WESTERN AND CENTRAL AFRICA CÔTE D'IVOIRE World Bank Group COUNTRY CLIMATE AND DEVELOPMENT REPORT October 2023 © 2023 The World Bank Group 1818 H Street NW, Washington, DC 20433 Telephone: 202‑473‑1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank Group with external contributions. “The World Bank Group” refers to the legally separate organizations of the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank Group does not guarantee the accuracy, reliability or completeness of the content included in this work, or the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the organizations of the World Bank Group, their respective Boards of Executive Directors, and the governments they represent. The contents of this work are intended for general informational purposes only and are not intended to constitute legal, securities, or investment advice, an opinion regarding the appropriateness of any investment, or a solicitation of any type. Some of the organizations of the World Bank Group or their affiliates may have an investment in, provide other advice or services to, or otherwise have a financial interest in, certain of the companies and parties named herein. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of any of the organizations of The World Bank Group, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank Group encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given and all further permissions that may be required for such use (as noted herein) are acquired. The World Bank Group does not warrant that the content contained in this work will not infringe on the rights of third parties, and accepts no responsibility or liability in this regard. All queries on rights and licenses should be addressed to: World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e‑mail: pubrights@worldbank.org. Table of Contents Acknowledgments..................................................................................................................v Acronyms................................................................................................................................vi Executive Summary...............................................................................................................ix Es1.  Introduction...................................................................................................................ix Es2.  Climate Commitments and Capacities.......................................................................x Es3.  Selected Development and Climate Priorities.........................................................xi Energy Supply and Access............................................................................................... xi Agriculture and Forestry................................................................................................. xiv Urban Development and Resilience of Interconnectivity......................................... xvi Es4.  Economic Growth and Climate Action....................................................................xviii Es5.  Financing Climate‑Smart Development.................................................................xxii 1. Climate and Development................................................................................................. 2 1.1.. Development Context....................................................................................................... 2 1.2..Vulnerabilities to Climate and Other Shocks................................................................ 4 1.3..Risks and Development Opportunities from Climate Change..................................... 6 1.4..Structure of the CCDR.....................................................................................................10 2. Climate Commitments, Policies, and Capacities........................................................... 12 2.1.. Côte D'ivoire’s Climate Change Commitments............................................................ 12 2.2..Policies and Institutions for Climate Adaptation and Resilience...............................14 2.2.1.  Adaptation and Resilience Diagnostic................................................................... 14 2.2.2.  Climate and Disaster Risk Management............................................................. 15 2.2.3.  Urban Planning......................................................................................................... 16 2.2.4.  Agriculture and Land Use....................................................................................... 16 2.2.5. Mining.........................................................................................................................17 2.2.6.  Social Protection, Jobs, and Gender.....................................................................17 2.2.7.  Water Management................................................................................................. 18 2.3..Existing Policies and Institutions for Low‑Carbon Development..............................19 2.3.1.  Energy........................................................................................................................ 19 2.3.2. Forestry.....................................................................................................................20 2.3.3. Transport................................................................................................................... 21 2.4..Institutions and Financial Markets for Socioeconomic Transitions.......................... 21 2.4.1.  Public Financial Management and Fiscal Policy................................................. 21 2.4.2.  Financial Sector........................................................................................................22 2.4.3.  Citizen Engagement and Locally‑Led Climate Actions.....................................23 3. Selected Development and Climate Priorities.............................................................. 25 3.1..Introduction..................................................................................................................... 25 3.2..Energy............................................................................................................................... 25 3.2.1.  Oil and Gas................................................................................................................25 3.2.2.  Electricity Generation.............................................................................................28 3.2.3.  Clean Cooking......................................................................................................... 30 3.3..Agriculture and Environment........................................................................................ 32 3.4..Urban Development and Infrastructure Connectivity................................................ 38 3.4.1.  Urban Development................................................................................................38 3.4.2.  Transport and Digital Connectivity........................................................................ 41 i Country Climate and Development Report: Côte d’Ivoire 4. Finding Balance: Long‑Term Growth and Climate Action............................................ 46 4.1.. Time for Choices: Côte D'ivoire’s Long‑Term Drivers of Growth.............................. 46 4.2..Really No Choice: The Cost of Climate Inaction for Long‑Term Growth....................50 4.3..Making Choices Nonetheless: the Benefits, Opportunities, and Costs of Resilience....... 56 5. Financing At the Intersection of Climate and Development....................................... 64 5.1.. Climate and Development Financing Needs Are Intrinsically Related..................... 64 5.2..Climate-Smart Equity — Creating Fiscal Space and Crowd in Private Investment.......65 5.2.1.  Government Revenue Mobilization with a Climate Focus: Carbon Taxation...... 65 5.2.2.  Increasing Private‑Sector Investment Through Regulatory Changes...........66 5.3..Climate-Smart Debt: Expanding Corporate and Sovereign Financing Options and Reducing Risks......................................................................................................... 69 5.3.1.  Expanding Financing Options for Corporate and Sovereign Actors...............69 5.3.2.  Concessional and Blended Financing..................................................................70 5.3.3.  Thematic Bonds......................................................................................................70 5.3.4.  Carbon Markets........................................................................................................71 5.3.5.  Developing a “Risk‑Layering Approach” and Implementing Sovereign Disaster Risk Financing Instruments.................................................................. 72 6. Annexes..............................................................................................................................75 6.1.. Predicted Climate Changes........................................................................................... 75 6.2..Adaptation and Resilience Tool Methodology............................................................. 76 6.3..Macro‑Structural Modeling for the CCDR.................................................................... 84 6.4..Details on Climate Change Scenarios.......................................................................... 85 6.5..Impact Channels and Selective Adaptation Channels................................................... 87 6.6..Sample Menu of Climate Financing Options............................................................... 90 6.7..List of Background Notes that Accompany This CCDR............................................. 93 List of Figures ES Figure 1.. Impacts of climate change on the business model of Ivorian firms............ xi ES Figure 2.. Estimated natural gas and oil production in Côte d'Ivoire, 2023‌–‌2050........................................................................................................... xii ES Figure 3.. Levelized Cost of Energy (LCOE) by technology or fuel (US$/MWh) for Côte d'Ivoire in 2025 and 2040...................................................................xiii ES Figure 4.. Fuels used for cooking by households in Côte d'Ivoire, 2016 (%).............. xiv ES Figure 5.. Climate suitability for cocoa production, 2013 and 2050............................ xv ES Figure 6.. Vulnerability to flooding in a 5‑year and 100‑year return period (RP), selected West African cities............................................................................ xvii ES Figure 7.. Productivity growth needs to be sustained into the medium term......... xviii ES Figure 8.. By far, the most significant impact of climate change on the economy stems from its effect on labor productivity .................................................. xix ES Figure 9.. Poverty could be up to 7 percentage points higher without adaptation compared with half that number with modelled adaptation options........ xxi Figure 1.. Productivity growth needs to be sustained into the medium term.............. 4 Figure 2.. Components of natural capital in Côte d'Ivoire, 2018 (%).............................. 4 Figure 3.. Produced, human, and natural capital per capita (US$) in Côte d'Ivoire, 1995‌–‌2018.............................................................................................................. 5 ii Country Climate and Development Report: Côte d’Ivoire Figure 4.. GHG profile by sector in CO2e in Côte d'Ivoire, 2019...................................... 7 Figure 5.. GHG per capita emitted by the energy sector (CO2e) in selected African nations, 1990–2018............................................................. 7 Figure 6.. Projections of total GHG emissions from 2012 to 2030 for the reference scenario..................................................................................13 Figure 7.. Summary chart of the adaptation and resilience performance of Côte d'Ivoire across all pillars......................................................................................15 Figure 8.. Multidimensional exclusion of the population of Côte d'Ivoire...................26 Figure 9.. Estimated natural gas and oil production in Côte d'Ivoire...........................28 Figure 10.. Methane emissions from oil and gas production in Côte d'Ivoire..............29 Figure 11.. Levelized cost of energy (LCOE) by technology or fuel in (US$/MWh) for Côte d'Ivoire in 2025 and 2040.........................................31 Figure 12.. Fuels used for cooking by households in Côte d'Ivoire, 2016 (%)...............33 Figure 13.. Changes in forest cover across Côte d'Ivoire, 1986–‌ 2015...........................35 Figure 14.. Climate suitability for cocoa production in 2013 and 2050......................... 37 Figure 15.. Share of urban population living in informal settlements in Côte d'Ivoire.....................................................................................................40 Figure 16.. Share of built‑up area exposed to 100‑year floods in Ivorian cities estimated from global datasets........................................................................40 Figure 17.. CO2 emissions by sector in Abidjan.................................................................42 Figure 18.. Vulnerability to flooding in a 5‑year and 100‑year return period (RP), selected West African cities..............................................................................44 Figure 19.. Negative productivity growth has limited Côte d'Ivoire’s potential...........50 Figure 20.. Losses due to climate shocks without adaptation (deviations from baseline) significantly delay convergence to potential....................... 52 Figure 21.. Most of the impact on the economy happens through labor productivity (heat).....................................................................53 Figure 22.. Labor productivity will decline the most in agriculture and industry by 2050..........................................................................................54 Figure 23.. Labor productivity will decline most in the South, where 60 percent of value‑added is generated.............................................54 Figure 24.. Changes in illness/mortality/morbidity are expected to depress growth...............................................................................................55 Figure 25.. Expected annual damage to national capital in the city of Abidjan............ 55 Figure 26.. Storm‑water surges are potentially the most destructive to infrastructure..................................................................................................56 Figure 27.. Higher temperatures will affect key crops, including cocoa........................56 Figure 28.. Livestock productivity stands to be significantly affected.......................... 57 Figure 29.. Poverty headcount estimates using microsimulation (Growth Path 2)...................................................................................................58 Figure 30.. Increasing the use of cooling technology by 25 percent by 2050 halves the impact of heat stress on services and manufacturing labor productivity.............................................................60 Figure 31.. Expected capital damage from storm‑water surges due to sea‑level rise is almost halved by 2050 if adaptation measures are deployed.........60 Figure 32.. Expected capital damage in Abidjan from pluvial flooding is almost halved by 2050 if existing infrastructure is protected..................61 Figure 33.. Côte d'Ivoire’s overall GDP losses are halved.................................................61 Figure 34.. Overall GDP losses can significantly decline with the right adaptation action (without adaptation left; with adaptation right).................................62 Figure 35.. Poverty deviations from GP2 baseline without adaptation (left) and with adaptation (right) ...............................................................................64 iii Country Climate and Development Report: Côte d’Ivoire Figure 36.. Financial instruments for disaster response: a framework......................... 75 Figure 37.. Building reserve funds: base strategy or risk layering with a reserve fund (illustrative example) ...................................................... 76 Figure 38.. From left to right: Projected change in average annual precipitation and temperature in the North, South‑West, and South of Côte d'Ivoire from a selection of climate models.................. 79 Figure 39.. Six pillars for designing effective adaptation & resilience strategies............. 80 Figure 40.. Côte d'Ivoire’s performance in “Foundations” when compared with different benchmarking groups............................................................... 81 Figure 41.. Summary chart of the adaptation and resilience performance of Côte d'Ivoire across all pillars....................................................................... 81 Figure 42.. Climate variables across a range of SSP‑RCPs for Côte d'Ivoire...............88 List of Tables Table 1.. Climatic suitability levels for cocoa cultivation in climate projections for the 2050s in the West African cocoa belt.................................................36 Table 2.. Key macro variables across two growth pathways, averages for each decade to 2050...................................................................49 Table 3.. ARC drought insurance policy details in Côte d'Ivoire................................. 76 Table 4.. Selected climate scenarios...............................................................................89 Table 5.. The 10 impact channels.....................................................................................90 Table 6.. Modeling adaptation to climate change — the four channels selected.......91 List of Boxes Box 1.. The EU and Cocoa .............................................................................................34 Box 2.. Gaps Constraining Agriculture and Agri‑Business........................................35 Box 3.. Priorities to increase the Ivorian private sector’s role in and contribution to climate action............................................................... 67 iv Country Climate and Development Report: Côte d’Ivoire Acknowledgments This report was authored by a World Bank Group Task Team led by Ellysar Baroudy, Markus Kitzmuller and Michel Matera, and including Nathalie Picarelli, Natalie Weigum, Veruschka Schmidt, and Nour Masri with the editorial support of John Carey. The report has benefitted from invaluable inputs from the task team, macro-economic and poverty modeling teams: Akil Zaimi, Alina Kalle, Alexander Haider, Alisha Pinto, Alphonse Emadak, Andrew Burns, Anupurba Roy, Arnaud Braud, Bogachan Benli, Cathy Seya, Cedric V. Bagnon, Charles Jooste, Cheikh Ahmadou Bamba Diagne, Chloe Genevieve Helene Desjonqueres, Christelle Kouame, Claire Nicolas, Clemence Dryvers, Diop Saidou, Djedje Hermann Yohou, Eduardo Alonso Malasquez Carbonel, El Hadj Adama Toure, Elaine Chee En Hui, Eliakim Kakpo, Eulalie Marcelle Bah‑Levry, Ezechiel Djallo, Florent McIsaac, Gabriela Inchauste, Guy Djolaud, Idriss Deffry, Idrissa Sibailly, Immanuel Steinhilper, Jacques Touchard Adia, Jean‑Dominique Bescond, Jeanne Coulibaly Y epse Oyolola, Jean‑Paul Chausse, Jia Li, Jingyi Wu, Julian Goetz, Karine Kouassi Epse Kouacou, Kaori Oshima, Laurence Ahiba, Laurent Damblat, Luc Bonnafous, Luisa Texeira De Melo De C Felino, Madjiguene Seck, Maria Kim, Maria Pagura, Memory Machingambi, Mena Cammett, Mercedes Stickler, Miriam Muller, Mohamed Moustapha Sarr, Morten Larsen, Nguessan Enoh Ndri, Nicholas Elms, Nicholas Woolley, Oceane Keou, Olha Krushelnytska, Opope Oyaka Tshivuila Matala, Rachel Bernice Perks, Rafael Ravnik, Rose De Lima Koffi, Ruslan G. Yemtsov, Sabri Youcef Draia, Silvana Tordo, Simon Hagemann, Solene Rougeaux, Xavier Decoster, Yiao Yu, and Yves Jantzem. The team would like to extend sincere thanks to the Industrial Economcs (IEc) team of Brent Boehlert, Diego Castillo, Kenneth Strzepek, and Sydney Austin who led the impact channel and adaptation modeling. The team benefited immensely from the guidance of, and is grateful to, the key peer reviewers: Stephane Hallegatte, Kevin Carey and Maria Vagliasindi. Thanks are extended to Management and their teams on their guidance. In particular, Simeon Ehui, Olivier Buyoya, Moritz Nebe, Coralie Gevers, Abebe Adugna, Maria Sarraf, Sylvie Debomy, Theo Thomas, Kanta Kumari, Faruk Khan, Asha Johnson and Sujatha Venkat Ganeshan. Lastly, the team is indebted to Ede Ijjasz‑Vasquez for inputs, review, and guidance. v Country Climate and Development Report: Côte d’Ivoire Acronyms AFOLU Agriculture, Forestry and Other Land Use Regional Council for Public Savings and Financial Markets or Autorité AMF-UMOA Des Marchés Financiers de l'Union Monétaire Ouest Africaine ARC African Risk Capacity ASGM Artisanal and Small-scale Gold Mining BAU Business-as-Usual Central Bank Of The West African States or Banque Centrale Des États BCEAO De l'Afrique De l'Ouest BNI Banque National d’Investissement BRT Bus Rapid Transit Regional Securities Exchange or Bourse Régionale des Valeurs BRVM Mobilières CCC Conseil Café Cacao CCDR Country Climate and Development Report CCKP Climate Change Knowledge Portal CC-MFMod Climate Change Macro-Fiscal Model CFI Cocoa and Forests Initiative CH4 Methane CMIP5 CMIP6 Coupled Model Intercomparison Project 5 or 6 CO2e Carbon Dioxide Equivalent CSA Climate-Smart Agriculture DRM Disaster Risk Management DUS Single Exit Duty or Droit Unique De Sortie EU European Union FCPF Forest Carbon Partnership Facility FDI Foreign Direct Investment GCF Green Climate Fund GCMs General Circulation Models GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse Gas Emissions GP1 and GP2 Growth Path 1 and Growth Path 2 HCI Human Capital Index IDA International Development Association IEc Industrial Economics IFC International Finance Corporation ILO International Labour Organization IMF International Monetary Fund IPP Independent Power Producers LCOE Levelized Cost of Energy vi Country Climate and Development Report: Côte d’Ivoire LNG Liquefied Natural Gas MINADER Ministère de l'Agriculture et du Développement Rural Ministry of Environment and Sustainable Development or Ministère MINEDD de l'Environnement et du Développement Durable MINEF Ministry for Water and Forests or Ministère des Eaux et Forêts MRV Measurement, Reporting, and Verification MSME Micro, Small- and Medium-sized Enterprises Mt Million tons N2O Nitrous oxide NDC Nationally Determined Contribution NGFS Network For Greening the Financial System PE/VC Private Equity and Venture Capital PFM Public Financial Management PND National Development Plan or Plan National de Développement National Program of Agricultural Investment or Programme National PNIA d’Investissement Agricole National Rural Land Tenure Strengthening Program or Programme PNSFR National de Sécurité Foncière Rurale PPP Purchasing Power Parity PETROCI Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire PV Photovoltaic (solar) RCP Representative Concentration Pathway REDD+ Reducing Emissions from Deforestation and Forest Degradation SLCP Short-Lived Climate Pollutants National Strategy for Sustainable Cocoa or Strategie Nationale du SNCD Cacao Durable Société d’Exploitation et de Développement Aéroportuaire, SODEXAM Aéronautique, et Météorologique Forest Preservation, Rehabilitation, and Extension Strategy or SPREF Stratégie de Préservation, Réhabilitation et Extension des Forêts de Côte d'Ivoire SSA Sub-Saharan Africa SSP Shared Socioeconomic Pathway TFP Total Factor Productivity UNDP United Nations Development Programme WAEMU West African Economic and Monetary Union WDI World Development Indicators vii Country Climate and Development Report: Côte d’Ivoire Executive Summary Executive Summary ES1. Introduction Côte d'Ivoire is at a crossroads. Despite good progress over the last decade, recent global economic and health shocks have aggravated existing problems including lack of fiscal space, limited access to concessional and cheap financing, and a fragile political neighborhood. But Côte d'Ivoire now has an opportunity to put its growth on a more sustainable path, both realizing the aspirations of a growing population and better adapting to the growing impacts of climate change. Climate change impacts are already affecting Côte d'Ivoire, as temperatures increase, rainfall and other weather events become more extreme and less predictable, and sea levels rise. This World Bank Group Country Climate and Development Report (CCDR) shows negative impacts from climate change will reduce economic performance and over proportionally impact the poor. The report examines specific opportunities in energy, agriculture, and land use as well as urban development and interconnectivity that could render the country’s development more sustainable and inclusive, raising standards of living while increasing resilience in face of climate change. Dealing with a changing climate is a national imperative, where choices need to be made for the structural transformation of the economy, transitioning from outdoor low‑earning sectors such as agriculture to more value‑added industrial and service activities. Recommendations are made for the short- and medium‑term (these are summarized in the table at the end of this section). They are not exhaustive but highlight priority needs, where possible with associated costs, that would enable sustained growth. Most embed adaptation actions highlighted in the report, which significantly reduce the cost of inaction. This CCDR has three main messages First, business‑as‑usual will no longer work to sustain Côte d'Ivoire’s economic growth and ambitions to achieve upper‑middle income status by 2030 while substantially decreasing poverty. All else unchanged and under a hot/dry climate scenario, climate change is expected to reduce real gross domestic product (GDP) by up to 13 percent by 2050, and 1.63 million people would be prevented from escaping poverty. Adaptation measures are costly but they can potentially offset significant parts of negative climate impact, particularly on the poor. Second, key economic sectors, including cocoa and energy, are at risk of underperforming if action is not taken today to address climate impacts and leverage technological or regulatory developments. In addition, urban centers, which are economic hubs, are at risk from climate‑related damage to infrastructure and significant losses to livelihoods of poor people living in low‑income communities. Also at risk are the roads, digital networks, and other infrastructure that provide national interconnectivity, enabling efficient movement and access to markets and services. Third, today Côte d'Ivoire is not ready for the impacts of climate change. Its adaptation capacity is nascent, its institutions and climate coordination fragmented, and its policies and programs are not commensurate with the climate challenge faced by vulnerable populations. Meanwhile, the implementation of existing strategies and plans remains weak. The regulatory, institutional, and climate‑related building blocks that are needed to manage ix Country Climate and Development Report: Côte d’Ivoire climate impacts must be overhauled or put in place. Whilst there have been positive trends in private‑sector growth, this still does not reach its potential in scope and scale and needs to grow into its vital role for adapting to and mitigating climate impacts. ES2.  