World Bank Warns of USD12 Billion Shortfall in Nature and Climate Finance

In a recently released report, the World Bank has underlined crucial recommendations for the Maldives aimed at safeguarding its natural resources. According to the report, a major concern includes a significant shortfall in nature and climate finance, estimated at $12 billion, with only $1.6 billion secured since 2015.

“To enhance climate resilience, the implementation of robust natural capital accounting policies is crucial to explore alternative financing avenues and access essential climate finance, particularly given the high levels of debt distress in the Maldives,” said World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos.

- Advertisement -

Stressing the importance of healthy marine and coastal ecosystems for Maldives economic growth, Hadad-Zervos adds “Addressing issues such as coastal development, pollution, and natural resource management is crucial to fostering a sustainable blue economy that generates employment and prosperity,” 

With the Maldivian economy and job market heavily reliant on the tourism and fisheries sectors, accounting for approximately 50 percent of GDP and employment, the report highlights the critical dependence on natural resources such as marine ecosystems, coral reefs, and coastal areas. Coral reefs, in particular, play a vital role in climate resilience, with their degradation posing a significant threat, potentially resulting in annual flood damage equivalent to about 8 percent of the nation’s GDP.

Dr. Muaviyath Mohamed, Minister of State for the Ministry of Climate Change, Environment and Energy, remarked, “The Maldives is a nation deeply intertwined with its natural resources, yet our economic strategies have often undervalued our marine and coastal ecosystems. However, there is a growing shift towards a sustainable Blue Economy, focusing on nature-based solutions for coastal protection, enhanced waste management, expansion of protected areas, and improved data collection and strategic planning.”

The CEA outlines that while the Maldives has made significant strides in economic and human development, this progress has exerted considerable strain on natural resources due to unsustainable coastal development, pollution, resource overexploitation, and the impacts of climate change.

The report advocates for bolstering the Maldives’ environmental governance through enhanced monitoring, national planning, and institutional capacity building. Other recommendations include the conservation of biodiversity-rich areas, sustainable coastal protection measures, improved pollution management, and the promotion of sustainable practices within the tourism and fisheries sectors. Additionally, the CEA highlights the underutilization of nature-based solutions for coastal defense, such as coral reef or mangrove restoration, which could offer cost-effective climate adaptation strategies.

The Country Environmental Analysis (CEA) evaluates the environmental and climate-related obstacles hindering the Maldives’ progress and proposes a comprehensive set of guidelines for a sustainable and resilient future.

Developed through extensive collaboration with the Maldivian government, civil society, academia, and international development partners, the CEA will be followed by the Maldives Country Climate and Development Report.

- Advertisement -