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Türkiye is famed for being at a geographical crossroad, home to the literal bridge between Europe and Asia. It also faces a climate crossroad: either continue on a business-as-usual pathway with increasing climate vulnerability and reduced efficiencies in energy, transport and other key sectors; or undertake a resilient, net-zero transition which would deliver significant economic, social, and environmental benefits. In our new Country Climate and Development Report for Türkiye – the first such report for the World Bank Group - we find that the economic benefits of its net-zero transition could be as much as $146 billion by 2040 for the country.
What will it take?
Türkiye could reap significant benefits from climate action – both adaptation and mitigation – over the short and longer term, ranging from making the economy more resilient to climate impacts and decarbonization trends, as well as by unlocking opportunities from green products and technology upgrades, cleaner air and water, and cities where people can move, breathe and be productive.
In order to reach Türkiye's 2053 net zero target, the country will need to undertake deep decarbonization of the power sector, improve energy efficiency and electrification in buildings and transport, and reduce emissions from land use , as well as in other sectors, including industry and waste management.
Some of the key sectoral transformations are:
- The power sector: Electricity is the largest contributor to Türkiye’s emissions today and a clean electricity grid will be at the heart of efforts to reduce emissions in buildings, transport, and industry. To achieve this, Türkiye will have to retire most of its coal power plants by 2040, build no new coal plants, and replace energy with cleaner, affordable and reliable alternatives. This is possible at a low cost: today, new solar and wind are the cheapest way to meet most future power demand. At the same time, significant investments will be needed in battery storage and grid services. We estimate that the economic value of stranded assets to be approximately $4 billion, given that more than 65% of Türkiyes coal fleet is less than 20 years old. A comprehensive compensation strategy will be essential to salvaging assets where possible and securing a just transition for affected communities.
- Buildings: Türkiye’s building stock is estimated to grow from 9.9 million buildings in 2020 to 17 million by 2050. Energy efficient buildings and sustainable heating and cooling systems will not only reduce energy bills for families and businesses, but also improve health outcomes and improve quality of life. These could also be staggered: for instance, making immediate improvements in energy efficiency buildings can deliver benefits and boost overall decarbonization, while delaying the electrification of heating until 2030, can reduce overall costs. There is also a significant opportunity to combine energy efficiency and earthquake resistance to save lives and cut construction and retrofitting costs.
- Transport: A range of different policy options will be needed to reduce emissions from transport from adopting electric cars, trucks, and trains, zero-carbon aviation, maritime, and pipeline transport, and multidimensional support of public transport and rail. Take freight for instance: in 2019, only 4% of freight was transported by rail, compared to 17% in the EU – signaling that there is much room to grow but it will require improving last-mile rail connectivity to and from manufacturing facilities and industrial zones to ports or other logistics clusters. But doing so would not only reduce emissions and congestion, it would also reduce logistics costs and help Türkiye’s industrial sector grow. At the same time, trucking will remain the dominant mode of transportation, so increasing the efficiency of trucking operations will also be key.
- Adaptation needs: Adaptation needs also cut across the power, building and transport sectors: unreliable power and water supply costs the Turkish economy 2.2 percent of GDP per year, and without action, these costs will rise. In fact, Türkiye has a higher-than-average vulnerability to climate impacts. There has been much progress made in assessing climate and disaster risks, including at regional and water basin levels, with the Turkish State Meteorological Service and State Hydraulic Works’ robust hydromet database and new modeling capability. But more is possible to meet adaptation needs and boost resilience, including expanding public access to climate and disaster information and systematically identifying and assessing the risks posed by climate change to its most vulnerable communities, and addressing these.
Türkiye could reap significant benefits from climate action – both adaptation and mitigation – over the short and longer term, ranging from making the economy more resilient to climate impacts and decarbonization trends, as well as by unlocking opportunities from green products and technology upgrades, cleaner air and water, and cities where people can move, breathe and be productive.
The CCDRs analytics indicate which actions are needed most urgently to help prioritize decision-making and investments today that can shape development paths well into the future. By quantifying the investments needed to enable these transformations and their impacts on economic costs and welfare, the report shows that climate action – and achieving the country’s objective to achieve net zero emission by 2050 – can achieve a number of positive outcomes. It can increase economic growth, have a positive impact on overall employment, help the country upgrade to the best available technologies, and offer opportunities to protect and expand Türkiye’s exports, even as trade rules change to penalize carbon emissions. In short, well-designed and well-implemented climate action can ease Türkiye’s transition to high-income status.
Why a new climate and development diagnostic?
Countries around the world are facing a dual challenge: The impacts of climate change are clearly visible. At the same time, development goals such as ending poverty and expanding energy access are still unmet and the world is going through a series of health, economic, and geopolitical crises. To make informed decisions about the future, each country needs to understand the risks it will face from climate change and natural hazards , how it can reduce them, and the opportunities it will have to invest in low-carbon, resilient growth.
To that end, CCDRs are a new diagnostic to guide these important decisions. They start from countries’ own development priorities and climate commitments to identify the most effective actions countries can take to address climate and development goals together. They also assess how climate risks affect people, and ways in which governments can build resilience in people and the economy. For countries to thrive, people need to be at the center of economic transformation because people will determine the success and sustainability of any climate-focused policy or transition . They need to acquire the education and skills for the jobs that will be created as new technologies and industries evolve. They also need to be protected from the negative impacts of climate change.
Early lessons from this first report for Türkiye suggest that there are significant opportunities for greener, more resilient and inclusive development but that it requires a clear understanding of the challenges and the trade-offs, as well as sound policy guidance backed by strong data to help guide critical investments. Türkiye’s CCDR can help other countries that are at similar crossroads on the investments they need to make today to ensure better climate and better development tomorrow.
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