Climate Commitments and Capacities Climate change is affecting Côte d'Ivoire today, with worsening impacts if global greenhouse gas (GHG) emissions continue to rise. Current models predict that by 2050, temperatures will increase by 1 to 4°C, sea levels will rise by 30 cm and rainfall will be increasingly erratic with a shift in the onset and cessation of the rainy season. Further risks such as changes in the West African Monsoon cannot be captured by the climate models, increasing uncertainty. Greenhouse gas emissions from Côte d'Ivoire are low compared with global levels at 52.33 million tons of carbon dioxide equivalent (CO2e) in 2019, with agriculture, forestry, and other land use being the largest contributor followed by energy. Agriculture is also the largest contributor of methane (CH4) and nitrous oxide (N2O) emissions. Côte d'Ivoire has an ambitious climate agenda. Its Nationally Determined Contribution (NDC) seeks to achieve significant adaptation action in agriculture and livestock, forests, water resources, coastal zones, and human health. It includes priority sectors for mitigation such as energy, waste, agriculture, and forestry. Implementation of the NDC until 2030 is estimated to cost US$22 billion, which represents 17 percent of 2030 GDP or assuming an equal distribution across the next decade, an annual average cost of about 2 percent of GDP. However, given the current level of action, available resources, and the existing institutional arrangements to deal with climate change, it will be a challenge to achieve the NDC objectives. Côte d'Ivoire also does not yet have a comprehensive legal and regulatory framework in line with its adaptation and mitigation objectives. Institutional arrangements for undertaking Measurement, Reporting and Verification (MRV) activities related to Côte d'Ivoire’s climate commitments are primarily focused on mitigation. The CCDR examines climate policy across various government strategies and policies including disaster risk management, urban planning, transport, agriculture and land use, forestry, mining, energy, water management, social protection, and gender. It also looks at climate policies in public financial management and fiscal policy, the financial sector, citizen‑engagement and locally led actions. To understand the state of the existing institutional framework and capacity to manage adaptation and resilience in Côte d'Ivoire, the World Bank with government cooperation conducted an Adaptation and Resilience Diagnostic. This was coordinated with the National Adaptation Plan undertaken in the same time frame. The diagnostic showed that the government’s capacities to address adaptation are at nascent or emerging stages, meaning that the country is ill‑prepared to adapt to climate change impacts today. The overarching recommendations center on leadership and improving coordination on climate adaptation. A specific survey undertaken by the International Finance Corporation (IFC) for this CCDR shows that 80 percent of Ivorian companies surveyed are already impacted by climate change and that this has had an impact on revenues, costs and investment. Climate change is reportedly impacting firms’ business models through: (i) changes in customer x Country Climate and Development Report: Côte d’Ivoire demand for products and services; (ii) decline in labor productivity due to increased temperatures and extreme weather conditions; and (iii) the rising cost of raw materials and other operations costs. ES Figure 1. Impacts of climate change on the business model of Ivorian firms % of surveyed companies, N=70 Changes demand for your company's products/services 56% In uences the productivity of your workforce 53% A ects raw material costs or other operating costs 46% In uences the regulations to which your company is subject 30% Has an impact on your ability to meet sta needs 26% Induces changes in your technology and team investment plans 26% In uences your company's location decisions 21% 0% 20% 40% 60% Source: IFC green business survey 2023. ES3.  Selected Development and Climate Priorities The Country Climate and Development Report (CCDR) examines key sectors critical to the country’s economy and people, to highlight climate‑smart approaches to policy and investments for a path to sustainable development. Energy Supply and Access Côte d'Ivoire’s electricity generation today relies on domestic gas (67  percent) and hydropower (33 percent), but in terms of energy access more broadly, a large proportion comes from biomass. Both these aspects are examined in the CCDR. Oil and gas: Côte d'Ivoire exports its crude oil, while natural gas is supplied to the domestic power sector. The existing Foxtrot fields supply about two‑thirds of the country’s gas for power generation. Natural gas from existing fields will plateau in 2028, and then decline from 2031 unless additional reserves are identified and brought online. Such a decline will be partially offset by the Baleine field. The recent Baleine discovery has triggered a renewed interest by oil and gas companies in Côte d'Ivoire. However, given rapidly declining costs for renewable energy, Côte d'Ivoire has an opportunity to ensure its future energy security while lowering energy‑related emission both by increasing the use of renewable energy and decarbonizing its oil and gas value chain operations. xi Country Climate and Development Report: Côte d’Ivoire –‌ ES Figure 2. Estimated natural gas and oil production in Côte d'Ivoire, 2023‌ 2050 Estimated Gas Production (mmcf/d) 300 250 200 150 100 50 0 31 41 27 37 47 25 23 26 29 32 35 24 33 42 36 39 45 28 34 43 46 49 44 38 50 30 48 40 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Existing Fields Baleine 1&2 Baleine 3 Estimated Oil Production (kbbl/d) 160 140 120 100 80 60 40 20 0 41 31 27 47 37 25 23 32 26 29 35 24 42 33 45 36 39 34 43 28 46 49 44 38 50 30 48 40 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Existing Fields Baleine 1&2 Baleine 3 Source: World Bank. Note: Calculation based on the Direction Génerale des Hydrocarbures (DGH) of the Ministry of Mines, Petroleum and Energy of Côte d'Ivoire and the Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (PETROCI) estimates and publicly available information. Electricity generation: Côte d'Ivoire’s electricity sector is well developed and needs to keep developing rapidly to enable economic growth. The country has already moved away from coal‑powered generation, and the use of heavy fuel oil is limited to one emergency power station. Given the rapidly growing electricity demand, investment needs are high and there is a strong case for investing in renewable energy today to limit the need for natural gas in the future. In addition, renewable energy investment now can lower the future overall costs of the energy system since costs for solar and wind are declining, making them competitive compared with traditional sources of energy. Solar Photo Voltaic (PV) is already cost‑competitive, and the cost of solar PV with battery storage is expected to fall considerably. To integrate intermittent renewable generation, Côte d'Ivoire will need to invest significantly in battery storage and deepen regional integration, while also relying on existing gas and hydro assets. xii Country Climate and Development Report: Côte d’Ivoire ES Figure 3. Levelized Cost of Energy (LCOE) by technology or fuel (US$/MWh) for Côte d'Ivoire in 2025 and 2040 105 95 85 LCOE (US$/MWh) 75 65 55 45 35 Gas LNG PV + BESS PV Gas LNG PV + BESS PV 2025 2040 Source: World Bank. Note: See background note 5 ‑ Energy sector for assumptions underlying the LCOE calculations. A smart energy policy that promotes energy efficiency and matches energy sources with energy use will improve cost efficiency and system resilience. For example, northern parts of the country would be served well with a large‑scale roll‑out of solar panels, reducing network losses and avoiding network bottlenecks. The strategy would be most effective with competitive procurement, regional power market integration through the West Africa Power Pool, and a stable financial environment. Private‑sector participation will be critical to deliver the scale of required investment. While Côte d'Ivoire has a track record of attracting private‑sector investment, it can improve this by de‑risking investments, by allowing IPPs to access the regional power market and helping with access to sites and permitting. Biomass for clean cooking: Over 70  percent of households use solid fuels for cooking (firewood, charcoal, coal and animal dung).1 Firewood is the most widely used fuel, accounting for 56.3 percent of household consumption for cooking, followed by butane gas (25.8 percent), which is used mainly in urban areas, with a high concentration in Abidjan, compared with just 2.5 percent in rural areas. The climate‑related social cost of carbon emanating from lack of clean cooking is estimated at US$0.62 billion each year.2 Improved efficiency in the use of cooking stoves and exploring alternatives to biomass are important short‑term actions with consequences such as health benefits from improved indoor air quality and gains from women engaging in more productive activities. Addressing this issue would also lessen the pressure on natural ecosystems, which are increasingly degraded. Private‑sector incentives are critical to enable this roll‑out. Institut National de la statistique de la République de Côte d'Ivoire, 2016. Accessible at https://mics-surveys-prod.s3.amazonaws.com/ 1 MICS5/West%20and%20Central%20Africa/C%C3%B4te%20d%27Ivoire/2016/Final/Cote%20d%27Ivoire%202016%20MICS_French.pdf. 2 World Bank, 2022, Clean Cooking Planning tool; https://energydata.info/cleancooking/planningtool/. xiii Country Climate and Development Report: Côte d’Ivoire ES Figure 4. Fuels used for cooking by households in Côte d'Ivoire, 2016 (%) 100 90 80 Energy source used (%) 70 60 50 40 30 20 10 0 Overall Urban Rural Electricity Butane gas Coal, lignite Charcoal Firewood Animal dung Other Source: Republic of Côte d'Ivoire National Institute of Statistics 2016. Agriculture and Forestry Four areas are highlighted to ensure productive and resilient ecosystems for subsistence farmers through the economically important cash crop - cocoa: halting land degradation, halting deforestation, restoring land through agroforestry practices for resilient cocoa production and land certification. Halting land degradation and soil erosion is critical. More than 10 percent of Côte d'Ivoire’s lands were degraded between 2000 and 2010, with the pace of degradation increasing subsequently. This has also had an impact on biodiversity. Improved management of land for subsistence agriculture would address declining productivity — a major drag on reducing rural poverty — and increase resilience to climate shocks. Efforts to do this in northern regions and the poorest areas could be prioritized. In one possible step for climate‑smart agriculture, providing supplementary irrigation to communities without increasing pumping emissions would protect the most vulnerable from climate impacts and other shocks. Such steps would have important synergies with the National Productive Safety Net Program, which provides support to rural diversification and helps build resilience through behavioral change among the most vulnerable farmers, particularly women. In the short run, efforts should focus on rendering agriculture more productive and less land‑consuming, moving to higher value agriculture that can potentially create jobs and reduce poverty. Stopping deforestation, increasing agroforestry‑cocoa production, and further improving the outlook for cocoa exports. Cocoa is critically important for both Côte d'Ivoire’s economy and rural livelihoods. Cocoa represents 40  percent of export earnings (2021). But it is also important locally; with 1 million smallholders growing cocoa, it is the lifeblood of the southern rural economy. However, cocoa expansion has come at the cost of massive deforestation — Côte d'Ivoire has lost more than 80 percent of its forest cover since the 1960s.3 Deforestation in turn has had a negative impact on cocoa production, since cocoa trees benefit from shade. It also has micro‑climate impacts; the removal of trees has a heating effect on land, and precipitation becomes less likely. Climate change is already shifting cocoa‑growing zones, and half of the currently suitable growing areas will no longer 3 World Bank, 2022. République de Côte d'Ivoire Note Politique Forestière. © World Bank. xiv Country Climate and Development Report: Côte d’Ivoire be viable by 2050. Recent European Union (EU) regulations impose import restrictions on products linked to deforestation. That will have a detrimental impact for Côte d'Ivoire unless growers can prove their products did not cause deforestation using traceability schemes. Making cocoa sustainable is therefore intrinsically linked to its value proposition. Overall, the cost of inaction for Côte d'Ivoire is estimated at around US$1.0 billion in 2050, reducing agriculture GDP by 4.5 percent. When added to the restriction of deforestation‑linked cocoa exports to the EU, this amounts to a cost of US$2 billion in 2050, equivalent to 9 percent of agriculture GDP. ES Figure 5. Climate suitability for cocoa production, 2013 and 2050 Current 2050 Côte d'Ivoire (Ivory Coast) Ghana Atlantic Ocean Suitability of cocoa production Barely Marginal Good Very good Excellent Source: Läderach et al. 2013. Note: Full reference: Läderach, P., Martinez-Valle, A., Schroth, G. et al. Predicting the future climatic suitability for cocoa farming of the world’s leading producer countries, Ghana and Côte d'Ivoire. Climatic Change 119, 841–854 (2013). https://doi.org/10.1007/s10584-013-0774-8. Land certification and tenure. It is therefore critical to use legislation and other regulatory levers, such as village boundary delimitation and customary land registration, which also validates landowners’ rights to the trees on their land, to slow or halt deforestation and to improve the asset‑ownership of poor and vulnerable farmers. This, alongside better local land management practices, such as the introduction of agroforestry, will both improve the productivity of land and increase resilience to climate impacts for the poorest communities. It will also strengthen women’s agency, as they are under‑represented in cocoa farming, and generally have the lowest resilience. In addition, improving their access to productive capital can allow them to move into more sustainable agricultural value chains. The combination of deforestation and aggressive‑but‑low‑productivity agriculture expansion has led to high greenhouse gas emissions, contributing 62 percent of total emissions, the highest of any sector. Whilst Côte d'Ivoire will be one of the first countries in West Africa, after Ghana, to benefit from climate finance as the area around the Taï National Park is reducing emissions from deforestation and forest degradation (REDD+) for which it will be compensated, much remains to be done for this to be replicated elsewhere. Ensuring that these REDD+ benefits reach the poor will strengthen the credibility of the program with local communities. xv Country Climate and Development Report: Côte d’Ivoire Climate change will also impact livestock and other productive land uses, seriously affecting the livelihoods of poor farmers. Ensuring sustainable land and livestock practices will have benefits far beyond cocoa production. However, despite the political will, there are concerns over the lack of finance to implement these strategies for the preservation and management of the country’s forest and land resources. Contradictory and overlapping policies and regulations also need to be addressed. Urban Development and Resilience of Interconnectivity Urbanization: Over 52 percent of Côte d'Ivoire’s population is urban; and more than half the urban population lives in informal settlements. Uncontrolled urban expansion is challenging from both an economic productivity and a climate‑resilience perspective, placing cities at risk from flooding and landslides, rising sea levels, coastal erosion, and more extreme heatwaves. Côte d'Ivoire should consider focusing on a comprehensive urban planning exercise for (i) key coastal cities, and (ii) for inland cities, including in the north, which are particularly vulnerable to forced displacement from Sahel countries. Urban planning and protection of high‑risk areas to avoid settlement by migrants and vulnerable residents is a key resilience measures that can protect the assets and livelihood of the urban poor. As part of this planning, identifying areas that are not locked‑in to poor practices should be prioritized and targeted for investment. Enhancing public transport, such as Bus Rapid Transport (BRT) systems and electric buses, and safeguarding green spaces are examples of investment that enable economic development by improving access to jobs and mobility for poor communities, as well as providing ways to adapt to and mitigate risks caused by climate change. The use of nature‑based solutions, along with investments in drainage, brings numerous benefits. These solutions can reduce the toll from impacts such as flooding, address financing gaps for infrastructure needs, improve climate resilience, enhance the quality of life of vulnerable populations, and reduce carbon emissions. They should be complemented by actions aiming at strengthening Disaster Risk Management (DRM) policies and reduce vulnerability through end‑to‑end early warning systems and disaster preparedness, and to build adequate disaster‑risk financing instruments. Given the anticipated impacts from rising temperatures, and the even‑hotter urban heat‑island effects, attention to cooling and improved ventilation in public buildings, offices, industry, and private homes will be needed, but cities will also need to take extra steps to adapt to heat through parks and structures that maximize shade, while educating the public about associated health risks from extreme heat. Although Côte d'Ivoire set ambitious NDC targets for reducing urban emissions, it will require financial investment and capacity far beyond current efforts. Key urban agglomerations along the coast require particular attention, but so do critical corridors such as from Abidjan to Lagos. Coastal areas face multiple threats with sea‑level rise compounding the risk of erosion, stronger storms, and human activities such as sand mining. Erosion has already destroyed homes, beaches, and infrastructure along the coast. The degradation of coastal areas including flooding, erosion and pollution could cost the equivalent of 4.9 percent of GDP (as estimated in 20174), shattering the lives and livelihoods of millions of people. 4 World Bank, 2017. The Cost of Coastal Zone Degradation in West Africa. xvi Country Climate and Development Report: Côte d’Ivoire Resilience of interconnectivity — Transport and digital infrastructure are also vulnerable to climate impacts, which adversely affect interconnectivity, economic potential, and livelihoods. Extreme weather events are already causing human and economic damage, but the full extent and nature of these climate hazards has not been studied, creating additional uncertainty, and contributing to a lack of preparedness. The transport sector is critical to enable economic activities in both urban and rural areas. Road transport accounts for the bulk of movement of people and goods in Côte d'Ivoire. The lack of resilience along primary and rural roads is a major challenge as climate data and risks are not systematically included in the planning of construction or maintenance interventions, and financial resources allocated to road maintenance in vulnerable areas are insufficient. In urban settings, a notable aspect for some Ivoirian cities, notably Abidjan and Bouake, is the skyrocketing share of failed trips when considering increasing flood return periods. ES Figure 6. Vulnerability to flooding in a 5‑year and 100‑year return period (RP), selected West African cities a) 5-year RP b) 100-year RP 100 100 Jos, Nigeria Port Harcourt, 90 90 Nigeria Koidu Town, 80 80 Sierra Leone Freetown, 70 70 Waterloo, Sierra Leone Failed routes (%) 60 Failed routes (%) 60 Akatsi, Lome, Benin 50 50 Parakou, Benin Abidjan, Côte d'Ivoire Monrovia, 40 40 Liberia Accra, Ghana 30 30 Abidjan, Côte 45-degree 45-degree d'Ivoire separation line separation line 20 20 Bouake, Côte Bouake, d'Ivoire Côte d'Ivoire 10 10 Yamoussoukro, Yamoussoukro, Côte d'Ivoire Côte d'Ivoire 0 0 Separation line 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Road inundation (%) Road inundation (%) Source: World Bank. Note: Authors’ analysis. As the digital economy has become an important driver of economic growth, innovation, and improved service delivery worldwide, Côte d'Ivoire has launched strategies that set the foundations for the reform agenda in the digital sector. Despite a strong commitment to strengthening its mitigation and adaptation objectives, Côte d'Ivoire’s NDC could better leverage digital technologies to achieve climate goals, by improving resilience through early warning systems, smart agriculture, integrated flood management, a smart grid, and smart transportation. xvii Country Climate and Development Report: Côte d’Ivoire ES4.  Economic Growth and Climate Action Côte d'Ivoire has a crucial choice to make in deciding a suitable long‑term growth model to meet its development goals. Authorities have set an ambitious development trajectory in their Vision 2030: reaching upper middle‑income status by 2030, which requires growth rates above 8 percent for at least another decade. Strong growth is predicated on fiscal and debt sustainability, which hinges on domestic revenue mobilization, responsible debt management and structural economic reforms including competition policy. More productivity growth and investment are needed to drive economic growth and job creation. Both public and private investment increased and doubled since 2012 but remain below comparable countries such as Ethiopia (38 percent) and only recently at par with Ghana (23 percent) and Senegal (24 percent). Unfortunately, competition is perceived as weak in Ivorian markets, preventing efficient allocation of resources and production factors (the latest World Economic Forum’s Global Competitiveness Report ranks Côte d'Ivoire as 106th out of 140 countries). Limited competition in critical sectors, notably transport, financial services, and telecom, undermines private‑sector investment. ES Figure 7. Productivity growth needs to be sustained into the medium term % 7 6 5 4 3 2 1 0 –1 Developing Countries Sub-Saharan Africa SSA Metals Abundant Côte d'Ivoire excl. SSA (SSA) Physical Capital Natural Capital Human Capital TFP Output Source: Calderon 20225. –2 Note: Solow decomposition including natural capital, 2012‌ ‌ 017. At the same time, human capital needs to increase. Investment at all levels of education is vital. This is particularly important as the demographic transition deepens. Côte d'Ivoire will benefit from a young labor force only if it can be absorbed by higher‑productivity jobs. By 2050, Côte d'Ivoire’s population will double, and the share of the urban population will reach 65‌–‌70  percent. The country has significant potential to develop higher value‑added activities in agribusiness, manufacturing, and services that can foster structural transformation. Manufacturing sectors with job‑creation potential include cocoa, fruits, and nuts. Unfortunately, agricultural productivity has remained low because the country’s growth model has relied on land expansion, intensive labor farming, and limited use of technology. With a burgeoning mining industry, there is strong potential to increase well‑paying jobs. 5 Calderon, C. 2022. Boosting Productivity in Sub‑Saharan Africa: Policies and Institutions to Promote Efficiency. © Washington, DC: World Bank. https://hdl.handle.net/10986/36786 License: CC BY 3.0 IGO. xviii Country Climate and Development Report: Côte d’Ivoire Financing the development agenda has never been more uncertain in a world of rising borrowing costs, declining official aid flows, and amid concerns about debt and fiscal sustainability. The private sector must cover much of the development costs, which requires political and macroeconomic stability, transparency, and good governance. The economic impacts of climate change will depend on the interaction between key transmission channels, the underlying socioeconomic structure, and how effective global climate mitigation efforts turn out to be. This report compares two alternative climate scenarios representing qualitative differences in climate shifts: the dry and hot scenario, and the wet and warm scenario. Without additional adaptation efforts, average annual GDP losses will increase over time, reaching up to 12.9 percent of GDP by 2050. The estimated loss of real GDP is estimated to grow from 3‌–‌ –1 4.5 percent in 2030 to 8‌ ‌ 3 percent by 2050 due to climate change impacts. This suggests that Côte d'Ivoire would only reach upper middle‑income status in the late 2040s or after 2050 (depending on the climate scenario), far from the ambitions of the country’s Vision 2030. Climate change affects the Ivorian economy principally through changes to labor productivity and increased costs of capital repair and renewal. Effects of higher average temperatures on labor heat stress, human health, and availability of water supply and sanitation all impact the economy primarily through labor productivity. By contrast, inland flooding, sea‑level rise, and erosion affect the use and availability of capital goods. Heat stress will affect learning and will bear down on human capital accumulation that goes beyond health and productivity, negatively impacting long‑term prospects for economic growth. ES Figure 8. By far, the most significant impact of climate change on the economy stems from its effect on labor productivity GDP loss deviation from baseline (dry/hot) GDP Impacts in 2050 by Damage Channels (GP1) % % GDP 0 2 –2 0 –4 –2 –6 –4 –8 –6 –10 –8 –12 –10 –14 –12 2020 2030 2040 2050 ) e) n) ge H ism ng To k ity ) at d c AS as io to uc infe ur e di ur (h os ise W es oo In m s er ra Liv (d s( r Pr ps ( tiv sto d h op lan alt GP1 GP2 o d Cr Cr He od an R SL Pessimistic without adaptation Optimistic without adaptation Sources: World Bank. Note: Authors’ estimations using MFMod‑CC and IEc inputs. The most significant impact of climate change on the economy, by far, stems from its effect on labor productivity. Overall, in the “hot and dry” climate scenario with higher temperatures, the negative labor productivity shock is expected to average 12 percent of xix Country Climate and Development Report: Côte d’Ivoire GDP by 2050. Labor heat stress is expected to decrease labor productivity across sectors, mostly in agriculture and industry. In the hot and dry scenario, the overall productivity loss to agriculture will potentially amount to 17.3 percent of GDP by 2050. Decreases in labor productivity significantly affect multiple aspects of the economy, including export competitiveness or the return to capital investment. Effects are also prominent because of a significant informal sector, with about 85 percent of employment estimated to be informal. Climate change will also directly reduce the labor supply by 2.8  percent due to health impacts caused by increased transmissibility of vector‑borne diseases (malaria and dengue) and water‑borne (diarrheal) diseases. Overall, decreased labor productivity from combined heat stress and health costs could reduce domestic production by up to 10 percent by 2050. This would make the country less competitive globally, leading to a decrease in overall exports and a decrease