Poland will need to invest around $450 billion to decarbonize its economy by 2050, according to a new World Bank report. The shift away from coal and other high-emission industries comes with hefty costs but could also deliver significant economic benefits in the long term, according to a Reuters report.
Boost to GDP Despite High Investment Costs
The World Bank’s analysis suggests that decarbonizing Poland’s economy could lead to a 4% increase in GDP by 2050. By achieving net-zero emissions, Poland could see average GDP growth of 0.2% annually over the next 25 years, compared to current policies.
In addition to economic growth, the shift to cleaner energy would improve public health, with benefits worth 1.4% of GDP due to reduced air pollution.
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The Heavy Toll of Coal
Poland’s reliance on coal has long been a major contributor to both its economic structure and environmental challenges. The World Bank stresses that the continued use of coal poses severe risks to Poland’s economy, public health, and environment. It is the highest contributor to deaths linked to air pollution in Europe, and the country ranks as the world’s ninth-largest coal consumer.
Extreme Weather and Economic Risks
Poland is also facing escalating climate risks, with extreme weather events like droughts already costing the economy about $1.4 billion annually. Flooding threatens around $7 billion in assets each year, affecting more than 600,000 people. The World Bank’s report underscores that these environmental risks could worsen unless significant investments are made to shift away from fossil fuels.
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Private and EU Funding Needed
The World Bank notes that to meet the decarbonization goals, Poland will require more than just domestic resources, according to a Reuters report.
Private investment will be crucial to supplement EU funding and meet the $450 billion target. Without a concerted financial effort, the transition could be difficult, but the long-term benefits of a cleaner, healthier economy could outweigh the initial costs.