Economy December 4, 2023 - 6:11 pm

Fostering Economic Growth and Poverty Alleviation in the Dominican Republic through Climate Action

Santo Domingo.- World Bank Report Highlights Dominican Republic’s Climate Action Potential for Economic Growth and Poverty Reduction

Today, the World Bank released a report emphasizing the transformative potential of climate action in driving economic growth and reducing poverty levels in the Dominican Republic. To achieve its ambitious goal of achieving net-zero emissions by 2050, the Dominican Republic must undertake more ambitious mitigation and decarbonization efforts across all sectors of its economy. This includes implementing strategies to reduce pollution, safeguard biodiversity, bolster public health, and create green employment opportunities in key sectors like agriculture, energy, and tourism.

The Country Climate and Development Report (CCDR) for the Dominican Republic, part of the World Bank Group, underscores the risk that projected climate change impacts pose to the nation’s development achievements. By 2050, climate change is expected to exert a significant toll on public health, infrastructure, and natural ecosystems, including forests and coastal areas. Crop yields may decline by as much as 30 percent, and poverty rates could rise. Without adaptation measures, the country could potentially lose up to 16.7% of its GDP compared to a scenario without climate change impacts. This would be primarily driven by reduced tourism demand, an increase in tropical storms and flooding, and diminished labor productivity due to rising temperatures caused by climate change.

The report highlights that the Dominican Republic can align its climate and development goals, benefiting both its citizens and the economy, despite the substantial financial requirements.

Alexandria Valerio, the World Bank Representative for the Dominican Republic, stated, “The Dominican Republic’s 2030 Vision places climate and development at its core, with a strong focus on carbon neutrality, mitigating the economic and fiscal impacts of climate change, safeguarding critical infrastructure, and securing a better future for its people. The World Bank remains committed to supporting the country’s efforts to enhance economic resilience, reduce vulnerability, and expedite the decarbonization of its economy.”

Given that electricity constitutes the largest source of emissions in the country, the report recommends adopting measures for a low-carbon development trajectory. These measures include replacing coal-based power generation, investing in renewable energy sources, and decarbonizing transportation and industrial processes. The report also suggests improving practices in agriculture, forestry, and land use, as well as reducing emissions in the waste sector.

Carolina Cárdenas, Resident Representative for the Dominican Republic and Haiti at the International Finance Corporation (IFC), the private sector arm of the World Bank Group, emphasized, “The private sector plays a pivotal role in the Dominican Republic’s coordinated transition toward a more resilient, inclusive, and low-carbon future. In line with this, IFC is actively supporting the development of the country’s green taxonomy, a framework designed to assist investors and companies in making informed decisions regarding sustainable economic activities using standardized terminology.”

Private capital will be indispensable in meeting the Dominican Republic’s climate financing requirements. This will involve leveraging the new Private Public Partnership framework for investments in infrastructure and tourism, exploring available catastrophe credit lines and bonds, increasing insurance coverage in agriculture, developing affordable microinsurance products for low-income households, and promoting greater utilization of technology in risk assessment.

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