The Country Climate and Development Report (CCDR) for Croatia explores the intertwined climate and development challenges, putting forward priority areas for mitigation and adaptation and resilience to achieve a low-carbon, climate-resilient, and inclusive growth path. By investing in resilience, including renewable energy, Croatia can unlock new job opportunities, protect its people, create a healthier environment, and ensure a more sustainable future for all.
The CCDR finds that adding more renewable sources of energy and strengthening resilience can deliver strong development results, including increased economic growth and positive long-term outcomes for equity. Compared to current levels, Croatia needs to invest about an additional 1.1 percent of its GDP to reach its lower carbon emissions goals. This is a financially achievable effort shared between public and private sectors. To create investment opportunities that can mobilize private investment and create growth, increased policy coordination, clearer policy signals, and the removal of regulatory and administrative hurdles are required.
At the same time, Croatia is facing intensifying climate risks—hotter summers, more frequent droughts and floods, and rising coastal vulnerabilities—that already affect people’s well‑being and key sectors such as agriculture and infrastructure. These risks are expected to increase over time. Without additional action, just the selected climate events the CCDR models could reduce GDP by up to 2.1 percent by 2050, with particular impacts on infrastructure, tourism, and agriculture. In contrast, targeted investments amounting to a relatively modest 0.04 percent of GDP could more than halve these impacts or even fully offset the losses outside of the tourism sector. Additional investments, especially in water security, urban heat, and disaster risk management would further protect lives, well-being, and infrastructure, and reduce losses from climate shocks.
With stronger governance, predictable policies, and social support, Croatia can advance on a resilient, inclusive, low‑carbon growth path and sustain convergence with the European Union (EU).
Key Findings
Investing in resilience and adaptation, including renewable energy, can deliver strong development dividends for Croatia. These include faster and more resilient growth, increased productivity, greater competitiveness, new jobs and export opportunities, increased energy security, and cleaner air.
On the other hand, delays can be costly and manifest themselves in higher disaster losses, stranded assets, missed EU targets and resulting payment outflows for emission allowances, that can lead to rising fiscal and competitiveness risks.
Strengthening adaptation is an opportunity for Croatia to restructure its economy, secure climate resilience, and achieve low-carbon growth that will allow the country to sustain income convergence with the rest of the EU.
Place-based adaptation is critical to protect people, productivity, and infrastructure from climate hazards such as floods, droughts, and heat waves. Prioritizing urban heat resilience in the country with Europe’s highest urban heat mortality rates, as well as water security, agricultural resilience, and disaster risk management is essential.
Slightly more than half of the required investment for the climate transition could come from the private sector, but significant capital is being held up by regulatory and administrative bottlenecks.
Success hinges on stronger governance and institutions, removal of regulatory and administrative hurdles, strengthening of predictable policy signals, private sector participation, skills development, and social support for a just transition.
Recommendations
Investing in renewable energy
Facilitate private investment in renewables to add 850 MW of new capacity annually through 2050, primarily by streamlining administrative procedures.
Increase more than threefold building energy efficiency upgrades and heating renovations by improving institutional and workforce capacity, streamlining financing, and removing market barriers.
Accelerate zero-emission transport by reforming vehicle taxes, expanding public charging, supporting fleet electrification, and improving transport systems.
Protection of people and firms from climate impacts
Invest in water infrastructure and management to enhance drought resilience, which requires improved conditions for utility investments, boosting capacity, implementing National Loss Reduction Action Plans, and making coastal areas more resilient by managing demand and using water efficiently. Strengthen water monitoring and cooperation with neighboring regions to improve planning for climate variability.
Strengthen disaster risk management by improving laws, funding and data, as well as integrating resilience into infrastructure, and empowering local communities.
Reduce urban heat risks by integrating green infrastructure, adaptive planning, and heat-health measures, focusing on vulnerable groups.
Opportunities for growth and jobs
Implement an efficient Social Climate Plan, supporting transitions to green jobs, and strengthening social protection systems.
Expand climate finance by mobilizing banks, capital markets, and institutional investors while promoting insurance innovation and PPPs in climate-relevant sectors.
Strengthen State Owned Enterprises’ governance and align strategies with national climate goals.
Essential conditions for success
Enhance climate governance through stronger coordination, strategic planning, institutional capacity, and inclusive public engagement.
Strengthen public-private coordination and help firms access funding, meet sustainability standards, and invest in climate-aligned projects.
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