in domestic consumption. Negative shocks to the physical capital stock are less pronounced because of the relatively low stock of capital following years of underinvestment during the political crises; this despite the significant public investments of recent years. Annual climate‑change impacts due to damage to the national capital are expected to range between 1.7 to 2.0 percent of GDP by 2050 (a sharp rise from 0.2 percent of GDP per year currently). Sea level rise, storm surges, and inland flooding are expected to drive most of these negative shocks. It is important to note that these projections are likely to be underestimates. Climate‑proofing future capital stock could bring significant gains. The agricultural sector will be significantly affected by climate change. The country’s labor‑intensive farming model with limited capital endowments and use of technology is not only inefficient but particularly vulnerable to climate shocks. Overall, the reduction in (rainfed) crop production could be as high as 16 percent by 2050. Rice, plantain, and cassava may see the largest potential decline at 30 percent by 2050 in the hot and dry climate scenario. Cocoa, Côte d'Ivoire’s main export crop, is also expected to significantly decline 15 percent by 2050 under that scenario. Given the estimated economic losses from climate shocks, the pace of poverty reduction is expected to significantly slow down between now and 2050. Under a no‑climate impact scenario, the poverty headcount is estimated to decline from 39  percent in 2020 to 16.7 percent in 2050. However, if Côte d'Ivoire does not implement adaptation measures, climate impacts will significantly disrupt this trajectory. In the hot and dry scenario, poverty by 2050 is expected to decline only to 23.4 percent, more than 7 percentage points above the projections without climate impacts. This report analyzes the costs and benefits of climate adaptation investments to deal with the most significant impacts of climate change, including: (i)  increased cooling for the indoor workforce as the economic structure shifts toward greater formal employment in services and manufacturing, and agriculture becomes less labor‑intensive; (ii) climate‑smart agriculture measures (including conservation tillage, erosion control, crop shifts, new irrigation, and use of heat‑tolerant crop varieties; (iii)  building new infrastructure ready for the projected sea‑level rise and away from flood areas. Together, these adaptation actions can significantly reduce annual economic losses from climate change, almost halving them to between 3‌ 8 percent of GDP by 2050. –‌ xx Country Climate and Development Report: Côte d’Ivoire These adaptation measures should be complemented by targeted actions on climate‑related investments, including: (i) periodic climate risk assessments of government‑owned assets; improved efficiency of climate‑resilient public investments; (iii)  (ii)  land‑use regulations that incorporate climate risks; (iv)  incentives to attract private‑sector participation in climate‑resilient infrastructure; and (v) incentives to stimulate private enterprises to invest more in enhancing the resilience of their assets. In terms of poverty, investments in adaptation and resilience would mitigate the slowdown in poverty reduction caused by climate impacts, especially for the dry and hot climate scenario. Poverty would decline from 39 percent in 2020 to 16.7 percent in 2050 if climate change were not a factor. In the dry and hot scenario, poverty would only come down to 23.4 percent by 2050. In contrast, poverty can come down to 20.5 percent when adaptation and resilience investments are made. This means about 1.5 million fewer people will be living under the poverty line in 2050 due to investments in adaptation measures. ES Figure 9. Poverty could be up to 7 percentage points higher without adaptation compared with half that number with modelled adaptation options Deviations from GP2 baseline Poverty (without adaptation) Deviations from GP2 baseline Poverty (with adaptation) 7 7 Percentage points from GP2 Percentage points from GP2 6 6 5 5 baseline baseline 4 4 3 3 2 2 1 1 0 0 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050 Dry/Pessimistic GP2 Dry/Pessimistic GP2 Wet/Optimistic GP2 Wet/Optimistic GP2 Sources: Authors’ estimations. Note: Poverty microsimulations based on household level data from the EHCVM 2018/19 and using macroeconomic –5 projections from a country‑specific Climate Change Macro‑Fiscal Model (CC‑MFMod) for the 2020‌ ‌ 0 period. Climate interventions, however, involve significant investments, even if the benefits outweigh the costs over time. Under a strict additionality assumption,6 Côte d'Ivoire would need additional annual investments ranging between 0.1 and 0.2 percent of GDP up to 2030 and increasing to 0.3‌–‌ –‌ 0.5 percent of GDP to 2040, to reach between 0.4‌ 0.7 percent of GDP in 2050, to respond to the mounting impacts of climate change. The investment required in the short term are significant compared with the country’s economic and fiscal capacities and will need both public and private‑sector engagement. New financial instruments and policies will be required. 6 Strict additionality refers to differences in optimal investment levels comparing a no climate impact with a full climate impact scenario. xxi Country Climate and Development Report: Côte d’Ivoire ES5.  Financing Climate‑Smart Development Côte d'Ivoire’s climate transition hinges upon accelerating the funding and financing for climate‑smart investment. This report conservatively estimates that the country needs additional investment of at least 0.2 to 0.4 percent of GDP per year between 2023 and 2050. The necessary investments need to be implemented early on to lower the country’s vulnerability. In the context of tight financial conditions and heightened borrowing costs, a significant share of this cost — particularly in the short- and medium‑term — will need to be financed by the private sector. Unfortunately, global climate funds are limited to support this agenda. According to the Climate Funds Update database, Côte d'Ivoire had received only US$100 million from multilateral climate change funds as of January 2022. On climate mitigation, there is growing consensus that carbon taxation can effectively reduce emissions, replace less effective carbon regulations, and make Côte d'Ivoire’s economy more efficient. If designed properly, a carbon tax would bring positive macro‑economic and distributional benefits and reduce environmental damage. For example, taxes can be designed to favor sustainable cocoa production that does not cause or result from deforestation. Developing robust private equity markets is crucial to effectively channel capital toward investments in climate projects. The current state of capital market development in Côte d'Ivoire remains relatively low, and firms have limited experience raising financing through public offerings. Only 46 companies are listed and there is a prevalence of government securities on the Regional Security Exchange (BRVM). To mobilize significant capital specifically earmarked for climate and green projects, it is necessary to expand the pool of investors and encourage private equity investments. Key regulatory and legal reforms are needed to increase private equity and venture capital for green technologies. A comprehensive framework should include clear guidelines for licensing conditions, supervision of fund functionaries, and a tax regime conforming to global standards. Green finance has emerged as a key tool for mobilizing capital toward climate investments. In Côte d'Ivoire, the uptake of green finance instruments has been slow. Most climate funding comes from debt instruments or grants. In addition, authorities have not yet introduced formal labels for green lending products and banks’ financing flows for climate and environmental projects. Only a few commercial banks are funding climate projects at present, mainly in renewable and efficient energy, climate‑smart agriculture, and conservation projects. Higher public‑sector financing is thus needed to create more green investment opportunities for private capital — a phenomenon known as “crowding in”. Public resources are often required to de‑risk projects, provide concessional credit, or backstop against certain shocks to enable private financing to flow. The focus should be on maximizing concessional and semi‑concessional sources of financing, deploying such funds to de‑risking and blended structures that crowd‑in private‑sector funds, and exploring ways to raise additional public funds through instruments that may be financially efficient, such as sustainable or green bonds, or sustainability‑linked bonds. xxii Country Climate and Development Report: Côte d’Ivoire Côte d'Ivoire has the potential to become a regional leader in sustainable finance, by using thematic bonds. In 2021, the Government of Côte d'Ivoire developed a framework for developing such bonds. The same year, an Ivorian property developer became the first issuer in the region to issue a green bond backed by the framework. Depending on capital market conditions, the Government of Côte d'Ivoire can explore the potential for a use‑of‑proceeds thematic bond issuance or a sustainability‑linked bond. The bond could be issued in the international or domestic market, building on the existing framework. It can bring in new investors, signal positive policy directions, generate funding for specific portfolios of eligible projects, and potentially yield slightly better financial terms. Côte d'Ivoire is regarded as a promising country for the development of carbon market initiatives that could channel climate finance. It has gained experience through several projects eligible under the Clean Development Mechanism of the Kyoto Protocol as well as REDD+ activities The country established a Task Force in October 2022 and organized a workshop on institutional arrangements and regulation in July 2023 to rapidly operationalize Article 6 of the Paris Agreement. Based on the Roadmap, it will be important to provide legal security to foreign investors by clarifying the issue of ownership and transferability of title to the Internationally Transferred Mitigation Outcomes (ITMOs) or emissions reductions to be delivered for activities eligible in Côte d'Ivoire. The country will also have to establish MRV systems and inventories that inform and drive domestic climate actions and comply with the Enhanced Transparency Framework of the Paris Agreement. The right mix of pre‑arranged sovereign financial instruments, including market‑based instruments, can help Côte d'Ivoire strengthen its financial resilience against disasters and strengthen its private sector. One effective strategy to consider is “risk layering,” where events of different magnitude are covered by different types of instruments: from disaster reserve funds to provide quick liquidity for small events, to contingent credits or grants and post‑disaster credit for reconstruction after medium‑magnitude events, to international risk transfer instruments for the largest disasters. For example, Côte d'Ivoire has purchased drought insurance from the African Risk Capacity (ARC), and there are opportunities for other instruments. xxiii Country Climate and Development Report: Côte d’Ivoire From Policies to Results — Summary of policy actions, investments, and investment needs for targeted outcomes Policy actions Areas7 Objectives Investments Targeted outcomes Investment needs (and feasibility ratings) Oil and Gas Lower–carbon Policy Action OG1 — Carry Investment Program Establishment of emission US$0.5–1.0 million. (OG) operations out an inventory of OG1 — Oil and gas targets by 2026 of oil and gas emissions and identify modernization private sector the relative importance investment program, and technical/economic starting with an inventory feasibility of abatement, of emissions and then set targets — Medium assessment of technical complexity solutions — Medium complexity Electricity Resilient and Policy Action Investment Program 100% of households with E1: US$1.1–1.7 billion (E) low‑carbon E1 — Renewable energy E1 — Universal energy access by 2030 required for new electricity competitive procurement access — Low complexity connections including grid 50% of energy generation sector at scale — Medium densification & expansion Investment Program in the country from complexity by 2030. E2 — Renewable renewable sources by 2035 Policy Action energy generation E2: US$3.3–5.1 billion 100% of public lighting and E2 — Financial transition — Medium (discounted) required for buildings with high energy sustainability framework in complexity investments in renewable efficiency ratings by 2035 place — High complexity and conventional Investment Program 5–10% of national power generation, with the Policy Action E3 — Energy E3 — Public lighting traded through the African range depending on efficiency policy, standards, and buildings energy Power Pool by 2035 the level of ambition for and targets — Low efficiency program — Low renewable penetration complexity complexity by 2035. Most of this Investment Program investment is anticipated E4 — Transmission to come from the private and inter‑connection sector. Complementary strengthening program investments in the grid with West African and system control will Power Pool — Medium be required, which is complexity anticipated to come largely from the public sector. E3: US$95 million, of which about US$46 million would come from the private sector, in energy efficiency investments to meet NDC (unrevised) targets for 2030.8 E4: US$0.6–1.1 billion required by 2035 for new transmission interconnections and some transmission reinforcement within Côte d'Ivoire. Depending on the level of integration desired the required investments could be higher than indicated. Clean Safe, Policy Action CC1 — Enact Investment Program Full access (100%) in urban US$147 million per year is cooking low‑carbon, Clean Cooking National CC1 — National Clean areas and 67% of access required from the public (CC) affordable Policy — Low complexity Cooking Action Plan to modern energy cooking sector to reach planned and resilient allocated a budget for services and 23% of access targets in 2030. clean cooking implementation — Medium to improved cookstoves in sector complexity rural areas by 2030 7 The Table does not list the sectors by priorities, rather it mirrors the chronology in which they are addressed in Chapter 3. 8 UNDP, August 2020. Engaging private sector in NDC implementation — Assessment of private sector investment potential in the energy sector, Côte d'Ivoire. Ministère de la Salubrité, de l'Environnement et du Développement Durable, 2018. Premier Rapport Biennal Actualisé de la Côte d'Ivoire. xxiv Country Climate and Development Report: Côte d’Ivoire Policy actions Areas7 Objectives Investments Targeted outcomes Investment needs (and feasibility ratings) Agriculture Climate-smart Policy Action Investment Program 50% of gazetted forests AE1: The government and envi‑ agriculture AE1 — Update, prioritize, AE1 — Scaling‑up with management plans has assessed SPREF ronment sector and operationalize the collaborative by 2030 implementation at (AE) Forest Preservation, implementation of US$1 billion, to include Sustainable 100% of key export Rehabilitation, and SPREF — Medium public (50%) and private forestry and agricultural commodities Extension Strategy/ complexity (50%) funding, through agroforestry fully traceable by 2029 Stratégie de Préservation, 2035. sector Investment Program Réhabilitation et Extension 30% of agricultural land AE2a — Traceability AE2a: For traceability, des Forêts de Côte d'Ivoire and 30% of smallholders systems for key value US$75 million (for cocoa, (SPREF) — Medium using climate‑smart chains to monitor the rubber and palm oil) by complexity agriculture technologies environmental and social 2029. by 2035 Policy Action production processes AE2b: US$4.61 billion AE2 — New institutional commodities — Medium 30% of agricultural land (2023–2035). arrangements and complexity served by a resilient investment, management irrigation system by 2035 AE4: Financing Needs Investment Program inclusive of women, (Public): US$1.05 billion AE2b — CSA technologies Land registration reaching for climate‑smart 2023–33. expansion program, 35% of customary land by agriculture (CSA) and agroforestry, and 2029 and 100% by 2033 commercialization resilient irrigation — High modalities for forest and complexity agroforest products, including timber, carbon, Investment Program cocoa — High complexity AE3 — overlaps with other Investment Programmes Policy Action AE3 — National Investment Program agroforestry and private AE4 — National customary plantations policy — High land registration complexity program — Medium complexity Policy Action AE4 — National customary land registration — Medium complexity Urban (U) Resilient cities Policy Action Investment Program 33% of the urban U1: Priority investments U1 — Updated national U1 — Resilient drainage population protected by needs estimated from disaster risk management and flood protection resilient drainage and flood current Sanitation and policy, including at program for coastal and protection infrastructure Drainage master plans subnational/urban secondary cities, including by 2035 (Schéma Directeur level — Low complexity northern cities d'Assainissement et de 80% urban areas of Drainage‑SDAD) amount Policy Action Investment Program cities with more than to US$867 million (by U2 — Updated (and U2 — National urban green 100,000 population with 2030). [this amount is likely enhanced coordination space and nature‑based green space programs underestimated] of) urban land use, solutions investment and nature‑based flood urban planning, urban program to tackle management solutions The SDADs are green public space, and heating, flooding, and implemented by 2029 scheduled for a horizon urban transport planning coastal‑related climate of 2050/2060 and in % of commercial and policiesl — Medium risks Abidjan only, for the entire residential space with complexity master plan, evaluate Investment Program access to high‑efficiency investments needs to Policy Action U3 — Private cooling AC [target to be set under exceed US$2.5 billion U3 — National cooling equipment purchase the national cooling and for wastewater and coverage and efficiency by businesses and efficiency policy] stormwater drainage. policy — High complexity households in line with standards defined in Policy U2: Investments Action U3 needs estimated to US$14 million [partial and underestimated]. This amount includes the cost for the preservation of the green peripheric area of Grand Abidjan, a program of 82,000 trees planting in Abidjan and green investments planned in Boundiali, Korhogo, Ferke, Odienne, Ouangolodougou and Bouna. U3: Not enough information is available to cost this. xxv Country Climate and Development Report: Côte d’Ivoire Policy actions Areas7 Objectives Investments Targeted outcomes Investment needs (and feasibility ratings) Transport Resilient and Policy Action T1 — National Investment Program 50% of urban population T1: Estimated maintenance (T) and low‑carbon resilient and low‑carbon T1 — Prioritized road in cities with more than needs of US$330 million Digital (D) urban public urban transport retrofit program 200,000 population served per year. transport policy — Medium by lower‑carbon public Investment Program T2: Approximately sector complexity transport by 2035 T2 — Urban lower‑carbon US$2 billion for the metro Resilient road Policy Action public transport 80% of primary roads line and US$550 million for sector T2 — National investment program and 50% of rural roads the BRT. climate‑smart road retrofitted by 2030 to Green and Investment Program D1: Approximately maintenance strategy and higher resilience standards climate D1 — (i) expand US$ 300–500 million for road asset management resilient digital climate‑proof and resilient 99% of the population the extension of mobile system (at the network in­frastructure digital infrastructures benefits from mobile connectivity in rural areas level) — Medium (especially in remote connectivity coverage by and the development of complexity and vulnerable areas); 2035, to strengthen their digital public services. Policy Action (ii) pursue the roll‑out adaptation capability D1 — Improve the country’s of critical digital public Eight digital public services green and climate resilient services, and (iii) leverage simplified and digitized digital infrastructure and digital tools to support by 2030, to ensure their disaster management the launch and gradual accessibility and availability capabilities — High improvement of the in the event of a disaster complexity planned multi‑risk Early Warning System (EWS) different user groups Macro and Policy Action climate MI1 — Multi‑sectoral institutions climate change law (MI) and inter‑ministerial coordination mechanism defining (i) respective institutional responsibilities of the ministries and other institutions involved in the fight against climate change, and (ii) coordination and arbitration mechanisms between them Policy Action MI2 — Adoption of climate‑informed procurement standards along the Public Financial Management chain Climate Leveraging Policy Action Finance finance CF1 — National policy for (CF) disaster risk financing Policy Action CF2 — National policy to operationalize Article 6 (carbon markets) Policy Action CF3 — Policy framework for green financing Policy Action CF4 — National carbon tax Policy Action CF5 — National policy for private equity and venture capital (PE/VC) in green technologies Policy Action CF6 — National Policy on Adaptation Foundations for Investment: Macro-fiscal stability and functioning markets: 1. Fiscal Space (Domestic Revenue Mobilization) 2. Competitive markets Note: Blue text denotes the potential for private‑sector (or partial private‑sector) funding; brown text shows recommendations that correspond to the macro modeling for adaptation. xxvi Country Climate and Development Report: Côte d’Ivoire 1. Climate and Development 1. Climate and Development 1.1. Development Context Côte d'Ivoire has been one of the fastest growing economies of Sub‑Saharan Africa (SSA) over the past decade. Between 2012‌ ‌9, real gross domestic product (GDP) growth –1 averaged 7.9 percent and 5.5 percent in per capita terms, thanks to political stability and sound macroeconomic policies. This performance substantially exceeds the country’s growth rates in preceding decades when the economy experienced boom and bust cycles.9 Growth has been supported by improvements in the business climate and ambitious public investment programs. Manufacturing and the services sectors expanded during this period – with employment in both sectors overtaking agricultural employment.10 Inflation remained low and averaged 1 percent over 2012–19, the real effective exchange rate has been aligned with fundamentals, and access to international markets and increased Foreign Direct Investment (FDI) have helped to finance the external deficit. Total investment increased from an average of 18.5 percent of GDP in 2010‌ 15 to 21.5 percent in 2016‌ –‌ –2‌ 2. Although the country is yet to recover the ground lost since the 1980s, fast growth led to a 50 percent increase in real income per capita since 2012.11 Despite impressive real GDP growth in recent years, poverty rates have remained high.12 The poverty rate, using the national poverty line, fell to 39.5 percent in 2018/19, down from 44.0 percent in 2015.13, 14 Inequality, measured by the Gini index of household consumption, also declined from 38.0 in 2015 to 35.1 in 2018/19.15 However, the average consumption of the top 20 percent of the population was still six times higher than the average consumption of those in the bottom 20 percent. Regional disparities also remain significant, with poverty incidence declining in urban areas by 6.9 percentage points (from 31.6 to 24.7 percent) while remaining high in rural areas (54.6 percent). Labor demand remains constrained, as recent growth has not created enough formal productive jobs. With an urban population of 52 percent in 2021,16 Côte d'Ivoire is one of the most urbanized countries in SSA after Ghana and Cameroon. Yet, as in most countries in the region, urbanization has not been accompanied by structural transformation of the economy, limiting the creation of higher productivity jobs in the formal sector. The bulk of the labor force is engaged in informal or semi‑informal activities in trade, retail, and distribution. Job creation has not kept pace with rapid economic growth: the employment‑to‑population over‑15 ratio, barely shifted from 62.4 percent in 2012, to 63.1 percent in 2019.17 The share of the labor force engaged in wage employment (both formal and informal) in 2018 was 23.4, compared with 36.3 percent of workers in non‑agriculture wage employment, and 40.2 percent in agricultural self‑employment.18 The Ivorian labor market is dominated by informal jobs, which represent 9 World Bank, 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining the Growth Acceleration. Country Economic Memorandum;. © Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO. 10 Ibid. GDP per capita increased significantly, from US$1,790 in 2000 to US$2,290 in 2018, but this is only two thirds of the level in 1978. Côte 11 d'Ivoire’s GDP per capita was nearly four times that of the average for lower middle‑income countries (LMICs) in the 1970s while it is almost on a par today, World Bank. 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining the Growth Acceleration. Country Economic Memorandum;. © Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO. 12 World Bank, 2022. Côte d'Ivoire Systematic Country Diagnostic Update: Countdown to 2030. Washington, DC. 13 As the surveys in 2015 and 2018/19 are not directly comparable due to methodological differences, the 2015 numbers reported here are result from a revision to make the 2015 estimates comparable to 2018/19. 14 World Bank, 2022. Poverty and Inequality Platform accessed on 8 November 2022. 15 As the surveys in 2015 and 2018/19 are not directly comparable due to methodological differences, the 2015 numbers reported here are result from a revision to make the 2015 estimates comparable to 2018/19. 16 World Bank, 2023. Côte d'Ivoire — SystematicCountry Diagnostic Update: Countdown to 2030 — SCDUpdate. 17 International Labour Organization, 2023. Labour Force Statistics database (LFS) ILOSTAT. Accessed April 25, 2023. www.ilostat.ilo.org/data. 18 World Bank, 2022. Côte d'Ivoire Poverty Assessment. Western and Central Africa. June 2022. 