small Island Developing States (SIDS), welcoming the creation of a Multidimensional Vulnerability Index by the United Nations with the ability to adjust eligibility for funding to the reality of the countries.

Source: Lusa