- Ms. Mariam Sherman, Country Director for Myanmar, Cambodia and Laos, World Bank
- Mr. Asad Yaqub, Resident Representative, International Finance Corporation
- H.E. Hem Vanndy, Minister of Ministry of Industry, Science, Technology, and Innovation
- H.E. Thor Chetha, Minister of Ministry of Water Resources and Meteorology
- Ms. Maryam Salim, Country Manager of the World Bank for Cambodia
- Distinguished Panelists
- Colleagues from the World Bank office
- Excellencies from the Government Agencies
- Ladies and Gentlemen
I am very pleased to participate and to provide the keynote address for the launch of the Cambodia Climate and Development Report prepared by the World Bank. Let me first begin by thanking and commending the core team of the World Bank for preparing this very comprehensive Report under the overall direction of Ms. Mona Sur and Mr. Sebastian Eckardt of the East Asia and Pacific Region of the World Bank, and Mr. John Nasir and Mr. Thorma Jacobs of the IFC.
The Report provides impressive analysis, both qualitative and quantitative backed by in-depth and credible research, on the current and projected impacts of climate change on our socioeconomic development up to 2050. It proposes a set of key recommendations on policy priorities for responding to climate change and low carbon transition to achieve sustainable development and our vision of becoming an upper-middle income country by 2030 and high-income country by 2050.
Climate change took center stage at the recently completed G-20 Summit in New Delhi and the subsequent Leaders’ Declaration recognized the need to reduce global greenhouse gas emission by 43% by 2030 (relative to 2019 levels) and that the developing countries need US$ 5.8-5.9 trillion in the pre-2030 period, in particular to implement their NDCs, as well as US$ 4 trillion annually for clean energy technologies by 2030 to reach net zero by 2050.
Cambodia, on its part, is committed to honor the climate pledges in its Nationally Determined Contribution and implement its Long-Term Strategy for Carbon Neutrality to reduce emissions by 41% by 2030 and achieve neutrality by 2050. The new Pentagon Strategy for Growth, Employment, Equity, Efficiency, and Sustainability recognizes the critical importance of addressing climate change and has introduced resilient, sustainable, and inclusive development as one of the 5 Pentagons and sustainable socio-economic development and building resilience to climate change as one of the 5 strategic objectives under the Strategy.
While transition of green and low carbon development is our long-term objective, I must point out that our pathway to achieving this will be gradual and balanced with Cambodia’s competitiveness and sustainable economic growth.
I note that the World Bank Task Team will be making a presentation of the Report in a separate session and hence I will not dwell too deeply into the findings and recommendations but would like to highlight a few observations.
We tend to focus more on the addressing the physical risks posed by high temperatures and increased severity and frequency of natural disasters in Cambodia. There is another very crucial dimension of the impacts of climate change which tends to take a back seat. As the Report points out, we live in a highly globally integrated economy and the global response to climate change will have ripple effects on Cambodia’s trade, investments, financing, and technology costs. We, as policy makers, will need to recognize and put more emphasis on this aspect and look at adjusting trade and investment policies to capitalize on low carbon transition to diversify exports and upgrade manufacturing.
The Report quantifies some of the key impacts which provides an insight into the gravity of the situation, The average annual losses of physical and economic assets from floods is projected to increase between US$3.3 billion (low scenario) and US$10.6 billion (high scenario) in 2050 from the US$0.5 billion in 2020. Crop yields will decline between 21% and 30% by 2030-60; Tourism between 8% and 17% by 2050; and labor productivity between 8% and 20% by 2050. The macroeconomic modeling carried out by the World Bank Team suggests that these will lower the GDP by up to 9.4% in 2050.
Overall, an incremental investment of US $36 billion will be required from 2023 to 2050 to address the measures identified in the Report comprising of about US 20.1 billion for adaptation and resilience and about $15.4 billion for mitigation measures representing 1.7% of the GDP. I must emphasis that this is the incremental meaning additional costs for achieving resilience and carbon neutrality. These added costs will put tremendous pressure on our fiscal space and pose a huge financing challenge for us.
Cambodia is one of lowest emitters of Greenhouse Gas with its share of global emissions of only 0.14 %. Our per capita Greenhouse Gas emissions is 4.3 tons of carbon dioxide equivalent which is lower than all our neighboring countries except for Philippines and under half of the OECD average of 10.8. Yet, it remains one of the most vulnerable countries prone to disasters from floods, droughts, cyclones, and heat waves. It would be an injustice and unfair to Cambodia to bear the burden of the incremental costs for adaptation and mitigation measure. The developed economies will need to bear a large share of these costs, and in this regard, we are looking to our development partners for mobilizing grants, Technical Assistance, highly concessional loans, and private sector financing.
The Report concludes with three key priorities to steer the Cambodian economy onto a more climate-compatible development path centered around 3 Rs namely Reduce exposure and vulnerability to climate change; Realign the economy to seize new opportunities; and Re-orient the emissions trajectory and recommends the implementation of 7 policy packages to achieve the 3 Rs with many actions.
We all look forward to the Panel Discussions by the 5 distinguished panelists which no doubt will focus on broader policy issues and the key recommendations.
I think this is a first such Cambodia-specific report on climate change and development that provides quantification of some of the key climate change impacts. It will be very useful and serve as an excellent reference for our policy makers in acquiring a more comprehensive appreciation of the impacts of climate impacts and the real challenges we face. The recommendations could be the starting point for the Government’s consideration as we formulate the policies and actions for the pathway to Cambodia’s transition to low carbon development. I understand that the Report will inform the preparation of the new Country Partnership Framework which will provide another opportunity for the Government to discuss the recommendations in greater detail.
In conclusion, I thank the World Bank for arranging this event and wish you all a very informative and constructive dialogue on the findings and recommendations of the Report.