2 Country Climate and Development Report: Côte d’Ivoire about 87.1  percent of jobs outside of agriculture. The urban and rural informal sectors combined contribute around 70 percent to the country’s total value addition. However, most informal workers (wage‑workers and self or micro‑entrepreneurs) work at low productivity levels, yielding low revenues, which keep them under or around national poverty levels. To strengthen the labor supply, more progress needs to be made in human capital and gender equality. Human capital outcomes in Côte d'Ivoire have improved over the last decade, leading to an increase in the country’s human capital index (HCI) score from 0.30 to 0.40 between 2010 and 2021. This suggests that children born in 2021 would only be 38 percent as productive as they could have been had they enjoyed full education and health. This figure is 67 percent in Vietnam, 52 percent in Kenya, and 50 percent in Morocco. Côte d'Ivoire’s place on the HCI is lower than predicted by its income level. Despite significant investments in health and education over the last decade, access to services (including social protection and public services) are fragmented and concentrated in urban areas.19 While major reforms and policy initiatives to support women’s empowerment have been in place since 2011, women face challenges across multiple domains including economic outcomes, human capital, and voice and agency. Côte d'Ivoire comes in 133rd out of 146 countries evaluated on the gender parity scale. While access to financial services and inheritance rights are similar for both men and women, access to land and non‑land assets are highly unequal, thus increasing the vulnerability of women.20 In addition, higher illiteracy rates for women (13  percent vs. 7 percent for men, ages 15+), make it more difficult for women to access information on disaster‑risk prevention.21 Women are underrepresented at the policy level, occupying only 14 percent of seats in parliament and comprising just 5 percent of mayors.22 They are also overrepresented in climate‑vulnerable employment23 and prevailing gender norms make it more difficult for them to start green businesses or to obtain green jobs.24 At the same time, studies show that women’s political participation leads to more stringent climate change policies25 and that women’s participation in climate‑risk management improves disaster responses, environmental governance, and reduces carbon emissions.26 Côte d'Ivoire has an ambitious agenda for boosting growth with an aim to double GDP per capita, and to achieve sustainable growth by 2030.27 The government adopted the National Development Plan/Plan National de Développement) 2021–2025 (PND), which is built on leveraging private investment, capital deepening, improvements in human capital, addressing climate risks, and strengthening governance.28 The country has a 2030 Vision, as well as the Horizon 2030 plan, and the Étude Nationale Prospective CI‑2040, which defines the national long‑term development vision. Another cornerstone initiative is the Programme Économique Pour l’Innovation et la Transformation des Entreprises (PEPITE) through which 15 major economic sectors driving the 2030 Vision are selected and supported to achieve sustainable economic development. 19 World Bank, 2021. Côte d'Ivoire Social Protection and Labor, Financing and Institutional Overview. 20 World Economic Forum, 2022. Global Gender Gap Report. 21 World Bank, 2019. World Development Indicators. 22 World Bank, 2021. World Development Indicators. 23 World Bank, 2019. World Development Indicators. Modeled ILO estimate; African Development Bank, 2015. 24 Deininger et al. 2023; Erman et al. 2021; UN Women, 2021; World Bank, 2021; World Bank, 2022. 25 Mavisakalyan & Tarverdi, 2019. 26 Foa, R. 2009. Social and Governance Dimensions of Climate Change: Implications for Policy. A background paper for the World Development Report 2010 on Development and Climate Change. Social Development Papers. Social Dimension of Climate Change. No. 115. Washington, DC: The World Bank. 27 World Bank, 2022. Macro Poverty Outlook, Spring Meetings 2022: Country‑by-country Analysis and Projections for the Developing World. Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/37346 License: CC BY 3.0 IGO. 28 Ibid. 3 Country Climate and Development Report: Côte d’Ivoire Recent global crises have emphasized the imperative of addressing structural bottlenecks to enable an efficient allocation of resources and sustain productive, inclusive growth. Total factor productivity (TFP) has been a driver of growth over 2012‌ ‌8 –1 (Figure 1). The surge, however, was mostly driven by the post‑crisis recovery due to a catch up in pent‑up demand and a pickup in capacity utilization.29 It has remained flat since 2017, and formal private‑sector employment represents less than 15 percent of total.30 Productivity growth needs to be sustained into the medium term Figure 1.  % 7 6 5 4 3 2 1 0 –1 Developing Countries Sub-Saharan Africa SSA Metals Abundant Côte d'Ivoire excl. SSA (SSA) Physical Capital Natural Capital Human Capital TFP Output Source: Calderon 2022.31 –‌ Note: Solow decomposition including natural capital, 2012‌ 2017. 1.2. Vulnerabilities to Climate and Other Shocks The Ivorian economy’s medium‑term  omponents of natural capital Figure 2. C outlook is positive, but uncertainty in Côte d'Ivoire, 2018 (%) is high, and it is crucial to increase resilience to shocks. In the near‑term, Fossil fuel energy 4% Minerals 2% the economy faces inflationary pressures, Pastureland 6% Forests, timber 21% capital volatility related to FDI reallocation, lower growth in key trading partners, continued monetary policy tightening Forests, ecosystem services 11% resulting in higher financing costs. The economic policy space (both fiscal and Mangroves 0% monetary), however, is limited, and Cropland 52% Fisheries 1% Protected areas 3% growing insecurity and political instability could weigh on the outlook. Source: World Bank 2018. In addition, the sustainability of Ivorian growth depends on the sound management of its stock of natural capital (Figure 2),32 and on the impacts of climate change. Natural wealth per capita decreased by 37 percent between 1995 and 2018, with a substantial loss of wealth in forests (timber and ecosystem services) and croplands, estimated at –50 percent and –47 percent, respectively (Figure 3).33 29 World Bank, 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining the Growth Acceleration. Country Economic Memorandum. © Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO., IMF 2016 Selected Issues No. 16/148. 30 Ibid. Calderon, C. 2022. Boosting Productivity in Sub‑Saharan Africa: Policies and Institutions to Promote Efficiency. © Washington, DC: 31 World Bank. https://hdl.handle.net/10986/36786 License: CC BY 3.0 IGO. 32 World Bank, 2018. Pour que Demain ne Meure Jamais : La Côte d'Ivoire Face au Changement Climatique. Situation économique en Côte d'Ivoire 7 (July), World Bank, Washington, DC. 33 World Bank, 2021. The Changing Wealth of Nations 2021: Managing Assets for the Future. Washington, DC: World Bank. doi: 10.1596/978-1-4648-1590-4. License: Creative Commons Attribution CC BY 3.0 IGO. 4 Country Climate and Development Report: Côte d’Ivoire  roduced, human, and natural capital per capita (US$) in Côte d'Ivoire, Figure 3. P 1995‌–‌2018 25,000 20,000 Constant 2018 US$ per capita 15,000 54 10,000 159 176 516 514 277 7,512 5,866 4,983 4,942 5,034 4,436 5,000 0 –5,000 –10,000 1995 2000 2005 2010 2015 2018 Produced capital Natural capital - renewable Natural capital - nonrenewable Human capital Net foreign assets Source: World Bank 2021. Note: Full reference: World Bank. 2021. The Changing Wealth of Nations 2021: Managing Assets for the Future. © Washington, DC: World Bank. https://hdl.handle.net/10986/36400 License: CC BY 3.0 IGO. The impacts of climate change are already evident in Côte d'Ivoire and are projected to worsen in the future with increased temperatures, greater weather variability, and more extreme weather events. Temperatures are expected to increase by 1 and 4°C in northern areas and 1 and 3°C in the south, with northern areas experiencing greater extremes. Future dry and wet periods are likely to become more extreme, and more droughts and a higher risk of floods are expected. The sea level is estimated to rise by up to 30 cm by 2050.34 But potentially catastrophic impacts and tipping points that are not easily captured through existing estimates may pose the biggest future threats, such as changes to the West African Monsoon (see Annex 6.1. Predicted climate changes). Total greenhouse gas (GHG) emissions in Côte d'Ivoire are very small on a global scale, at approximately 52 million tons (Mt) CO2e, or two tons of CO2e per capita in 2019.35 GHG emissions are lower than the sub‑Saharan average, which is estimated at 3.3 tCO2e per capita, and Côte d'Ivoire’s share of total global CO2 emissions is very small at 0.1 percent. CO2 emissions represented 70 percent of total GHG emissions in 2019, with CH4 responsible for 15 percent, N2O represented 6 percent and fluorinated gases 7 percent. Methane emissions are mainly from agriculture (3.28  MtCO2e), waste (2.2 MtCO2e) and energy emissions (2.3  MtCO2e). The Agriculture, Forestry and Other Land Use (AFOLU) sector is the single most important contributor to GHG emissions, amounting to 62 percent (Figure 4). Agriculture is the largest contributor to both CH4 and N2O emissions. The energy sector, on the other hand, is responsible for 25 percent of total emissions, a per‑capita rate of 0.51 tons of CO2e (Figure 5). 34 Doherty, A., Amies, J., Mayhew, L., Higazi, A., Osborne, R., Griffith, H. and Buonomo, E., 2022. Climate Risk Report for the West Africa region. Met Office, ODI, Foreign, Commonwealth and Development Office. 35 Climate Watch — HistoricalGHG Emissions, 2022. Washington, DC: World Resources Institute. Available online at: https://www.climatewatchdata.org/ghg-emissions. 5 Country Climate and Development Report: Côte d’Ivoire GHG profile by sector in CO2e in Côte d'Ivoire, 2019 Figure 4.  Other fuel combustion 220,000 t Aviation and shipping 830,000 t Fugitive emissions 860,000 t Manufacturing and construction 1.33 million t Waste 2.25 million t Buildings 2.61 million t Industry 3.70 million t Electricity and heat 3.83 million t Transport 4.34 million t Agriculture 5.72 million t Land-use change and forestry 26.65 million t  HG per capita emitted by the energy sector (CO2e) in selected African Figure 5. G nations, 1990–2018 1.8 1.6 1.4 CO2e per capita (tons) 1.2 Sub-Saharan Africa, 0.92 1 Nigeria, 0.93 0.8 Ghana, 0.68 0.6 Côte d'Ivoire, 0.51 0.4 Mozambique, 0.36 0.2 Niger, 0.14 0 92 96 12 94 16 98 14 90 18 10 02 06 04 08 00 19 19 20 19 20 19 20 19 20 20 20 20 20 20 20 Sources: Climate Watch 2019. 1.3. Risks and Development Opportunities from Climate Change Côte d'Ivoire’s prospects for more inclusive growth face challenges from climate change. According to the 2019 Global Climate Risk Index (CRI), Côte d'Ivoire ranks 129 among 180  countries on this scale, with fatalities and economic losses expected because of climate‑change impacts. Côte d'Ivoire has a high vulnerability score (49th most vulnerable country) and low readiness score (41st least ready country) on the Notre Dame Global Adaptation ranking36, 37 and climate change could add between 2 and 3.5 million people living below the poverty line by 2050, with losses borne essentially by the agricultural sector, human capital, and infrastructure.38 The impact of climate change are expected to be profound across Côte d'Ivoire’s economy and society.39 36 Notre Dame Global Adaptation Initiative country index: https://gain.nd.edu/our-work/country-index/. 37 According to the Notre Dame Global Adaptation Initiative country index, Côte d'Ivoire ranks 141st out of 182 countries with a vulnerability score of 0.513 and a low readiness score of 0.305 for the year 2020. 38 World Bank, 2018. Pour que Demain ne Meure Jamais: La Côte d'Ivoire Face au Changement Climatique. Situation économique en Côte d'Ivoire 7 (July), World Bank, Washington, DC. 39 World Bank, 2018. Pour que Demain ne Meure Jamais : La Côte d'Ivoire Face au Changement Climatique. Situation économique en Côte d'Ivoire 7 (July), World Bank, Washington, DC. 6 Country Climate and Development Report: Côte d’Ivoire Agriculture, which is the mainstay of the economy and provides sustenance for most poor households, is vulnerable to climate change because of the predominance of subsistence and rainfed farming systems. Natural capital, critical for resilience, is also degraded. » Droughts are perhaps the most visible climate change effects and are expected to increasingly impact the semi‑arid northern savannah region of the country, exacerbating food insecurity, impacts to livelihoods, and leading to GDP growth losses. More than 10 percent of Côte d'Ivoire’s land was degraded between 2000 and 2010, and the rate of degradation has subsequently accelerated.40 This situation has also had an impact on biodiversity. Climate change could halve the areas suitable for agriculture in the south of the country by 2050.41 In rural areas, subsistence agriculture dependence coincides with limited irrigation infrastructure (only about 0.2 percent of the country’s cropland is equipped with irrigation), making smallholder farmers particularly vulnerable to climate variability. The toll is likely to fall disproportionately on the poor and most vulnerable – women, youth, and migrants – who also have the least ability to cope given more limited access to resources (e.g., land), information (e.g., on irrigation), and finance. » The destruction and degradation of the country’s remaining forests will continue to fuel ecosystem degradation and reduce resilience to climate change impacts. The annual rate of deforestation averaged 2,8 percent in 1990‌ 2020, the highest in the world.42 Côte –‌ d'Ivoire could lose all its forests by 2034 if no transformational action is taken. The loss of forest cover has led to biodiversity loss, reduced capacity to absorb carbon emissions, reduced capacity for resilience, and wide‑ranging landscape changes. Soil degradation and local climate change following deforestation is causing cocoa production to decline and to shift to the center‑west and eventually to the south‑west where forest cover remains. With no action, climate change could cut cocoa production by half of current production. In addition, unregulated artisanal and small‑scale gold mining (ASGM) has proliferated in Côte d'Ivoire over the last ten years, further accelerating deforestation and the disruption of waterways. » Coastal degradation, sea level rise, and marine ecosystem changes due to climate change will have impacts on Côte d'Ivoire’s blue economy and natural resources that fishermen and poor coastal residents depend on for their subsistence. The costs of the degradation of coastal areas in Côte d'Ivoire are estimated at US$1.985 billion annually,43 while damages from a 20 cm rise in sea level by 2050 in the city of Abidjan alone are estimated at US$920 million per year.44 » Freshwater ecosystems, and the availability and quality of water sources are also under threat due to climate change. Changes in river flow may also impact hydropower plants such as the Kossou Dam.45 The lack of sanitation infrastructure and urban waste management make groundwater supplies in cities particularly vulnerable to floods and other impacts. Two‑thirds of the urban population rely on groundwaters as they are not Ministère de la Salubrité de l'Environnement et du Développement Durable, 2017. Engagement de la Côte d'Ivoire de mettre en œuvre la 40 Neutralité en matière de Dégradation des Terres. 41 Schroth, G., Läderach, P., Martinez‑Valle, A.I., Bunn, C., Jassogne, L., 2016. Vulnerability to climate change of cocoa in West Africa: Patterns, opportunities and limits to adaptation, Science of The Total Environment. https://doi.org/10.1016/j.scitotenv.2016.03.024 https://doi.org/10.1016/j.scitotenv.2016.03.024 . 42 World Bank, 2022. République de Côte d'Ivoire Note Politique Forestière. © World Bank. 43 Exchange rate: US$1: CFAF500. 44 République de Côte d'Ivoire, 2022. Contributions Déterminées au niveau National CDN‑Côte d'Ivoire. Kouame, Y. M., Obahoundje, S., Diedhiou, A., François, B., Amoussou, E., Anquetin, S., Didi, R. S., Kouassi, L. K., 2019. Climate, Land Use 45 and Land Cover Changes in the Bandama Basin (Côte d'Ivoire, West Africa) and Incidences on Hydropower Production of the Kossou Dam. Land, 8, 103. doi: 10.3390/land8070103. 7 Country Climate and Development Report: Côte d’Ivoire served by a utility. To‑date, groundwater has been the only source of drinking water for Abidjan, but two surface‑water treatment plants are currently under construction to supplement groundwater, of which several catchment areas are subject to urban pollution. In rural areas, 60 percent of the population rely on groundwater.46 As with other natural resources, the poor are the least able to cope with climate shocks. The costs of climate change on urban areas and economic infrastructure are expected to be significant. » Urban centers: Côte d'Ivoire has rapidly urbanized, fueled by migration from rural areas, and 52.5 percent of the population now lives in cities. The largest urban center is the Autonomous District of Abidjan on the Atlantic coast, which is home to 21.5 percent of the country’s population and provides 80 percent of the nation’s formal employment. Uncontrolled urban expansion is challenging from an economic productivity, poverty alleviation, and climate resilience perspective. » Transport: High precipitation can lead to flooding of roads and railroads, especially in low‑lying coastal areas, while high temperatures can cause roads, bridges, and protective structures to develop cracks and rapidly degrade.47 In addition, climate change can lead to more frequent disruptions in the movement of people and goods, reducing economic productivity and poverty elimination. » Energy: Recent power‑supply shortages48, 49 have contributed to energy poverty and have increased vulnerability to climate change, natural disasters, and pandemics, even though Côte d'Ivoire has one of the most developed power sectors in West Africa. Hydropower, which generates 33 percent of the country’s electricity, is highly dependent on climate. » Digital: Digital infrastructure is sensitive to climate change. Failures in telecommunication and IT infrastructure may cause failures of the associated critical infrastructure, such as power grids, railways, banking, retail services, and government services. Digital infrastructure, such as telecom towers, may be susceptible to damage from extreme climate events, including storms, floods, mud slides, wildfires, extreme heat, and other adverse weather conditions. A failure of one of the country’s 4,344 telecom towers could affect thousands of individuals and businesses, and the fiber optic network (with more than 29,000km50 of cables) is also at risk. » The cost of climate warming on human capital has increased over the years because of natural disasters leading to large‑scale environmental migration and related communal tensions. 46 Joint Monitoring Programme for Water Supply, Sanitation and Hygiene. Côte d'Ivoire. WHO, JMP, UNICEF, 2021. https://washdata.org/data/country/CIV/household/download https://washdata.org/data/country/CIV/household/download. 47 Tomalka, J., Lange, S., Röhrig, F. & Gornott, C., 2020. Climate Risk Profile for Côte d'Ivoire. A joint publication by the Potsdam Institute for Climate Impact Research (PIK), the German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the KfW Development Bank, 12 pp., Climate Risk Profiles for Sub‑Saharan Africa Series. 48 A combination of low water levels in the hydropower system and an outage at a major power plant led, in 2021, to a severe shortage of electricity, which resulted in load‑shedding over several months. 49 World Bank, 2023. Côte d'Ivoire — SystematicCountry Diagnostic Update : Countdown to 2030 — SCDUpdate. Data collected following an interview with ARTCI in May 2023 indicates that 5,000km of fiber optic have been rolled‑out by the 50 government under its national Digital Backbone project and more than 24,000km have been deployed by the Mobile Network Operators. 8 Country Climate and Development Report: Côte d’Ivoire » Climate change may force many inhabitants to migrate. This is of particular concern in the north where migration and ethnic tensions have already played a part in the past civil war. More intense droughts could cause droves of herders (e.g., from Mali and Burkina Faso) to migrate south, leading to more conflict between herders and farmers over increasingly scarce water and land resources. In general, health, food, and economic security may be further compromised, affecting the stability of the country, undermining the ability of the government to provide services, and indirectly contributing to jihadist recruitment in vulnerable rural communities.51 » Existing social inequity and exclusion, and in particular gender inequity, combined with climate change‑induced economic insecurity, will impact marginalized groups (such as poorer farmers, migrants, women, and youth) the most. This is especially true in northern and north‑western regions, which have higher poverty rates than other regions52 and malnutrition is already prevalent.53 » The informal networks that many households rely on are particularly fragile in the face of large risks and must be complemented by formal social safety nets. » Extreme weather events are expected to hamper access to education and technical and vocational education training. Flood and storms could directly damage school buildings and assets and cause interruptions of education. Droughts can require children and youth to spend more time tending to the family farming operations, hampering learning. » Climate impacts negatively affect maternal and child health. The lack of safe drinking water is likely to contribute to local outbreaks of diseases in addition to causing food shortages and malnutrition in children,54 negatively affecting learning outcomes in children.55 » Poor financial inclusion, for individuals, as well as for micro, small- and medium‑sized enterprises (MSMEs), is a key obstacle to greater resilience and economic prosperity. The MSME finance gap is US$2.3 billion (representing ~7 percent of GDP).56 Financial access for women is 97 percent lower than for men, and women’s ability to borrow for their businesses is 57 percent lower.57 51 World Bank, 2022. The Climate Change and Conflict Nexus in West Africa: a New Approach for Operationally Relevant Vulnerability Assessments, Washington DC. 52 Côte d'Ivoire Economic Outlook: Understanding the Challenges of Urbanization in Height Charts (worldbank.org). FAO; ICRISAT; CIA, 2018, 7.; most recent data are presented in UNDP 2022. Extreme Poverty and its Determinants, Inequality and 53 –‌ Vulnerability in Core d'Ivoire, page 72‌ 74. ECONOMIC ANALYSIS UNIT (CAE) and NATIONAL INSTITUTE OF STATISTICS (INS), Abidjan. 54 https://www.unicef.org/press-releases/children-suffering-dire-drought-across-parts-africa-are-one-disease-away-catastrophe. Soil‑transmitted helminth infection, loss of education and cognitive impairment in school‑aged children: A systematic review and 55 meta‑analysis - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5766095/; for the overview of climate change impacts on learning and education attendance see Goodman, J; Hurwitz, M; Park, J and Smith,J (2008): Heat and Learning, NBER Working Paper No. 24639 May, 2018. https://scholar.harvard.edu/files/joshuagoodman/files/w24639.pdf. 56 Khanna, M; Wimpey, S J; Bruhn, M; Singh, S; Hommes, M; Sorokina, A. MSME Finance Gap: Assessment of the Shortfalls and Opportunities in Financing Micro, Small, and Medium‑Sized Enterprises in Emerging Markets. Washington, D.C. World Bank. https://documents.worldbank.org/curated/en/653831510568517947/MSME-finance-gap- assessment-of-the-shortfalls-and-opportunities-in-financing-micro-small-and-medium-enterprises-in-emerging-markets. 57 World Bank, 2017. Global Findex. 9 Country Climate and Development Report: Côte d’Ivoire 1.4. Structure of the CCDR This Country Climate and Development Report (CCDR) explores how Côte d'Ivoire can meet the challenges of climate change and sustainable development by achieving compounded climate and development benefits. Chapter 2  sets the stage by describing the country’s climate‑relevant policies and institutional arrangements and presenting the results of an Adaptation and Resilience Tool. Chapter 3 explores the dynamics of climate and development in three key sectors: energy, forests and agriculture, and urban and connectivity infrastructure. Chapter 4 builds on the sectoral pillars with a macro‑economic analysis of the overall interaction between key climate impact channels and long‑term economic performance. It examines the cost and benefit of climate‑resilient development through simulation of adaptation channels. Lastly, Chapter 5 tackles the challenge of financing the development agenda, including climate adaptation and mitigation. It attempts to advance discussion of how related costs could be met by potential (and most relevant) public and private funding and financing sources. Carbon finance is a nascent but growing opportunity for Côte d'Ivoire. Background notes for key sectors and other topics are also published online. 10 Country Climate and Development Report: Côte d’Ivoire 2. Climate Commitments, Policies, and Capacities 2. Climate Commitments, Policies, and Capacities 2.1. Côte d'Ivoire’s Climate Change Commitments Côte d'Ivoire has made ambitious commitments to climate action in its latest Nationally Determined Contribution (NDC), revised in 2022. By 2030, Côte d'Ivoire aims to reduce vulnerability and increase climate resilience in the following priority sectors. Sector Priority Adaptation Actions Agriculture, livestock, (i) put in place protective measures against climate risks, (ii) promote agricultural practices aquaculture that protect soil fertility, and (iii) support climate‑smart agro‑pastoral and fishery systems. Forests and land use (i) improve land governance, (ii) strengthen the protection of forests and prevent land degradation, and (iii) restore degraded lands and forests. Water resources (i) support Integrated Water Resources Management, and (ii) strengthen technology transfer for improved management of water resources. Health (i) strengthen surveillance of diseases sensitive to climate change, (ii) build technical capacity to deal with diseases linked to climate change, and (iii) build capacity of health institutions and intersectoral collaboration. Coastal zones (i) build capacity of technical and financial institutions for integrated management of coastal zones, (ii) establish early warning systems, and (iii) support vulnerable communities through physical and social investments. On the mitigation side, while contributing only 0.1 percent of global emissions, Côte d'Ivoire has committed to carbon neutrality by 2030 but only if it receives the external support it needs to achieve this goal. With conditional support, Côte d'Ivoire commits to reducing GHG emissions by 98.95 percent compared with a business‑as‑usual (BAU) scenario by 2030 by dramatically increasing emissions reductions in the forestry and land‑use sector (Figure 6). Côte d'Ivoire also has an unconditional commitment to reduce its GHG emissions by 30.41 percent compared with a BAU scenario by 2030. Projections of total GHG emissions from 2012 to 2030 for the reference scenario Figure 6.  140 Unconditional without forestry Unconditional with forestry Conditional without forestry 120 Conditional with forestry New baseline 100 –37 millions tCO2e (30.41%) Millions tCO2e 80 60 40 –120 millions tCO2e (98.95%) 20 0 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Source: Côte d'Ivoire’s Nationally Determined Contribution 2022. 12 Country Climate and Development Report: Côte d’Ivoire Priority mitigation actions include: Sector Priority mitigation actions Energy (i) improve electricity access at an affordable price, (ii) increase the use of renewable energy in electricity generation, (iii) improve energy efficiency, (iv) renew and diversify the vehicle fleet, and (v) promote mass transportation. Waste (i) improve waste collection and urban sanitation, and (ii) ensure the sustainable management and recovery of waste. Agriculture (i) ensure self‑sufficiency and food security, and (ii) improve agriculture productivity and competitiveness. Forestry (i) significantly reduce deforestation, and (ii) increase carbon stocks. The implementation of Côte d'Ivoire’s commitments under the NDC is estimated to cost a total of US$22  billion – US$12  billion for adaptation and US$10  billion for mitigation actions. Côte d'Ivoire intends to finance these measures through various sources, including its own national budget, the private sector, international climate finance, and technical and financial partners. The NDC highlights the Green Climate Fund (GCF) and the Adaptation Fund as important sources of international climate finance and the role of private financing for spurring innovation such as local carbon markets. The revision of the NDC considered cross‑cutting aspects such as green jobs and the just transition, gender, local authorities, and short‑lived climate pollutants (SLCP), whose reduction would make it possible to avoid more than 7,000 premature deaths per year. The NDC is aligned with Côte d'Ivoire’s National SLCP Action Plan, published in 2020, which comprises 16 measures to reduce black carbon and methane across residential, transport, agriculture, waste, and oil and gas sectors. The NDC therefore includes targets amounting to a 58 percent reduction in black carbon emissions and a 30 percent reduction in methane emissions by 2030 compared with BAU. Côte d'Ivoire has also signed onto the Global Methane Pledge, where participants agree to take voluntary actions to contribute to a collective effort to reduce global methane emissions at least 30 percent from 2020 levels by 2030. On gender, Côte d'Ivoire established, in 2019, the National Gender and Climate Change Strategy (2020‌ –‌2024) with the vision that by 2030, all actions to combat climate change will consider issues related to gender equality and social inclusion. The National Rural Land Tenure Program (2023‌ –‌2043) aims to register all customary land rights to promote more sustainable agricultural production and reduce deforestation to achieve the agriculture and forestry NDC priority actions. The increased tenure security process can have a powerful impact on women farmers with weaker initial levels of tenure security.58, 59 Beyond the NDC, Côte d'Ivoire has considered climate change issues in several national policies, such as the NDP 2021‌ 2025. It is also developing a National Adaptation Plan and –‌ has established several institutions to oversee the implementation of climate change actions. However, coordination across these institutions is fragmented and differentiation of roles is unclear (for examples, see Background note  1 - Governance & institutional set‑up). The government sees the NDC as a fully‑fledged component of the NDP and it plans to lay the foundations for the alignment between the various national climate policies and strategies, with a view to the optimum management of financial resources earmarked for climate action and improved traceability. 58 Goldstein et al 2018. 59 Fishera and Carr, 2015. 13 Country Climate and Development Report: Côte d’Ivoire Though climate change is considered in some policies, Côte d'Ivoire currently does not yet have a comprehensive legal and regulatory framework in line with its adaptation and decarbonization objectives, carbon market strategy and institutional framework. The absence of an umbrella and multi‑sectoral climate change law makes climate policies vulnerable to changes in political priorities60 but a new Law on Climate Change is currently under preparation. In the meantime, a carbon‑market workshop coordinated by the Prime Minister’s office in July 2023 recommended the creation of the institutional framework as quickly as possible.61 Institutional arrangements for carrying out MRV activities related to Côte d'Ivoire’s climate commitments are currently primarily focused on mitigation. However, Côte d'Ivoire is committed to developing a national MRV system for mitigation, adaptation, and climate finance. A feasibility study has identified potential barriers, including insufficient financial resources, lack of technical capacity, inadequate legal framework to encourage data sharing, poor coordination across ministries and initiatives, and low awareness of actors. 2.2. Policies and Institutions for Climate Adaptation and Resilience 2.2.1. Adaptation and Resilience Diagnostic The Adaptation and resilience assessment62 shows that Côte d'Ivoire has much to do to meet its adaptation ambitions, and to strengthen adaptation and resilience capacities at the national and local levels (Figure 7). Côte d'Ivoire performs primarily in the “nascent” and “emerging” stages of managing adaptation and resilience across all pillars of the diagnostic, except in the “Foundations” pillar, which demonstrates that Côte d'Ivoire has made progress in reducing poverty and sustaining economic growth compared with its peer group.  ummary chart of the adaptation and resilience performance of Côte d'Ivoire Figure 7. S across all pillars Nascent Emerging Established A: Prioritization, implementation and progress monitoring 19 7 2 P4: Manage nancial and macro scal issues 8 6 1 P3: Help rms and people manage residual risks and natural disasters 11 12 1 P2: Adapt land use plans and protect critical public assets and services 27 22 7 P1: Facilitate the adaptation of people and rms 17 15 F: Foundations for rapid, robust and inclusive growth 10 7 5 0 20 40 60 80 100 Share of indicators % Source: World Bank. Note: Author’s analysis. The number in each bar indicates the number of indicators per rating category. 60 République de Côte d'Ivoire, 2014. Code de l'Environnement. 61 Options proposed during the workshop includes (i) a Presidential decree defining institutional framework including all proposed institutions (high level monitoring body, signatory entity for cooperative approach and national Carbon market authority) or (ii) a Prime ministry office regulation or (iii) a cross‑ministerial regulation to create the national Carbon market authority. 62 The Adaption and Resilience Assessment Tool, and methodology, are described in Annex 6.2. 14 Country Climate and Development Report: Côte d’Ivoire The overarching recommendations emerging from the assessment center on leadership and improving coordination on climate adaptation and resilience. While Côte d'Ivoire has made progress in establishing national strategies and plans that integrate climate adaptation and resilience considerations, inter‑ministerial coordination on climate change at the central level should be strengthened. As part of the new Climate Change Law, Côte d'Ivoire should clearly define (i) the respective institutional responsibilities of ministries and other institutions engaged in climate change, and (ii) the coordination and arbitrage mechanisms between them. Relevant ministries should establish a mechanism for systematically aligning strategic documents on climate change and ensure the full integration of the NDC into relevant government strategies and policies. The following sections provide details. 2.2.2. Climate and Disaster Risk Management Formalize management of climate and disaster risks. Côte d'Ivoire has recently adopted a revised National Disaster Risk Reduction Strategy 2020‌ 2030. The strategy aims to –‌ (i) strengthen the legislative and regulatory environment for disaster risk reduction, (ii) strengthen the technical capacity of institutions at both the national and local level, and (iii) use innovative and sustainable financing mechanisms for disaster risk reduction. But the track record has been poor. The new strategy follows the previous National Disaster Risk Reduction Strategy for 2015‌ –‌2020, which has largely not been implemented because of weak capacity and lack of coordination. Similarly, a National Platform for Risk Reduction and Disaster Management was created in 2011, but the committee in charge of the platform has never convened. Côte d'Ivoire has made efforts to improve climate and disaster risk mapping in the country. With support from the United Nations Development Programme (UNDP), for example, the government carried out a risk mapping exercise for the city of Abidjan to identify zones that are at high risk of flooding, coastal erosion, and land movements. The Ministry of Water and Forests also has mapped the country’s main watersheds for energy, agricultural, and pastoral use. However, the country lacks a national mapping of risk areas, which is a key barrier in reducing climate and disaster risks. Côte d'Ivoire has yet to operationalize a national early warning system. The national meteorological agency, SODEXAM (Société d’Exploitation et de Développement Aéroportuaire, Aéronautique, et Météorologique), lacks observation infrastructure and meteorological equipment, making real‑time data collection and forecasts difficult. While SODEXAM produces weather forecast bulletins, they are not distributed to communities and vulnerable households that could act based on the forecasts. To help solve these problems, the Ministry of Environment and of Sustainable Development has committed to establish a multi‑risk impact‑based forecasting and early warning system to improve the sharing of weather and disaster information. Digital public services could enable the government to deliver critical services to the population before, during, and after climate shocks, but interconnections and interoperability need to be improved. One important step is the creation of a unified social registry integrating poverty and vulnerability assessments with climate data and digital payment platforms. The National Digital Development Strategy foresees the digitization of 80 percent of administrative procedures by 2025. Côte d'Ivoire could also establish a Data Disaster Recovery Center using backup servers or cloud‑based servers that are more disaster‑resilient than physical servers. 15 Country Climate and Development Report: Côte d’Ivoire 2.2.3. Urban Planning Côte d'Ivoire has established a legal framework for urban planning; however, the process remains largely centralized and does not adequately address climate adaptation and resilience to disaster risks. The Ministry of Construction, Housing, and Urban Development is responsible for preparing urban master plans. Urban master plans for regional capitals were adopted starting 2016, and those for departmental capitals are currently being drawn up; however, they do not systematically and methodically take account of climate resilience issues. Several cities have also developed sanitation and drainage master plans through support from the World Bank and other development partners but lack investment for implementation. While local governments have a significant role in supporting urban development and responding effectively to climate and disaster risks, their ability to do so is constrained by an incomplete decentralization process. Since the 1980s, Côte d'Ivoire has adopted a large body of laws and regulations on decentralization, such as Law no. 2003‌ –‌208 of July 7, 2003, which delegates 16 areas of responsibility to local governments. However, years of civil and political conflict prevented the implementation of the law, with responsibility for urban development remaining centralized within ministries and specialized agencies. As a result, local governments lack autonomy, financial resources, and human capacity. Regions and municipalities also lack the human and financial resources to systematically integrate climate considerations into their municipal development plans and budgets. For example, building codes, planning regulations, and infrastructure design standards do not yet reflect climate change mitigation and adaptation requirements. However, some pilot regions, such as Bélier, have integrated climate into their development strategies and mobilized related finance,63 providing precedents others could follow. 2.2.4. Agriculture and Land Use The Government of Côte d'Ivoire has set out its vision for addressing climate and disaster risks to the agriculture sector in a series of strategies and investment plans. In 2017, the government released its Second‑Generation National Program of Agricultural Investment/Programme National d’Investissement Agricole (PNIA II) for 2017‌ 2025. The –‌ PNIA II prioritizes: (i) the integrated management of environmental resources to ensure soil fertility; (ii) the restoration of forest cover; (iii) rehabilitation and sustainable management of national environmental resources; and (iv) the strengthening of agricultural production capacity to resist climate change and shocks. The PNIA highlights the importance of tenure security and access to credit but lacks a concrete financing plan. The government also adopted the ambitious Abidjan Legacy Program64 as a response to coordinate efforts around the land use agenda, which aims to protect the country’s degraded ecosystems through a comprehensive “landscape approach” to the sustainable management of the country’s soils. In 2019, the Ministry of Agriculture and Rural Development (Ministère de l’Agriculture et du Développement Rural/MINADER), in coordination with the Food and Agriculture Organization (FAO), published its National Climate‑Smart Agriculture Strategy with the objective to ensure food security, and increase agricultural productivity and climate resilience. 63 https://regionbelier.ci/mobiliser-147-milliards-pour-le-tout-premier-plan-climat-territorial-ivoirien-dans-le-belier/. 64 The Abidjan Initiative was launched by the Ivorian government on May 9, 2022, following the organization of the Conference of the Parties (COP15) of the United Nations Convention to Combat Desertification in Côte d'Ivoire. This initiative is an integrated response to restore degraded land and increase agricultural production in Côte d'Ivoire by 2050. It focuses on combating deforestation, restoring degraded forests and promoting, agroforestry, ensuring food security through the sustainable intensification of food production, making existing value chains more sustainable without desertification; and identifying new value chains that are resilient to climate change. https://araa.org/pt/news/cop-15-abidjan-legacy-program-ambitious-15-billion-initiative. 16 Country Climate and Development Report: Côte d’Ivoire The climate‑smart agriculture agenda has several weaknesses. There is little capacity to implement technologies that may be new and unfamiliar to Ivorian farmers and poor cohesion across initiatives. Financing for the sector is still largely dependent on support from technical and financial partners, and the lack of financing means that climate‑smart agriculture activities are often of poor quality or limited in scope. In addition, the lack of climate information and services makes it difficult for farmers and pastoralists to prepare for weather extremes and other impacts of climate change. All these factors multiply the barriers poor smallholder farmers face to escape poverty. However, recognizing the financial situation, the Government decided65 to create an agricultural financial institution to facilitate access to financial products and services for farmers and agricultural businesses. 2.2.5. Mining The Government of Côte d'Ivoire has set out its vision for a responsible and clean ASGM sector, through its 2014 Mining Code, related Mining Regulations, its Artisanal and Small‑Scale Mining (ASM) Policy, entitled Le Plan National de Rationalisation de l’Orpaillage (PNRO),66 and its commitment to the Minamata Convention on Mercury.67 The government’s recent launch of a US$19 million program on mercury abatement under the Minamata Convention is an important entry point for expanding the climate agenda toward curbing deforestation, preventing waste drainage into community waterways, and reducing fossil‑fuel emission use at sites. This vision faces daunting challenges. Insufficient resources and a resulting lack of oversight from Ministry of Mines officials in the key mining areas have led to negative environmental and climate‑related impacts and revenue losses from cross‑border gold smuggling. For instance, northern artisanal gold mining areas are producing an estimated 40 tons of gold per year that are exiting undeclared to neighboring countries through porous northern borders (compared with 48 tons produced and exported legally by industrial companies). The government plans to revise the Mining Code to bring it up to date with current realities. 2.2.6. Social Protection, Jobs, and Gender Against the backdrop of high poverty and vulnerability, Côte d'Ivoire has made important progress in social protection systems68 following the vision in its NDP 2021‌ ‌ 025. Under –2 the World Bank‑financed Productive Social Safety Net project (Projet des Filets Sociaux Productifs)69 the government progressively rolled out a national, productive cash transfer project (Programme de Transferts Monétaires Productifs/PTMP) targeting households below the poverty line, which now covers about 13 percent of poor households. In addition, the elements of an adaptive safety net system are being put in place. The Unique Social Register70 updates data for populations at risk of flooding and other climate change related 65 Council of Ministers, April, 2019. The Government instructed the Ministry of Economy and Finance to (i) initiate feasibility studies, and (ii) seek strategic investors or shareholders capable of effectively supporting the establishment of this new agricultural financial institution. The feasibility study results were validated in September 2020. Next steps are to define the legal framework of the institution to be set up. The aim is to accelerate the implementation in order to contribute to the financing of private and associated green investment in rural areas. The PNRO was launched in 2014 and cites five phases: awareness‑raising, identification of mining sites, classification of sites, training 66 and supervision, and evaluation of negative environmental effects. 67 https://mercuryconvention.org/en. 68 Adaptive social protection systems consist of four main building blocks: (i) programs that enhance resilience outcomes; (ii) financing to allow for timely response; (iii) data and information to understand sources of risk and vulnerability, and (iv) institutional arrangements and partnerships to support coordination across sectors. The adaptive approach integrates social protection interventions with disaster risk management and climate change adaptation to better anticipate and respond to shocks. 69 World Bank, Project P143332. The Unique Social Register of poor and vulnerable households in Côte d'Ivoire aims to register the socio‑economic data of all poor and 70 vulnerable households and individuals throughout the country (it will certainly include non‑poor households), generate their poverty and vulnerability levels (using PMT methods integrated with climate risk) to constitute a single database for any social program. 17 Country Climate and Development Report: Côte d’Ivoire risks. The information will be paired with hazard data to determine household exposure to shocks, allowing estimates of asset losses at the household level. Then, digital payments can quickly and efficiently deliver support to affected households. The plan is designed to help poor households better prepare for, cope with, and adapt to shocks, such as by supporting livelihood diversification or promoting access to finance. Despite considerable progress made, however, the current shock response mechanisms are limited, particularly with respect to climate and disaster risks. There is no clear policy on the role of social protection in climate and disaster shock response, for example, and undefined mandates have led to delays in assistance. This can be changed with the greater reliance on Unique Social Registry and modern delivery mechanisms, including digital payments. To meet the increasing demand of green skills for green jobs suitable for climate resilience, the government should revisit its skills development strategies and systems and work with schools, training institutions, employers, and workers. In particular for the vocational education and training (TVET) programs, incorporate competency‑based curricula and training materials for reskilling programs, and promote life‑long learning required in green jobs through on‑the‑job training or in‑service training and apprenticeship. This is an input for a just transition with a long lead time that requires significant investment now. There are three main types of gender constraints around mitigation and adaptation that are relevant to consider in Côte d'Ivoire: (i) gender differences in the vulnerability to climate shocks; (ii) gender constraints to the adoption of adaptation and mitigation strategies; and (iii) gender constraints and differences in the impacts of adaptation and mitigation strategies. Ivorian women’s ability to respond to and adapt to effects from climate change is also limited. They have fewer resources to protect themselves against climate risks and to recover from climate shocks71 and lack assets and education to mitigate impacts.72 Acknowledging the differing nature of women’s and men’s vulnerabilities, concerns and priorities related to climate change, women need to be participating at equal stance in climate action. It is important to address specific vulnerabilities of Ivorian women in agriculture, teach climate‑skills tailored to girls, and improve women’s access to green jobs. 2.2.7. Water Management To address the numerous challenges in water resource management, Côte d'Ivoire has adopted the Water Security Strategy (Strategie Nationale de l’Eau). Only 35 percent of the population have access to a securely managed drinking water service, and 36 percent to a basic service.73 On the other hand, only 35 percent of the population has access to basic sanitation services, raising the risk of waterborne diseases. These services gaps disproportionately affect the poor households. However, water provision is at the center of the NDP for 2021‌ 2025, for both food and climate security. In 2021, with the support of –‌ the World Bank, the Ministry of Water Resources and Forestry launched the Water Security Strategy with a goal of providing sufficient water resources for all uses by 2030, even with climate change. The government also plans to invest in the expansion of efficient small‑scale irrigation systems, and to enhance the capacity of farmers in irrigation practices. 71 Deininger et al., 2023. 72 Erman et al. 2021; World Bank, 2021. –‌ Progress on household drinking water, sanitation and hygiene 2000‌ 73 2020: Five years into the SDGs. Geneva: World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF), 2021. Licence: CC BY‑NC-SA 3.0 IGO. 18 Country Climate and Development Report: Côte d’Ivoire Implementation has been delayed by a lack of coordination and cohesion among the different national actors. In addition, there is a lack of investment in data collection, monitoring, and climate change modeling analytics to inform policymaking and investments, especially in irrigation. Existing Policies and Institutions for Low‑Carbon Development 2.3.  2.3.1. Energy The Government of Côte d'Ivoire has taken several steps toward its goal of 45 percent of renewable energy in its generation capacity by 2030. The 2019  Sector Policy for the Development of Renewable Energy and Energy Efficiency aims to optimize energy consumption, improve energy efficiency, promote renewable electricity, and reduce GHG emissions in the electricity sector. The country also revised its investment code to exempt renewable energy from value added tax, custom duties, and import taxes, and plans to establish a feed‑in tariff for renewable energy generation. The Ministry of Energy is supposed to launch every two years a call for tenders for power generation projects using renewable energy sources, however, no project seems to benefit from that so far. Côte d'Ivoire’s electricity sector will need private‑sector investment in renewable energy generation to meet its targets. The Electricity Code, adopted in 2014, allows private‑sector investment (as evidenced by the role of Independent Power Producers (IPP) in the current generation mix). The legal framework also requires the Ministry to launch a competitive tender for solar photovoltaic (PV) generation every two years, but this is not always followed. Deeper integration with the West African Power Pool regional electricity market is also needed. Integration will allow Côte d'Ivoire to develop more renewable energy generation than is needed domestically to allow exports and make it easier to integrate renewable energy into the Ivorian grid. Côte d'Ivoire recognizes the need to increase investment in automation and telecontrol equipment at power plants, in dispatch/control centers to monitor and control the electricity grid in real time, and in smart meters at the customer level. Several such investments are occurring now, including through the National Electricity Digitalization and Access (NEDA) and Battery Energy Storage Technology (BEST) projects. The NDC envisages an increasing role for natural gas in power generation, but there are no specific decarbonization targets or policies for the oil and gas sector. However, as Chapter 3 will describe, there are opportunities to reduce GHG emissions throughout the sector value chain, which will require a clear policy and regulatory framework and close consultation and coordination with private operators. For clean cooking, Côte d'Ivoire has a moderately developed policy framework that is focused on planning, creating awareness, and tracking progress. Under the 2022 NDC, the government aims to increase the share of butane gas used for cooking from 25.8 percent in 2016 to 67 percent, and achieve 20 percent of improved cookstoves use by 2030, a 12 percent increase over 2014 levels. Côte d'Ivoire is updating its Clean Cooking National Action Plan (Plan d’Action National sur la Cuisson Propre) to ensure access to modern cooking solutions. But so far, the plans are lacking funding allocation, institutional capacity, and standards for efficiency, emissions, and safety. 19 Country Climate and Development Report: Côte d’Ivoire 2.3.2. Forestry The government has responded ambitiously to reverse the trends of deforestation and forest degradation with its Forest Preservation, Rehabilitation, and Extension Strategy (SPREF, 2018). Côte d'Ivoire’s ambition is to generate a transformational change in the management of forests and to increase forest cover from 11  percent to 20  percent by 2040. A new Forest Code was adopted in 2019 to promote and develop agroforestry and to strengthen protections for existing natural forests. Côte d'Ivoire also has begun to reform and implement land tenure policies to reduce the uncertainties and poor logging management that hamper sustainable forest management.74 In particular, it is trying to increase the historically slow pace of land registration, which had been hampered by complex and costly registration procedures and unclear boundaries between the rural domain and gazetted forests. From 1998 to 2018, out of an estimated 1.5 million customarily held parcels, only about 5,600 land certificates were delivered to customary landowners. Now, thanks to the creation of a new Rural Land Agency (Agence Foncière Rurale, AFOR), and the adoption of a Rural Land Policy (in 2017), among other reforms, there are five times more land certificates nationwide than in 2018, and certified landowners can now legally benefit from the trees on their land, which should provide an incentive for agroforestry. The Government has also recently adopted decree no. 2023‌ 238 of April 05, 2023, which extends the legal validity of land certificates, and a –‌ National Rural Land Tenure Strengthening Program/ Programme National de Sécurisation du Foncier Rural (PNSFR) that mandates AFOR to complete nationwide customary rural land registration by 2033, with an estimated public financing need of US$1.05 billion. The SPREF and the new Forest Code aim to reduce emissions from deforestation and forest degradation (REDD+). The government has prepared a jurisdictional Emissions Reduction Program75 targeting the most densely forested area pressured by deforestation and forest degradation due to cocoa production in the five regions around the Taï National Park in the southwest of the country. It is one of the only remaining intact dense rainforests in West Africa although there are no plans to scale up REDD+ despite opportunities to do so. Côte d'Ivoire has made some progress in addressing the role of cocoa in deforestation and in catalyzing private‑sector commitments. The governments of Côte d'Ivoire and Ghana, along with 34 leading cocoa and chocolate companies, committed in 2017 to working together through the Cocoa and Forests Initiative (CFI) to end deforestation in the cocoa growing areas and help restore forest areas, in line with the 2015 Paris Climate Agreement. The plan focuses on forest protection and restoration; sustainable cocoa production and farmers’ livelihoods; and community engagement and social inclusion. The CFI’s progress in Côte d'Ivoire includes commitments from private sector partners to stop any new conversion of forest lands for cocoa production and to increase the traceability of cocoa sourcing including through land registration, to enable the enforcement of agreements such as the “Elimination of Cocoa Production and Sourcing from National Parks and Reserves”.76 74 387 “Forest Exploitation Perimeters” have been allocated to private loggers in the Rural Land Domain without the active enforcement of sustainable forest management regulations. 75 An Emission Reductions Payment (ERP) was negotiated with the Carbon Fund Donors in 2019, for US$50M carbon credits to FCPF donors with a purchase option for an additional US$30M under implementation with a first payment expected by the end of 2023. ERP Document: https://www.forestcarbonpartnership.org/system/files/documents/190422-ERPD%20RCI%20FV.pdf. 76 CFI Annual Progress Report. 2020: Cargill (accessed November 2020), https://www.cargill.com/doc/1432159394919/cargill-cocoa-forests-initiative-annual-report-2020.pdf. 20 Country Climate and Development Report: Côte d’Ivoire 2.3.3. Transport Côte d'Ivoire is undertaking sectoral studies, including evaluating a carbon tax for the transport sector77 to address growing emissions. It has adopted a series of decrees to reduce the average age of private and public vehicles and to achieve a more energy‑efficient, less‑polluting fleet. These include limiting the age of secondhand vehicles imported into Côte d'Ivoire; offering tax breaks for productive, green, and socially responsible investments; and establishing maximum air quality thresholds by type of vehicle. Mass‑transportation projects are underway in Abidjan with the development of a north‑south metro line, an east‑west bus rapid transit (BRT) system and efforts to rehabilitate and plan the development of feeder roads. A transport adaptation strategy (“Stratégie nationale d’adaptation et de résilience des infrastructures de transport aux effets des changements climatiques”) is being developed. The strategy focuses on orientations to increase resilience of transport infrastructure (including waterways), to prevent the consequences of flood events with strategic contingency planning along the transport network, and thus to enhance the adaptive capacity of communities relying on the transport network for access to jobs and basic services. It will also detail construction guidelines to cover climate projections. However, there will be a critical need to strengthen the Government’s capacity to implement and enforce these actions. 2.4. Institutions and Financial Markets for Socioeconomic Transitions 2.4.1. Public Financial Management and Fiscal Policy Public financial management (PFM) systems, including public investment management and fiscal instruments, remain on the periphery of the Government’s climate action. The fiscal risk statement attached to the budget law includes sections on natural disasters (specifically heavy rains and droughts) and climate‑change impacts (on fishing, cocoa production, infrastructure, and human development). But there are no set‑asides for recurring events. There are line items for current emergencies, but no emergency funds for disaster and climate related risks. Overall, budget reallocations appear to be ad hoc and applied to respond to emergencies. The Ministry of the Environment and Sustainable Development’s budget does have a line item for investment projects aimed at climate resilience amounting to CFAF24 billion (US$40 million), but that is set to decrease to CFAF18 billion (US$30 million) by 2025. Government budget allocation practices do recognize the need to provide for the added costs of adapting projects for expected extreme hazard damage and for expected long‑term trends in climate, but the allocations for these emergencies are insufficient. The government currently does not participate in the Global Risk Financing Facility (GRiF), which aims to pilot and scale up support to strengthen the resilience of vulnerable countries to climate and disaster shocks. Moreover, the PFM Organic law, the code of transparency and good governance, the citizen budget,78 and other texts do not provide for the integration of climate‑change policy objectives in public finance and investment management tools.79 77 National Authority of the Clean Development Mechanism, 2019. 78 République de Côte d'Ivoire, 2022. Budget citoyen 2023 https://dgbf.gouv.ci/wp-content/uploads/2022/12/BUDGET-CITOYEN_2023_30-12-22.pdf. 79 République de Côte d'Ivoire, 2022. Projet de Loi de finances portant budget de l’état pour l’année 2022. Accessible at: https://budget.gouv.ci/doc/loi/0-PROJET%20DE%20LOI%20DE%20FINANCES%202022-compress__.pdf. 21 Country Climate and Development Report: Côte d’Ivoire While the process of integrating climate change into PFM is at an early stage, making public investment management more climate‑smart is an important opportunity for Côte d'Ivoire, since public investment currently represents the equivalent of about 7 percent of GDP and is likely to increase further in the coming years.80 There would also be benefits from moving toward Green Public Procurement, which represents an important share of public expenditure. Côte d'Ivoire also can take advantage of climate‑smart fiscal instruments. These could include removing the current large and widespread “tax loopholes” for fossil fuels and using price signals to provide incentives for cleaner alternatives, for emissions reductions, and for adaptation measures. Fossil- fuel subsidies amounted to 4.2 percent of GHG emissions in 2021.81 2.4.2. Financial Sector The Ivoirian financial sector is broadly sound and resilient with direct exposure to climate risks being relatively modest. The sector is composed of 30 financial institutions accounting for 81  percent of financial‑sector assets and has proven to be resilient despite the COVID‑19 pandemic, with credit to the private sector rebounding in 2021 and non‑performing loans remaining stable at 8.8 percent as of June 2022. However, the sector remains shallow and concentrated in a few sectors of the economy, with credit penetration and diversification being limited due to weak legal and judicial environments, poor contract enforcement, and weak credit information systems. The banking sector primarily focuses on serving large corporations and investing in government securities, with limited exposure in the climate‑sensitive agricultural sector, which represents 73.7 percent of the overall portfolio of bank financing.82 Furthermore, a significant portion of outstanding credit comprises short‑term loans. To date there is no mandate to systematically integrate climate‑related risk analysis in the banking sector and the public‑sector disaster risk insurance is not strongly developed, which creates significant funding gaps in the response mechanisms to even small‑scale disasters. The Central Bank of the West African States (Banque Centrale des États de l’Afrique de l’Ouest, BCEAO) has not conducted stress testing on the largest banks in Côte d'Ivoire to assess the impact of climate change, for example. In addition, no bank in Côte d'Ivoire has a specific or formal green mandate, and BCEAO is not yet exploring the potential to adopt sustainable and responsible investment practices or climate‑related disclosure.83 However, the Banque National d’Investissement (BNI) has established a green credit line to finance producers’ adaptation actions.84 The level of maturity of the insurance sector in Côte d'Ivoire is relatively low, at 1.5 percent of GDP (compared with 3 percent for Africa and 6 percent worldwide). Meanwhile, the government participates in the parametric insurance facilities and disaster management assistance provided by the African Risk Capacity (ARC). On sustainable finance initiatives, Côte d'Ivoire became a member of the Coalition of Finance Ministers for Climate Action as a pioneer country in 2019, and established in 2020, by inter‑ministerial decree,85 a national platform on green finance, which is being 80 République de Côte d'Ivoire, 2021. Vision de la Stratégie Côte d'Ivoire 2030. 81 https://www.oecd.org/tax/tax-policy/carbon-pricing-cote-d-ivoire.pdf. 82 IMF, 2022. Article IV Consultation Staff Report. 83 NGFS, 2021, Guide on Climate‑Related Disclosure for Central Banks. 84 Through the GCF support, IFAD has established the Inclusive Green Financing Initiative (IGREENFIN): Greening Agricultural Banks & the Financial Sector to Foster Climate Resilient, Low Emission Smallholder Agriculture in the Great Green Wall. Through this program, Côte d'Ivoire has received US$30 million to establish green credit lines with BNI for the financing of adaptation actions of targeted producers in the IFAD‑funded Emergency Agricultural Project (PUACI). 85 Decree number 367/MEF/MINEF/MPD/MINEDD/MPMBPE/MPMPIP of March 6, 2020. 22 Country Climate and Development Report: Côte d’Ivoire updated. In addition, the Ministry of the Economy and Finance initiated a process which led to the formulation of the “Programme de Développement de la Finance Durable en Côte d'Ivoire” (Program for the Development of Sustainable Finance in Côte d'Ivoire). At the regional level, the financial supervisory practices of BCEAO and the West African Economic and Monetary Union (WAEMU) Banking Commission do not identify and manage risks due to climate shocks. However, awareness is growing. BCEAO’s main recent initiative is its membership in the Network of Central Banks and Supervisors for the Network for Greening the Financial System (NGFS), which explores the macro‑financial impact of climate change. 2.4.3. Citizen Engagement and Locally‑Led Climate Actions The government has embarked on efforts to raise awareness around climate change but there is a lack of institutionalized mechanisms for local communities to participate meaningfully in decision‑making related to natural resource management, climate adaptation and mitigation, and disaster risk management. This misses an opportunity to build community ownership and leverage local knowledge for more effective and locally led climate‑smart solutions. One possible model is the Community Driven Development approach, which provides a platform for communities to meaningfully participate in climate risk assessments, share local knowledge, and prioritize climate‑smart locally adapted solutions. For example, under the regional social cohesion project,86 local communities help identify and plan their development needs, with particular attention to climate vulnerabilities and resilience. It is particularly important to include segments of the population that have been historically excluded, such as women, rural dwellers and young people (Figure 8).87 Multidimensional exclusion of the population of Côte d'Ivoire Figure 8.  Incidence and Intensity of multidimensional exclusion by population group (k = 33%) 100% 90% 77% 80% 71% 72% 73% 70% 69% 65% 65% 70% 60% 50% 53% 54% 52% 55% 53% 54% 51% 51% 40% 30% 20% 10% 0% National Female Male Rural Urban 18–29 30–59 60+ years years years Incidence (H) Intensity (A) Source: Ballon and Cuesta 2023. 88 Note: The analysis used 16 indicators to measure each of the four categories of “drivers of exclusion”, namely, Economic Inclusion, Resilience, Social Cohesion, and Process Legitimacy. 86 Gulf of Guinea Northern Regions Social Cohesion Project (P175053), funded by the World Bank. It covers Côte d'Ivoire, Benin, Ghana and Togo. The analysis used 16 indicators to measure each of the four categories of “drivers of exclusion”, namely, Economic Inclusion, Resilience, 87 Social Cohesion, and Process Legitimacy. 88 Ballon, P and Cuesta, J (2023). Measuring Social Sustainability in Ivory Coast: A Multidimensional Exclusion Assessment. 23 Country Climate and Development Report: Côte d’Ivoire 3. Selected Development and Climate Priorities 3. Selected Development and Climate Priorities 3.1. Introduction Côte d'Ivoire’s development ambitions cannot be met without transformative and sustainable growth requiring capacity to adapt to climate change. It is particularly important to transform three sectors that are equally fundamental to the economy and vulnerable to climate impacts: energy, agriculture and environment, and urban and infrastructure connectivity. This chapter describes the needed transformations in each of these sectors (with more detail in the online Background notes listed in Annex 6.7). 3.2. Energy Côte d'Ivoire’s electricity generation today relies on domestic gas (67 percent) and hydropower (33 percent), but in terms of energy access more broadly, a large percentage comes from biomass (see clean cooking section). The energy mix has been stable over the past 20 years. 3.2.1. Oil and Gas The country exports its crude oil, while natural gas is supplied to the domestic power sector. In 2021, the country had estimated oil reserves of 200 million barrels and 916 billion cubic feet (26 bcm) of natural gas. However, a recent discovery, the Baleine deep offshore oil field, is estimated to hold 2.5 billion barrels of oil and 3.3 trillion cubic feet (93.4 bcm) of solution gas in place.89 The existing Foxtrot offshore gas field supplies about two‑thirds of the country’s gas for power generation. Natural gas production from these fields is projected to plateau at around 230 Mmcf per day by 2028, and then to decline unless additional reserves are identified and developed. Such a decline will be partially offset by the Baleine field coming on stream. Figure 9 shows the estimated production profile for natural gas and for oil for the period 2023‌–‌2050.90 The Baleine discovery has triggered a renewed interest of oil and gas companies in Côte d'Ivoire, with eight production‑sharing contracts signed by the Government since December 2022. Several of these licenses hold undeveloped oil and gas discoveries that could be brought on stream relatively quickly. However, given the rapidly declining costs for renewable energy, Côte d'Ivoire now has an opportunity to ensure its future energy security while lowering energy‑related emissions by increasingly using renewable resources (see 3.2.2) and decarbonizing oil and gas value chain operations. 89 –‌ At the time of the preparation of this report, recoverable resources are not yet publicly available and were assumed to be 23‌ 25 percent of volumes in place. Production profiles were estimated by the World Bank team based on information provided by the Government and Rystaad Energy. 90 Additional data were provided by the Government after the finalization of the oil and gas and energy models. Such data is not likely to materially impact the analyses and recommendations contained this report. 25 Country Climate and Development Report: Côte d’Ivoire Estimated natural gas and oil production in Côte d'Ivoire Figure 9.  Estimated Gas Production (mmcf/d) 300 250 200 150 100 50 0 31 41 27 37 47 25 23 26 29 32 35 24 33 42 36 39 45 28 34 43 46 49 44 38 50 30 48 40 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Existing Fields Baleine 1&2 Baleine 3 Estimated Oil Production (kbbl/d) 160 140 120 100 80 60 40 20 0 41 31 27 47 37 25 23 32 26 29 35 24 42 33 45 36 39 34 43 28 46 49 44 38 50 30 48 40 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Existing Fields Baleine 1&2 Baleine 3 Source: World Bank. Note: Calculation based on Direction General des Hydrocarbures (DGH) of the Ministry of Mines, Petroleum and Energy of Côte d'Ivoire and the Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (PETROCI) estimates and publicly available information. In addition to switching to renewable sources, Côte d'Ivoire can also reduce GHG emissions from the oil and gas sector. The largest current source is upstream methane91 emissions from venting.92 In 2022, 39.6 kt of methane was emitted (roughly equivalent to 1.2 MtCO2e), 63.3 percent from venting, 29.5  percent from fugitive emissions,93 and 4 percent from incomplete flaring of natural gas (Figure 10). Flaring intensity, measured as cubic meters of gas flared per barrel of oil produced, has dramatically improved over the past 10 years, and remains well below the global average (2.33 versus 4.72 in 2022). 91 Methane (CH4) is a much more potent GHG than CO2, with an estimated global warming potential of 28–36 over 100 years. 92 Venting simply means releasing gas arising from a process or activity straight into the atmosphere. There are many sources of venting in the oil and gas industry, including storage tanks, compressors (seals and starter motors), glycol dehydrators, well completions, and removing liquids from gas. 93 Fugitive emissions are accidental emissions due to, for example, equipment failure or poor maintenance. 26 Country Climate and Development Report: Côte d’Ivoire Methane emissions from oil and gas production in Côte d'Ivoire Figure 10.  Côte d'Ivoire: Oil & gas sector methane emissions by asset class (2022, 39.6 Kt or ~1.2 MtCO2e) Other Flared Vented Fugitive 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Gas pipelines and LNG facilities O shore gas O shore Oil Other from oil and gas Source: World Bank. Note: Based on IEA methane tracker, 2022. Eliminating routine flaring and venting is an attractive option to reduce GHG emissions. Not only are these emissions highly concentrated at relatively few individual point sources, making reductions easier using a range of available technologies, recovering, and using the gas that otherwise would be wasted also brings in revenue, improving the economics of the sector and reducing overall mitigation costs per ton of CO2. As a result, decarbonization of oil and gas value‑chain operations should be a top national energy transition and mitigation priority in the short term. Working toward a goal of net‑zero emissions in the energy sector in the long term, will require more substantial steps, including technologies that are not yet mature. In the oil and gas industry, those could include carbon capture, use, and storage or carbon offsets to compensate for unavoidable emissions (including nature sinks and offsets on the voluntary carbon market or through market‑based mechanisms). But the longer‑term goal should be a gradual transition from fossil fuels to renewable sources of energy. Both strategies will require substantial private sector investment and clear policy and regulatory framework. Recommendations for policy and investment in oil and gas (OG) Feasibility and readiness potential of policy reform/ Policy actions and investment programs Investment Program Financing Needs (including public and private, as appropriate) Policy action OG1 – Carry out an inventory of emissions and Medium complexity identify the relative importance and technical/economic feasibility of abatement, then set targets Investment program OG1 – Introduce policy and regulatory Medium complexity measures for GHG emission‑reduction in oil and gas Led by Ministry of Mines, Petroleum and Energy with Ministry upstream and GHG measurement by 2029 of Environment and Sustainable Development and PETROCI. Requires collaborative models with private sector and core competencies and adequate funding in leading institutions to identify operational standards that combine climate footprint and competitiveness to support investment in low‑carbon solutions. Technical and financial factors affect retrofitting solutions for brownfield assets. 27 Country Climate and Development Report: Côte d’Ivoire 3.2.2. Electricity Generation Côte d'Ivoire’s electricity sector is well developed and needs to keep developing fast to enable economic growth, but it also needs to diversify to ensure energy security and financial viability. Côte d'Ivoire’s electricity sector is one of the strongest in the sub‑region and plays a key role also as an exporter. As the country continues its economic development path, the electricity sector needs to maintain a rapid pace of development to enable economic growth and to expand access to electricity. This is especially important for social and economic development in rural areas. These economic goals are well aligned with emission‑reduction goals in the country’s NDC. Given the rapid projected growth in electricity demand, the investment needs in generation are high and need to be fast‑tracked. Côte d'Ivoire will need to invest in a range of cost‑effective technologies – solar PV, biomass, and wind, in addition to hydro and gas (which currently make up almost all the generation) in order to ensure sufficient affordable supply. The CCDR analysis shows that solar PV is already a cost‑effective solution compared with liquefied natural gas (LNG) imports for gas‑based generation required to offset the projected decline in domestic production of natural gas. Côte d'Ivoire needs to take advantage of solar PV and battery deployment, in addition to other complementary technologies such as hydropower, which has considerable potential. This should help Côte d'Ivoire maintain an affordable power supply. Solar PV should be fast tracked for economic growth, poverty alleviation, and climate mitigation reasons. While solar PV is already cost competitive, solar PV with battery storage will become increasingly cheaper as the CapEx of both technologies is expected to decrease significantly. This will make it economic to use solar PV with battery storage to delay, reduce or avoid the use of LNG or other expensive imported fuels to generate power (Figure 11). To integrate intermittent renewable generation, Côte d'Ivoire will need to invest significantly in battery storage and deepening regional power integration, while also relying on existing gas and hydro assets. Investment in battery storage s underway elsewhere in Africa, notably in South Africa, with over 4.1 GW of hybrid generation projects with battery storage expected by 2025.94 The renewable options will help alleviate bottlenecks and losses in the transmission network as generation is currently disproportionally concentrated around Abidjan, near gas supplies. The smart deployment of solar PV would therefore increase system resilience. Finally, diversifying projects and generation sources will help mitigate the risk of delays in generation projects. However, deepening regional power integration and deploying renewable energy at scale require coordination efforts and large infrastructure investments that take years to develop and need to be considered now. 94 African Energy Newsletter, Issue 486 June 2023. 28 Country Climate and Development Report: Côte d’Ivoire Levelized cost of energy (LCOE)95 by technology or fuel in (US$/MWh) Figure 11.  for Côte d'Ivoire in 2025 and 2040 105 95 85 LCOE (US$/MWh) 75 65 55 45 35 Gas LNG PV + BESS PV Gas LNG PV + BESS PV 2025 2040 Source: World Bank. Note: See Background note 5 - Energy sector for assumptions underlying the LCOE calculations. Côte d'Ivoire is in the fortunate position of starting with a low emissions power sector. It is crucial that the sector avoids the need to use high emissions and potentially expensive fuels like coal and heavy fuel oil in the future. Instead, Côte d'Ivoire’s indigenous gas should be viewed as the energy transition fuel to enable pursuing fast economic growth while also supporting development of complementary renewable energy generation. To capture the maximum benefits, Côte d'Ivoire should boost the implementation of competitive procurement, private‑sector participation, digitalization, and energy efficiency. Such measures will attract the best investors, enable least‑cost price discovery for renewable energy technologies, and improve efficiency. The Ministry of Mining, Petroleum, and Energy, which sets policy and oversees the sector, and Côte d'Ivoire ENERGIES (CI‑ENERGIES), the state‑owned asset holding company, will lead the implementation of such measures. However, private‑sector participation will be critical to deliver the scale of investments needed. While Côte d'Ivoire has a track record of attracting private‑sector investment, it can continue to improve the de‑risking of such investments by allowing IPPs access to the regional power market, and by helping further with access to sites and permitting. Green finance and environmental, social and governance (ESG) finance can also support clean energy investments. CI‑ENERGIES should prepare to access these funds by tracking, validating and implementing ESG key performance indicators. If tariffs need to be increased and attract investments, social inclusion measures would be needed to ensure affordability of electricity and to protect the poorest customers. Côte d'Ivoire’s grid flexibility will need to be increased by enhancing resilience to extreme events and supporting variable renewable‑energy deployment through investments in automation and telecontrol equipment at power plants and dispatch and control centers, and in battery storage systems. Energy efficiency codes and incentives can also save resources by reducing demand and demand‑side management can be used to shift demand to periods when generation availability is at its highest. Finally, to optimize its hydro power plants as the climate changes, Côte d'Ivoire can review the size of reservoirs, increase generation capacity, put in place optimal reservoir management systems, or rehabilitate older hydro plants. 95 LCOE is the average cost of a power plant over its lifetime, calculated as the discounted cost (capex + opex) of the power plant over its lifetime divided by the discounted electricity output of the plant over its lifetime. LCOE helps understand how technologies compete in terms of cost but does not fully reflect the benefit that each technology brings to the grid such as the firmness of generation or the system services able to be provided. Nor does LCOE reflect each technology’s carbon emissions unless explicitly included as a cost (which is not done here). 29 Country Climate and Development Report: Côte d’Ivoire The regional power market is key to enabling further security of supply in a low‑cost low carbon way. To benefit more from the regional power market, Côte d'Ivoire will need to keep developing and reinforcing interconnections with its neighbors to deepen integration. It will also be necessary to push forward the development of the operational and commercial frameworks to facilitate regional trade. As a key player in the regional market, Côte d'Ivoire is likely to be a beneficiary of the Liquidity Enhancing Revolving Facility (LERF), which is aimed at improving commercial discipline while protecting trading counterparties from non‑performance, and it can play a role in developing and implementing the facility. Recommendations for policy and investment for electricity (E) Policy actions and investment Feasibility and readiness potential of policy reform/Investment programs Program Financing Needs (including public and private, as appropriate) Policy Action E1 – Renewable energy Medium complexity competitive procurement at scale Policy Action E2 – Financial High complexity sustainability framework in place Policy Action E3 – Energy efficiency Low complexity policy, standards, and targets Investment Program E1 – Universal Low complexity. US$1.1‌–‌1.7 billion required for new connections including grid energy access by 2030 densification/expansion. Investment Program E2 – Renewable Medium complexity. US$3.3‌ 5.1 billion (discounted) required for investments –‌ energy generation transition to reach in renewable and conventional generation, with the range depending on the 40‌–‌60% by 2035 level of ambition for renewable penetration by 2035. Most of this investment is anticipated to come from the private sector. Complementary investment in the grid and system control will be required, which is anticipated to come largely from the public sector. Investment Program E3 – Energy Low complexity. US$95 million, of which about US$46 million would come from efficiency of all public lighting, and all the private sector, in energy efficiency investments to meet the NDC (unrevised) public entities by 2035 targets for 2030.96 Investment Program E4 – Medium complexity. US$0.6‌ 1.1 billion required for new transmission –‌ Strengthening of transmission and interconnections and some transmission reinforcement within Côte d'Ivoire. inter‑connections with the West African Depending on the level of integration desired the required investments could be Power Pool by 2035 higher than indicated. Note: Blue text denotes the potential for private‑sector funding; brown text shows recommendations that correspond to the macro modeling for adaptation. 3.2.3. Clean Cooking More than 70 percent of households in Côte d'Ivoire still rely on solid fuels for cooking (firewood and charcoal), followed by butane gas that is mostly present in urban areas, specifically in Abidjan (Figure 12).97 The climate‑related social cost of carbon emanating from lack of clean cooking is estimated at US$0.62 billion each year. Improved efficiency in use of cooking stoves, as well as exploring alternatives to biomass, are important short‑term actions with economic externalities beyond climate, such as health benefits from improved UNDP, August 2020, Engaging the Private Sector in NDC Implementation – Assessment of Private‑Sector Investment Potential in the 96 Energy Sector, Côte d'Ivoire. Ministère de la Salubrité, de l'Environnement et du Développement Durable, 2018. Premier Rapport Biennal Actualisé de la Côte d'Ivoire. 97 Institut National de la statistique de la République de Côte d'Ivoire, 2016. Accessible at: https://mics-surveys-prod.s3.amazonaws.com/ MICS5/West%20and%20Central%20Africa/C%C3%B4te%20d'Ivoire/2016/Final/Côte%20d'Ivoire%202016%20MICS_French.pdf. 30 Country Climate and Development Report: Côte d’Ivoire indoor air quality and gains from women engaging in more productive activities. (See Background note 6 — Clean Cooking and Climate Change for the calculation methodology). Cooking also has contributed to the country’s high rate of deforestation. Fuels used for cooking by households in Côte d'Ivoire, 2016 (%) Figure 12.  100 90 80 Energy source used (%) 70 60 50 40 30 20 10 0 Overall Urban Rural Electricity Butane gas Coal, lignite Charcoal Firewood Animal dung Other Source: Republic of Côte d'Ivoire National Institute of Statistics 2016. Accelerating access to clean cooking is thus an urgent development and poverty elimination issue for Côte d'Ivoire. It offers major potential benefits for public health, for redressing gender inequalities, and for the climate. Recognizing the importance of clean cooking, the country’s 2022 NDC set targets increasing the share of butane gas to 67 percent, increasing the share of improved cookstoves to 20 percent, and improving the energy efficiency of charcoal production. In addition, the 2022 Provisional Clean Cooking National Action Plan (Plan d’Actions National sur la Cuisson Propre) aims to guarantee access to modern cooking technologies and enable Côte d'Ivoire to become a model for clean cooking by 2030. The World Bank’s Clean Cooking Planning Tool estimates that achieving the NDC’s targets would require US$147 million per year until 2030 in public‑sector funding to develop the clean cooking market, fill in the affordability gap for poor households, and unlock private investment. The benefits would be 102 times higher than the public investment needed– an estimated US$15 billion each year (mainly in improved health, but also in climate benefits valued at around US$551 million. Despite the existing targets and plans, Côte d'Ivoire still lacks a comprehensive clean cooking strategy that addresses affordability and availability issues, and that reinforces coordination between the activities of different ministries and stakeholders. Recommendations for policy and investment in clean cooking (CC) Policy actions and investment Feasibility and readiness potential of policy reform/Investment programs Program Financing Needs (including public and private, as appropriate) Policy Action CC1 – Enact national Low complexity policy for clean cooking Investment program CC1 – Full Medium complexity access (100%) in urban areas and US$147 million per year is required from the public sector to reach planned 67% of access to modern energy targets in 2030. cooking services and 23% to improved cookstoves in rural areas by 2030 31 Country Climate and Development Report: Côte d’Ivoire 3.3. Agriculture and Environment With arable land covering 75 percent of Côte d'Ivoire’s 32 million hectares and abundant rainfall, agriculture has long been the mainstay of the nation’s economy. Agriculture today represents 22 percent of GDP, and 40 percent of Côte d'Ivoire’s exports (2021).98 Cocoa is the country’s leading export crop. An estimated 1 million smallholder farmers grow cocoa across the southern half of the country. It is the lifeblood of the southern rural economy; farmers depend on cocoa for 74 percent of their income. The agricultural “economic miracle” has come at a very high cost, especially in terms of rapid deforestation. Since the early 1960s, Côte d'Ivoire has lost more than 80 percent of its forest cover from 16.5 million ha (50 percent of the country’s total area) to less than 3 million ha (9 percent) in 2020,99 one of the highest rates of deforestation in the world. Figure 13 demonstrates this trend. The capacity of Ivorian forests to regenerate is probably almost exhausted. If current trends continue, rural areas will be totally deforested within five to 10 years. Estimates of forest losses linked to cocoa production vary, but the latest census by the Conseil Café Cacao (CCC) specifies that 15 percent of surveyed classified forests areas are currently occupied by cocoa and coffee.100 Further pressure is being caused by growing demand for firewood, charcoal, timber and building materials, and unregulated artisanal, small‑scale gold mining. Changes in forest cover across Côte d'Ivoire, 1986–‌ Figure 13.  2015 1986: 7,9 millions ha (24%) 2000: 5,1 millions ha (16%) 2015: 3,4 millions ha (11%) 6° 40’ 0’’ W 4° 0’ 0’’ W 6° 40’ 0’’ W 4° 0’ 0’’ W 6° 40’ 0’’ W 4° 0’ 0’’ W N N N 8° 40’ 0’’ N 8° 40’ 0’’ N 8° 40’ 0’’ N 8° 40’ 0’’ N 8° 40’ 0’’ N 8° 40’ 0’’ N 6° 0’ 0’’ N 6° 0’ 0’’ N 6° 0’ 0’’ N 6° 0’ 0’’ N 6° 0’ 0’’ N 6° 0’ 0’’ N Legend Legend Legend Permanent governmental Permanent governmental Permanent governmental domain domain domain 24 ID number 24 ID number 24 ID number Classified forests Classified forests Classified forests Parcs Parcs Parcs Nature reserves Nature reserves Nature reserves Land use A T L A N T I C O C E A N Land use A T L A N T I C O C E A N Land use A T L A N T I C O C E A N Forests Forests Forests Rural domain 1:2 600 000 Rural domain 1:2 600 000 Rural domain 1:2 600 000 Water body 0 35 70 140 Water body 0 35 70 140 Water body 0 35 70 140 Kilometers Kilometers Kilometers 6° 40’ 0’’ W 4° 0’ 0’’ W 6° 40’ 0’’ W 4° 0’ 0’’ W 6° 40’ 0’’ W 4° 0’ 0’’ W Source: National Office for Technical Studies and Development (BNETD) 2016. Land degradation is also a major concern. More than 10 percent of the country’s land was degraded between 2000 to 2010 (more than 3.5 million ha),101 and the pace of degradation has accelerated since 2010. Much of it has been driven by unsustainable agricultural production,102 by the extensive production of food crops and cash crops such as cocoa, rubber, palm oil, and coffee. Land degradation, whose impacts will be exacerbated by climate change, has raised serious questions on food security, with climate change predicted to negatively impact key crops and livestock staples (see Chapter 4). The country’s rich terrestrial and aquatic biological diversity is seriously threatened, with some animals, including forest elephants, facing extinction. 98 Côte d'Ivoire – Cocoa Sector Policy Implementation Assessment. Policy Note. World Bank, May 2021. 99 World Bank, 2022. République de Côte d'Ivoire Note Politique Forestière. 100 According to the CCC 2019 census of cocoa producers and their orchards, 15 percent of coffee‑cocoa production is located in gazetted forests. This data will be revised once the land‑use map undertaken in May 2023 is published. Ministère de la Salubrité de l'Environnement et du Développement Durable. 2017. Engagement de la Côte d'Ivoire de mettre en œuvre la 101 Neutralité en matière de Dégradation des Terres. Soil degradation also has negative social impacts, increasing poverty and fueling migratory patterns as farmers unable to invest in better 102 input or agroecological approaches that allow for better soils and higher productivity seek new virgin land or forest land to ensure livelihoods. 32 Country Climate and Development Report: Côte d’Ivoire Climate change has already affected agricultural productivity in Côte d'Ivoire, particularly cocoa production, and will continue to do so. Climate‑related European Union (EU) regulations will also impact the cocoa economy. Agriculture in Côte d'Ivoire is almost all rainfed, with irrigation being used on only 0.2 percent of the country’s cropland. As a result, the expected changes in temperature and rainfall will increase the risks of crop failure or force farmers to adjust what crops they grow and when they plant and harvest, leaving the north particularity vulnerable. Some important cocoa‑producing areas in Côte d'Ivoire‘s eastern forest belt became unsuitable for growing and replanting cocoa by the 1990s, and climate change may reduce the areas suitable for cultivation in southern part of the country by half by 2050103 (Table 1; Figure 14). Subsequently, in 2022, the Government adopted the National Strategy for Sustainable Cocoa/Strategie Nationale du Cacao Durable (SNCD). Making cocoa production sustainable is also critical in light of the EU regulations that will restrict imports of unsustainable commodities (Box 1). Estimates show that the costs of inaction on climate change in Côte d'Ivoire could amount to US$1 billion by 2050 – impacting agriculture GDP by 4.5  percent (See Background note  8 - Climate change impacts on cocoa). By adding the restriction of exports from deforestation‑linked cocoa, an impact of US$2 billion is estimated by 2050, equivalent to 9 percent of agriculture GDP.104  limatic suitability levels for cocoa cultivation in climate projections Table 1. C for the 2050s in the West African cocoa belt Projected 2050s climate Relative change in area Present climate (in 1,000 ha) (in 1,000 ha) (in percent of present area) Suitability <20% 20–50% >50% <20% 20–50% >50% <20% 20–50% >50% Sierra 0.5 670 846 336 744 437 +71,398 +11 –48 Leone Guinea 32 712 547 79 1,174 39 +144 +65 –93 Liberia 27 3,080 7,014 223 5,713 4,184 +726 +86 –40 Côte d'Ivoire 111 2,425 11,638 994 8,164 5,016 +800 +237 –57 Ghana 20 1,291 7,755 192 4,270 4,604 +858 +231 –41 Togo 1.6 122 777 38 680 183 +2,313 +458 –77 Nigeria 908 2,045 8,707 2,422 8,091 1,147 +167 +296 –87 Cameroon 24 1,993 11,111 24 5,049 8,055 –1 +153 –28 Total 1,123 12,337 48,395 4,307 33,885 23,664 +283 +175 –51 Source: Schroth 2016. Note: https://www.sciencedirect.com/science/article/pii/S0048969716304508. 103 Schroth, G., Läderach, P., Martinez‑Valle, A.I., Bunn, C. and Jassogne, L. Vulnerability to climate change of cocoa in West Africa: Patterns, Opportunities and Limits to Adaptation, Science of The Total Environment, 2016. https://doi.org/10.1016/j.scitotenv.2016.03.024 https://doi.org/10.1016/j.scitotenv.2016.03.024. 104 EU initiatives and regulations, notably the new EU Regulation on imported deforestation and the EU Sustainability Cocoa Initiative Roadmap could have impacts on cocoa and REDD+ at jurisdictional level given that the EU is the largest importer of cocoa from Côte d'Ivoire. 33 Country Climate and Development Report: Côte d’Ivoire Climate suitability for cocoa production in 2013 and 2050 Figure 14.  Current 2050 Côte d'Ivoire (Ivory Coast) Ghana Atlantic Ocean Suitability of cocoa production Barely Marginal Good Very good Excellent Source: Läderach et al. 2013. Note: Full reference: Läderach, P., Martinez-Valle, A., Schroth, G. et al. Predicting the future climatic suitability for cocoa farming of the world’s leading producer countries, Ghana and Côte d'Ivoire. Climatic Change 119, 841–854 (2013). https://doi.org/10.1007/s10584-013-0774-8. Box 1. The EU and Cocoa In November 2021, the European Commission proposed a Regulation to curb EU-driven deforestation and forest degradation, due to expansion of agricultural land for the production of commodities such as palm oil, cattle, soy, coffee, cocoa, timber and rubber. As a major economy and consumer of these commodities linked to deforestation and forest degradation, the EU is partly responsible for this problem. A political agreement was reached on a joint proposal in December 2022 and once the EU Regulation is in force, operators and traders will have 18 months to implement the new rules. As this regulation could have a strong impact on the cocoa market between Côte d'Ivoire and the EU, a dialogue was initiated in 2020 to discuss the building blocks required for the transformation of the sector to ensure continuity of exports to EU including traceability, sustainable cocoa standards, eliminating child labor and child trafficking in cocoa production, protecting and restoring forests, and ensuring a living income for cocoa farmers. This resulted in the Strategie nationale du cacao durable (SNCD) adopted by the Government in 2022. Source: https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en. The current agricultural system is characterized by high levels of gender inequality, which drastically hinders the development of the sector. Women are not sufficiently considered in capacity building and extension programs, making them increasingly vulnerable to climate shocks. They also have limited access to information, productive inputs, and collateral, with only eight percent of women holding a land title or certificate of sale, compared with 22 percent of men. This limits their ability to protect their crops or adapt to environmental changes.105 Measures to tackle these issues include safety‑net programs, which support rural poor households, and regular cash transfers to ensure they are not left behind during the shift to more sustainable agriculture practices. 105 MINEDD, 2018. Pour un processus de Plan National d'Adaptation (PNA) qui réponde aux questions de genre en Côte d'Ivoire. 34 Country Climate and Development Report: Côte d’Ivoire The combination of deforestation and Côte d'Ivoire’s aggressive agricultural strategy has led to high GHG emissions. The AFOLU sector is responsible for the largest share (at 62 percent in 2019) of the country’s total annual GHG emissions. This share has been declining recently, however, as fewer areas of forest remain to be logged, and as tree crops like cocoa, cashew, and rubber partly compensate for the loss of forest by sequestering some CO2. Other emissions come from livestock, including cattle, sheep, goats, pigs, and poultry, and from crops and soils, including rice cultivation and the burning of crop residues. As highlighted in Chapter 2, the Government of Côte d'Ivoire has recognized the urgency of both mitigation and adaptation action, as well as coordinated action, such as through the Abidjan Legacy Program, but despite the political commitment to the preservation and sustainable management of the country’s forest and land resources, implementation of the policies and lack of budget remain a concern. For example, (i) “Business as usual” programs have not increased agricultural productivity or limited forest encroachment, so new policies and additional support measures are needed. They include better land‑use planning, securing land tenure, and shifting employment from low‑productivity agriculture to higher productivity activities in the manufacturing and service sectors; (ii) overlapping and often contradictory policies and regulations cause inefficiencies, knowledge gaps, and lack accountability, and fail to increase women’s access to finance, land, and training; and (iii) public expenditure in the agricultural and forestry sectors average less than 4 percent of the country’s total expenditure. MINADER spent less than 10 percent of its total allocation on “green” activities while spending 90 percent on “grey” activities indirectly contributing to deforestation or degradation. Meanwhile, the Ministry of Water and Forests spent only 1.5 percent of its budget on forest restoration.106 (Box 2). Box 2. Gaps Constraining Agriculture and Agri‑Business » BUSINESS ENVIRONMENT GAP. Smaller companies have a lower tax burden than large companies, creating a disincentive for formalization. Frequent inspections by government agencies also increase the cost of doing business, and low competition creates an uneven playing field and entry barriers. » TRANSPORT AND LOGISTICS GAP. High transport costs hamper the competitiveness of Côte d'Ivoire’s exports, and many perishables spoil before they can reach global and local consumers. » FINANCE GAP. Access to credit for small farmers is inadequate due to the limited presence of financing structures such as rural microfinance institutions and rural banks. The weak availability of digital financial services prevents smallholder farmers from building a credit history that could improve their access to the banking system or innovative digital insurance products. Lack of access to finance also constrains the growth of the manufacturing sector. » DIGITAL CONNECTIVITY GAP. Connectivity gaps prevent smallholder farmers from accessing e‑extension services that could improve productivity. There also remains a strong gender gap in accessing the internet, with 56.6 percent of males and 36.4 percent of females having access in 2018. Source: IFC 20201 and ITU 2018. 1 IFC. Country Private Sector Diagnostic: Creating Markets in Côte d'Ivoire: Country Private‑Sector Diagnostic, 2020. 106 According to a REDD+ study, donors spent 55 times more in the agricultural sector than in the forestry sector — thevery low level of funding of the forestry sector reflecting the lack of confidence of donors in its management. 35 Country Climate and Development Report: Côte d’Ivoire Recommendations for policy and investment in agriculture and environment (AE)107 Feasibility and readiness potential of policy reform/ Policy actions and investment programs Investment program financing needs (including public and private, as appropriate) Policy action AE1 – Update,108 prioritize, and operationalize Medium complexity as (i) the SPREF already exist, (ii) there is the SPREF through an action plan depending on forest a willingness to update it with recent data (EU Map) especially categories (gazetted forest and forest in the rural areas) to for the Gazetted forests categories), (iii) the government has leverage investment and to ensure the full coverage of the already engaged in the establishment of an intersectoral Gazetted Forests portfolio for sustainable management by task force including to discuss Gazetted forests agroforestry public and private partners co‑management. Policy action AE2 – New inter‑sectoral institutional High complexity arrangements and investment, management and Due to the fact that cross ministerial arrangements have to be commercialization modalities inclusive of women, for forest established and the role of each entity has to be defined in detail and agroforest products, including timber, carbon, cocoa including for (i) the need to increase climate‑smart agricultural practices, (ii) cocoa coordination between CCC, MINADER & the Ministry for Water and Forests/Ministère des Eaux et Forêts (MINEF) to manage cocoa products from Agroforest Gazetted forests (e.g., traceability, tax, monitoring, private sector supervision, technical assistance for agroforestry and CSA to farmers, social aspects), (iii) carbon with the generation of ER coming from forest activities/MINEF, climate monitoring and commitments led by the Ministry of Environment and Sustainable Development/Ministère de l’Environnement et du Développement Durable (MINEDD) and MEF managing strategy and revenues from ERs and (iv) forests between land tenure processes (AFOR) and tree property (MINEF). Policy Action AE3 – National agroforestry and private High complexity plantations policy Due to (i) for Agroforestry there is a mix of different possibilities to develop this depending on regions, value chains (e.g., Taungya in the north/center and shaded cocoa in the south) and targeted areas (gazetted forests vs Rural Areas) making it difficult to develop a uniform policy on it. Policy Action AE4 — Landreform policies through national Medium complexity customary land registration Builds on high‑level political will as demonstrated by the Government’s recent adoption of the National Rural Land Tenure Strengthening Program (PNSFR), which aims to complete nationwide customary rural land registration (as called for in the Rural Land Policy) by 2033. Investment Program AE1 – Scaling‑up collaborative Medium complexity implementation of SPREF The government has assessed SPREF implementation at US$1 billion, to include both public and private funding, through 2035. It is the first time in Côte d'Ivoire that large‑scale arrangements on how to develop and manage agroforestry with the private sector and different sectoral ministries will be established. Investment Program AE2 — Traceability systems for key Medium complexity value chains to monitor the environmental and social The cocoa sector has initiated several prerequisites (e.g., production processes commodities by 2029 census, producers’ cards, digital platform) to support national cocoa traceability and the EU regulation further will encourage systems to be put in place. Other key value chains (rubber, palm oil) have also ongoing initiatives to establish their traceability systems (US$25 million for cocoa+US$50 million for rubber and palm oil). 107 7 - Climate Change Impact on Agriculture and Environment. A more detailed list is available in Background note ‎ 108 With National Forest Inventory (2021) and national land allocation map (2023). 36 Country Climate and Development Report: Côte d’Ivoire Feasibility and readiness potential of policy reform/ Policy actions and investment programs Investment program financing needs (including public and private, as appropriate) Investment Program AE3 – Expand CSA practices including High complexity agroforestry and resilient irrigation to 30% of agricultural Due to the fact that it is a set of often innovative measures land and 30% of smallholders by 2035 that will require changes in current practices by smallholders and that it requires coordination between public and private investments. Further, there is need to create an evidence base for climate-smart agriculture to facilitate uptake by farmers and use it to underpin national policies. Integration in the national second program on rural development of the following targets: (i)- by 2035 the country will be equipped by 600,000 hectares of sprinkle irrigation109, (ii) 30% of rural farmers will receive training on operation and maintenance of agricultural equipment related to CSA practices. –‌ US$183.5 million for the period 2018‌ 2025. Enhance investments in small scale irrigation schemes by 30%, strengthen the participation of women and youth by 20% by 2035. Investment Program AE4 – National customary land Medium complexity registration program reaching 35% of customary land by –‌ Financing Needs (Public): US$1.05 billion from 2023‌ 33 2029 and 100% by 2033 (total). The feasibility/readiness potential is medium complexity as IP AE4 will benefit from recent policy, legal, institutional, regulatory, and procedural reforms (including the adoption of decree no. 2023‌ 238 of April 05, 2023, which extended the –‌ legal duration of land certificates) provide the pre‑requisites needed to enable the government to achieve this ambitious goal by massively scaling up customary land registration operations. The consistent government budget allocations to the Rural Land Agency (AFOR) for implementing the PNSFR (US$40 million from 2018‌ –‌2023) also reflect the Government’s commitment to this IP, and it is expected that the Government’s budget allocations to AFOR will increase with the Council of Minister’s recent adoption of the PNSFR. Nevertheless, to achieve the PNSFR objectives, further procedural reforms are needed, including fully digitizing the sector. Notes: Blue text denotes the potential for private‑sector funding; brown text shows recommendations that correspond to the macro modeling for adaptation. 109 Aquastat: in 2004 the total area equipped for sprinkle irrigation was 384,000 hectares. 37 Country Climate and Development Report: Côte d’Ivoire 3.4. Urban Development and Infrastructure Connectivity 3.4.1. Urban Development More than half of the urban population Share of urban population living Figure 15.  lives in informal settlements, a in informal settlements proportion that has increased in recent in Côte d'Ivoire decade (Figure 15). Côte d'Ivoire’s urban areas face difficulties in providing basic 100% Sub-Saharan Africa services like transportation, clean water, Côte d'Ivoire and sanitation, especially in informal 80% settlements. More than half of the people People living in informal se lements in many northern cities live below the (% of urban population) poverty line (a rate higher than the nati 60% onal average of 39.4  percent) in part because of lagging development inherited from Côte d'Ivoire’s civil wars in the early 40% 2000s and in 2011. They also face the risk of conflict spillover from the Sahel. 20% Côte d'Ivoire’s urban areas must increasingly cope with climate‑induced disasters such as flooding. In Abidjan, 0% a growing number of people live along 1990 1995 2000 2005 2010 2014 2016 2018 Year its flood‑prone shores. In June 2018 a Data: World Bank WDI single killed more than 20 people, caused Data: World Bank WDI. losses and damages estimated at CFAF 18 billion (about US$30  million), and Share of built‑up area exposed Figure 16.  required an additional CFAF  205 billion to 100‑year floods in Ivorian (US$340 million) in reconstruction costs. cities estimated from global datasets Rising exposure to climate change is increasing the risks of disasters 3.50% (Figure 16). The threats include not only flooding but also associated landslides, 3.00% Built-Up Area Exposed to Flooding rising sea levels, coastal erosion, and more (% of total built-up area) 2.50% extreme heat waves. The risks are highest in the informal settlements, which tend to 2.00% be in the most vulnerable areas and home to the poorest populations. The CIMA 1.50% Research Foundation estimated that the risks to Côte d'Ivoire’s GDP from climate- 1.00% City fueled disasters could rise by a staggering Abidjan Daloa 10 times over today’s level by 2050, mostly 0.50% Bouake Korhogo because of greater exposure. For example, Yamoussoukro Port-Bouët, the suburb of Abidjan that is 0.00% 1985 1990 1995 2000 2005 2010 2015 most threatened by coastal erosion, saw Data: WSF adn FATHOM its density more than double between 2014 Data: WSF and FATHOM. and 2021. 38 Country Climate and Development Report: Côte d’Ivoire Coastal areas face multiple threats, with sea‑level rise compounding the risks of erosion and stronger storms and human activities such as sand mining. Port‑Bouët and Lahou Kpanda (in Grand‑Lahou) are already experiencing rapidly eroding beaches, leading to the destruction of homes and infrastructure along the coast. The degradation of coastal areas including flooding and pollution could cost 4.9  percent of the GDP (equivalent to 2017 US$2  billion) for Côte d'Ivoire110, shattering lives and destroying livelihoods for millions of people. Uncertainties in climate models make it difficult to determine which hazards – floods, sea level rise, or extreme heat – will pose the greatest risks, but all three and associated consequences (e.g.,  landslides) need to be tackled in urban planning. Côte d'Ivoire understands the urgent need to make cities more resilient, but it has only begun to address these challenges. The large uncertainties regarding both, the evolution of future hazards and the dynamics of urbanization (e.g., the rate of development along the Abidjan‑Lagos corridor) make prioritization challenging. Ivoirian cities need to better understand climate impacts like the urban heat island effect and changes in disease incidence and patterns from flooding. Additional key measures include improving and enforcing building codes, building and better maintaining stormwater drainage and sanitation infrastructure, aligning urban planning with sectoral plans (such as energy), improving land use, preserving green spaces, and enhancing the use of nature‑based solutions to slow floodwaters and reduce urban heat island effects. Cities must also take extra steps to adapt to extreme heat, such as educating the public about the health risks of heat exposure, providing cooling centers, constructing buildings and parks to maximize shade, and shifting working hours. They should also strengthen disaster risk management policies and reduce vulnerability through end‑to‑end early warning systems and disaster preparedness, and build adequate financial protection instruments, such as sovereign catastrophe insurance and disaster funds. Cities can take steps to reduce urban emissions that have the advantage of Figure 17. CO2 emissions by sector in Abidjan bringing significant co‑benefits. GHG Agriculture emissions from urban areas are lower 271 t Transport 0% than those from the two other major 172,001 t 10% sectors (oil/gas and agriculture/land use). In most cities, energy production Residential 95,228 t is the largest source of emissions, 6% Energy 742,852 t followed by industry (which includes 43% power generation), transportation, and then buildings (Figure 17). Cities can therefore reduce emissions linked to energy production by improving thermal insulation, air‑conditioning and lighting Industry 704,335 t efficiency in buildings, which will also cut 41% energy costs, reduce air pollution and Source: EDGAR 2015. improve health. Similarly, fostering public transport, e‑mobility, and innovation will reduce emissions, despite the increasing demand for mobility, while also reducing pollution, lowering travel times, and boosting employment opportunities by better connecting residential areas (especially informal settlements) to job centers. 110 World Bank, 2017, The Cost of Coastal Zone Degradation in West Africa. 39 Country Climate and Development Report: Côte d’Ivoire Côte d'Ivoire’s NDC sets ambitious targets for reducing urban emissions. By 2030, it aims to cut the energy used for lighting by 75 percent and to increase the energy efficiency of buildings by 20 percent. It also estimates that the BRT system planned for Abidjan will save 1.2 Mt CO2 by 2050. Reaching these goals, however, will require financial investments and capacity building far beyond current efforts. Recommendations for policy and investment in urban areas (U) Feasibility and readiness potential of policy reform/Investment Policy actions and investment programs Program Financing Needs (including public and private, as appropriate) Policy Action U1 – Updated national Low complexity disaster risk management policy, including A national DRR/DRM strategy, based on an earnest assessment of at subnational/urban level the situation, was adopted last year. A national DRM platform is in place to conduct the policy dialogue. Policy Action U2 – Updated (and enhanced Medium complexity coordination of) urban land use, urban A national urban code exists, detailed urban plans are being planning, urban green public space, and prepared or updated, and a methodology to integrate climate change urban transport planning policies considerations in urban plans is under development. Challenges lie in their alignment with sectoral plans and on the ground implementation, especially as far as accessing and registering land. Policy Action U3 – National cooling High complexity coverage and efficiency policy No proper assessment of the needs currently exists, and such a policy will have to carefully assess how measures might impact mitigation targets. Reliance on nature‑based solutions will also be key. Investment Program U1 – Coastal Priority Investments needs estimated from current Sanitation and and secondary cities (of more than Drainage master plans (SDAD) amount to US$867 million (by 2030). 100,000 people) drainage and flood [this amount is likely underestimated] protection investment program, reaching The SDADs are scheduled for a horizon of 2050/2060 and in Abidjan 33% of the urban population by 2030 only, for the entire master plan, evaluate investments needs to exceed US$2.5 billion for wastewater and stormwater drainage. Investment Program U2 – National urban Investments needs estimated to US$14 million [partial and green space and nature‑based solutions underestimated]. This amount includes the cost for the preservation investment program to tackle heating, of the green peripheric area of Grand Abidjan, a program of flooding, and coastal‑related climate risks, 82,000 trees planting in Abidjan and green investments planned in covering 80% urban areas of cities with Boundiali, Korhogo, Ferke, Odienne, Ouangolodougou and Bouna. A more than 100,000 people by 2030 study on green areas in Abidjan is ongoing under an AFDB’s project and will help evaluate investment needs more precisely. Increase investments in drainage and flood protection by 20% by 2034 by supporting the rehabilitation and upgrading of the protection of polders to protect the coastal areas from tidal flooding and frequent storm surges and improve agricultural production by reducing saline water intrusion in selected polders using climate data and climate projection. Investment Program U3 – Private cooling Not enough information available. This topic is sensitive given equipment purchase by businesses and potential impacts on mitigation. Thus, a simple approach not households in line with standards defined including NBS and based solely on retrofitting needs cannot be in Policy Action U3111 applied. Note: Blue text denotes the potential for private sector funding; brown text shows recommendations that correspond to the macro modeling for adaptation. 111 This program may be difficult to have estimated costs and targets. A possibility is to assume the area (m2) of residential/commercial properties with high‑efficiency AC equipment by a target year, and then use unit costs from other countries as a proxy. 40 Country Climate and Development Report: Côte d’Ivoire 3.4.2. Transport and Digital Connectivity The transport sector is a critical enabler for most economic activities, both in urban and rural areas. In urban areas, it connects city dwellers to jobs and other socioeconomic opportunities. In rural areas, it is an essential link for the agro‑industrial value chains driving the national economy. The transport sector is largely dominated by roads, with a dense road network comprised of 7,500 km of paved roads and 74,500 km of dirt roads.112 Road transportation accounts for the bulk of movements of people and goods in Côte d'Ivoire. Beyond the physical impacts on the infrastructure, climate change is expected to cause serious economic damage by disrupting transport connectivity. Despite the dense road network, connectivity remains a challenge in certain rural areas. About 30 percent of the population, spread over half of the country, is not directly connected to the paved road network. Based on the latest road survey, 15,000 km of dirt roads are not passable, and 20,000 km of dirt roads are severely degraded (with sloughs, slippery coasts, and other critical bridges). The north of the country is the most disadvantaged. The share of the rural population located less than 2 km from a passable road varies from 37 percent in Gontougo to 84 percent in Poro, with an average of 64 percent for 11 northern regions. This means that about 1.5 million people could be isolated in these rural areas. Certain rural areas, especially in the north, are exposed to both drought and flooding. The lack of resilience planning along the primary and rural road networks is a major challenge in the country. Climate data and risks are not systematically included in the planning of construction or maintenance interventions on the transport network, and financial resources allocated to road maintenance in vulnerable areas are insufficient. Based on AGEROUTE’s estimates, maintenance needs are estimated at CFAF 200  billion/year (US$330 million) on the country’s rural road network only (with about CFAF 100 billion/year (US$160 million) estimated for the rural road network in the northern part of the country). The development of a climate‑smart road maintenance strategy for the entire network is expected in 2024. A subsequent program and system (Road Asset Management System – RAMS) for the prioritization of maintenance interventions will be developed and implemented in 2025, with priority given to the investment needs in the most vulnerable zones. In urban settings, a notable aspect for some Ivoirian cities, notably Abidjan and Bouake, is the skyrocketing share of failed trips when considering increasing flood return periods113 (Figure 18). This points to a lack of consideration of high‑return period hydrometeorological events, in network planning, which could prove problematic as return periods will evolve under climate change and calls to the development of clear methodological principles based on updated datasets by AGEROUTE and municipal agencies. 112 AGEROUTE data. 113 A flood return period, also known as a recurrence interval or repeat interval, is an average time or an estimated average time between river discharge flows to occur. 41 Country Climate and Development Report: Côte d’Ivoire Vulnerability to flooding in a 5‑year and 100‑year return period (RP), Figure 18.  selected West African cities a) 5-year RP b) 100-year RP 100 100 Jos, Nigeria Port Harcourt, 90 90 Nigeria Koidu Town, 80 80 Sierra Leone Freetown, 70 70 Waterloo, Sierra Leone Failed routes (%) 60 Failed routes (%) 60 Akatsi, Lome, Benin 50 50 Parakou, Benin Abidjan, Côte d'Ivoire Monrovia, 40 40 Liberia Accra, Ghana 30 30 Abidjan, Côte 45-degree 45-degree d'Ivoire separation line separation line 20 20 Bouake, Côte Bouake, d'Ivoire Côte d'Ivoire 10 10 Yamoussoukro, Yamoussoukro, Côte d'Ivoire Côte d'Ivoire 0 0 Separation line 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Road inundation (%) Road inundation (%) Source: Author’s analysis. Côte d'Ivoire’s ambitions to improve access to sustainable and quality road infrastructure will require important reforms and massive investments over the next decades. The PND 2021‌ 2025 outlines the government’s plan to “facilitate circulation of –‌ people and goods and support the structural and social transformation of its economy”. The goals are to ensure that 61 percent of the primary road network is paved by 2025, with more than 9,500 km of paved road, and to have more than 75 percent of the population living less than 2 km from an all‑season road. The PND’s total budget is CFAF 59,000 billion (equivalent US$ 100 billion) over the period. To achieve this vision, the legal and regulatory frameworks for road infrastructure services must be strengthened. The government must adopt a code for road transportation and develop a sustainable funding strategy for road development and management. Connectivity challenges are not limited to roads. Digital infrastructure will also be impacted by climate change. Landslides, flash floods, and droughts can also affect submarine cable landing stations and data centers, with the latter also being prone to outages or malfunctions caused by intense heat waves, droughts, increased humidity, or a breakdown of the ventilation system due to a climatic shock. As the digital economy has become an important driver of economic growth, innovation, and improved service delivery worldwide, Côte d'Ivoire has launched a set of strategies that set the foundations for the reform agenda in the digital sector. Network coverage is generally good, but some rural areas are not connected. The unique mobile penetration rate stands at 49.13 percent while unique mobile broadband penetration is only 42 Country Climate and Development Report: Côte d’Ivoire 41.35 percent.114, 115 Despite a strong commitment to strengthen its mitigation and adaptation objectives, Côte d'Ivoire’s NDC could better leverage digital technologies to achieve climate goals, by improving resilience through early warning systems, smart agriculture, integrated flood management, smart grid, and smart transportation. Recommendations for policy and investment in transport and digital connectivity (T and D) Feasibility and readiness potential of policy reform/ Policy actions and investment programs Investment Program Financing Needs (including public and private, as appropriate) Policy Action T1 – National climate resilient and Medium complexity low‑carbon urban transport policy A transport adaptation strategy « Stratégie nationale d’adaptation et de résilience des infrastructures de transport aux effets des changements climatiques » is underway with first output expected by end 2023. Urban transport policies in most cities, including secondary cities, still to be developed. Policy Action T2 – National climate‑smart road Medium complexity maintenance strategy and asset management system Climate‑smart road maintenance strategy for the (at the network level) entire road expected in 2024. Subsequent RAMS to be developed in 2025. Policy Action D1 – National policy on climate resilient High complexity and green digital infrastructure and disaster The current regulatory framework does not address management capabilities climate‑related matters. It should be strengthened by including green standards, e‑waste management and other requirements for the deployment of resilient digital infrastructures. Investment Program T1 – Prioritized retrofit/ Rural connectivity project underway but need to maintenance of rural road network by 2029 operationalize the Road Maintenance Fund (Fonds d’Entretien Routier FER) to ensure funding allocation. Estimated maintenance needs of CFAF 200bn/year (US$330 million/year). Investment Program T2 – Urban low‑carbon Mass transportation projects: metro + BRT underway in public transport investment program, reaching Abidjan. Need to take into account secondary cities. 50% of urban population in cities with more than Investments: Approximately US$2 billion for the metro 200,000 population by 2035 line and US$550 million for the BRT. GSMA Intelligence database. Q4 2022. Unique mobile broadband subscriptions per 100 inhabitants. The unique mobile penetration is 114 the number of unique individuals or subscribers as a percentage of the total population. According to ARTCI, which considers the use of multiple SIM cards by subscribers, mobile telephony and mobile Internet penetration 115 rates were 162.1 percent and 85.1 percent respectively as of December 31, 2022. 43 Country Climate and Development Report: Côte d’Ivoire Feasibility and readiness potential of policy reform/ Policy actions and investment programs Investment Program Financing Needs (including public and private, as appropriate) Investment Program D1 – Improve the country’s digital High complexity resilience by: (i) expanding climate‑proof and resilient Preliminary assessment of the investment ranges digital infrastructures (especially in remote and from US$300‌ ‌ 00 million, up to 2030. Complexity –5 vulnerable areas); (ii) pursuing the roll‑out of critical is due to coordination among various stakeholders digital public services, and (iii) leveraging digital tools (Ministries, Departments, Agencies — MDAs-, to support the launch and gradual improvement of the telecommunications operators, technology providers, planned multi‑risk Early Warning System (EWS) while and civil society organizations). It requires careful addressing the needs of different user groups planning, implementation, and continuous improvement to ensure the resilience and effectiveness of the digital infrastructures and services. To attract the necessary investment and ensure the program’s long‑term sustainability, implementing robust government policies and partnerships is the best policy measure. This approach focuses on prioritizing public service delivery, empowering local communities, and fostering collaboration with public and private stakeholders. The government can provide clear guidelines, regulations, and incentives to attract investment in the digital infrastructure sector while actively involving local communities in decision‑making processes and ensuring their needs are addressed. Note: Blue text denotes the potential for private sector funding; brown text shows recommendations that correspond to the macro‑modeling for adaptation. 44 Country Climate and Development Report: Côte d’Ivoire 4. Finding Balance: Long-Term Growth and Climate Action  inding Balance: Long‑Term Growth 4. F and Climate Action "The strongest principle of growth lies in the human choice." George Eliot Côte d'Ivoire faces critical questions on how to respond to climate change to achieve its long‑term growth aspirations. How intensively should it work to adapt to predicted effects caused by climate change, given the uncertainty of global mitigation efforts and its own development aspirations? Can the aspirational development objective be achieved without climate action, and what are the trade‑offs between the two? This section will set the long‑term growth stage for Côte d'Ivoire and identify and quantify the main interfaces between economic development and climate impact, building on but going beyond the sectoral analysis presented in the previous chapter. 4.1. Time for Choices: Côte d'Ivoire’s Long‑Term Drivers of Growth The country is at a crossroads for deciding on its long‑term growth model for the coming decades in order to meet its development ambitions. Authorities have set an ambitious goal in their Vision 2030: that of reaching upper middle‑income country status by 2030 (defined as per capita income of above US$4,045 at constant 2015 US$),116 which requires sustained high growth rates (above 8 percent) for at least another decade (World Bank 2022). Before COVID‑19, the country was on a growth acceleration path.117 Recent global crises have, however, emphasized the imperative of addressing structural bottlenecks to enable an efficient allocation of resources and sustain inclusive growth, driven by higher productivity growth and faster structural transformation of the economy with employment creation in higher value‑added.118 As the country exits the current crises, it faces important choices for the future. Two alternative growth pathways until 2050, reflecting different choices going forward, form the basis for analyzing the impact of climate change on long‑term economic development.119 A first growth path (GP1) supposes that current development ambitions are met by sustaining historical productivity growth rates over the medium term while declining from 2040 onwards, with potential growth converging to 4.8 percent by 2050. This path is underpinned by investment in human and physical capital and improvements in the business environment that raise efficiency of factor allocation as envisaged in the Vision 2030. In contrast, a second growth path (GP2) assumes higher frictions and inefficiencies in the short term, with TFP growth decelerating and resulting in the underutilization of accumulated factors over time. While growth remains high, averaging 6.3 percent in 2030, potential growth converges to the lower level of 3.1 percent in 2050. The energy mix and macroeconomic and political stability assumptions are constant across both growth paths (see Annex 6.3. Macro‑structural modeling for the CCDR) (Table 2). Progressive urbanization would suggest Côte d'Ivoire reaches 70 percent urbanization levels by 2050 along with the process of economic transformation. Demographic trends follow median demographic transition UN population scenarios. Both (baseline) growth pathways assume the respect 116 https://www.worldbank.org/en/country/mic/overview. As the surveys in 2015 and 2018/19 are not directly comparable due to methodological differences, the 2015 numbers reported here are 117 result from a revision to make the 2015 estimates comparable to 2018/19. 118 World Bank, 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining Growth Acceleration. Country Economic Memorandum. © Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO. To model uncertainty with respect to climate change and to economic trajectories the modelling is based on four sets of results 119 combining two alternative growth pathways, and two different climate scenarios. The latter already combine several points to address uncertainty regarding climate change and mitigation pathways of other countries (see Annex 6.1‌ 6.4). –‌ 46 Country Climate and Development Report: Côte d’Ivoire of the WAEMU convergence criteria on the fiscal accounts starting 2025 and remaining constant thereafter. They do not assume actions to increase adaptation to or mitigation of climate change beyond those already planned in the PND 2021‌ 25.120 –‌ Table 2. Key macro variables across two growth pathways, averages for each decade to 2050 2020 2030 2040 2050 2020 2030 2040 2050 Growth Path 1 Growth Path 2 National Income (Constant 2020) Real GDP (CFAF billions) 35,311 72,666 126,391 201,484 35,311 65,366 97,490 131,927 Real GDP (US$ billions) 61 126 220 350 61 114 169 229 Real GDP Per Capita (US$) 2,288 3,673 4,983 6,196 2,288 3,304 3,844 4,057 Real Household Consumption Per capita 1,513 2,218 3,052 3,773 1,513 2,022 2,358 2,433 (US$) Average Annual Growth, % (1) Real GDP 7.1 7.5 5.7 4.8 7.1 6.4 4.1 3.1 Real GDP per Capita 4.6 4.8 3.1 2.2 4.6 3.7 1.5 0.5 Shares In GDP (% of GDP) Private Consumption 68.7 62.7 63.6 63.3 68.7 63.6 63.8 62.3 Government Consumption 9.3 9.8 10.0 10.1 9.3 10.6 10.9 10.5 Total Investment 26.2 26.6 25.1 22.3 26.2 22.1 18.0 15.2 Government Investment 7.8 5.5 4.4 3.9 7.8 5.8 4.3 3.7 Net Exports 2.4 2.2 2.8 6.1 2.4 5.3 9.3 14.7 SectoraI shares in GDP (% of GDP) Agriculture 16.7 13.5 12.2 10.9 16.7 13.4 11.7 9.7 Industry 22.8 22.3 21.6 20.9 22.8 22.2 21.2 20.1 Services 60.5 64.2 66.2 68.2 60.5 64.4 67.1 70.2 Population and employment Total Population (Millions) 26.8 34.4 44.1 56.5 26.8 34.4 44.1 56.5 Total Population growth rate (%) 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Working Age Population (Millions) 15.5 20.9 26.8 33.3 15.5 20.9 26.8 33.3 Working Age Population growth rate (%) 3.1 2.8 2.3 2.1 3.1 2.8 2.3 2.1 Labor Participatlon Rate (%) 82.2 69.6 67.9 67.1 82.2 69.6 67.9 67.1 Unemployment Rate (%) 26.7 29.7 29.1 28.9 26.7 30.0 29.1 28.9 Source: World Bank staff estimations. Note: (1) Average annual growth since preceding period (2010 for the first column). Long‑term growth will depend on accelerating productivity growth and keeping up factor accumulation. TFP has been a driver of growth in Côte d'Ivoire since the end of the –1 political crises in 2011: it contributed 3.7 percentage points (ppts) to growth in 2012‌ ‌8, compared with –0.2  ppts in the previous decade (2000‌ ‌1). Before 2012, growth only –1 accelerated during periods of accelerated factor accumulation, i.e., higher investment in physical capital and employment growth, which usually coincided with a rise in commodity prices (World Bank 2019). Agricultural productivity has remained low. The country‑growth model has relied on land expansion, intensive labor farming and limited use of technology. As a result, GDP per capita levels have remained flat. This is notable compared with Korea, for example, a country that started at the same level of income per capita in the 1960s 120 As part of the West Africa Economic Monetary Union, Côte d'Ivoire complies with convergence criteria that were kept unchanged over the medium to long term. 47 Country Climate and Development Report: Côte d’Ivoire (World Bank, 2022; Figure 19). Korea’s development model combined investments in human capital and physical capital accumulation with strong TFP growth. Furthermore, recent TFP gains in Côte d'Ivoire were driven by the improved use of existing capital in the immediate post‑crisis period (International Monetary Fund, 2016), and its contribution to growth has declined since 2015. The accumulation of physical and human capital is also crucial as the country continues to converge to higher per capita income levels. In 2019, the private capital‑output ratio was still one of the lowest in SSA as the country emerged from decades of underinvestment and poor maintenance of infrastructure. Despite improvements in the last ten years, human capital levels are also below peers, as discussed in Chapter 1. Negative productivity growth has limited Côte d'Ivoire’s potential Figure 19.  GDP per capita, PPP (constant 2017 international $) 50,000 Korea, Rep. 45,000 Sources of growth 40,000 150 35,000 100 30,000 50 25,000 0 20,000 –50 Côte d'Ivoire 15,000 Côte d'Ivoire (1991–2017) Korea (1970–2010) 10,000 Physical capital Labor Human capital TFP 5,000 0 90 19 1 92 93 94 95 96 19 7 98 20 9 00 20 1 02 20 3 04 20 5 06 20 7 08 09 10 20 1 12 13 14 15 16 20 7 18 20 9 20 21 9 0 1 9 0 1 0 0 9 1 20 20 20 20 20 19 20 20 20 20 20 19 20 19 19 19 19 19 20 20 19 20 Source: World Bank. Note: Authors’ analysis based on World Development Indicators (WDI) and Back to the Future (World Bank 2021). Investment is needed to increasingly drive economic development and job creation. Reducing allocative inefficiencies created by market distortions is central to attracting private investment and enhancing the use of production factors. Competition is perceived as weak in Ivorian markets. There is a relatively high perceived level of operational business risk related to the lack of a level playing field, a perception that has not changed over the past five years. According to the latest World Economic Forum’s Global Competitiveness Report, Côte d'Ivoire ranked 106th out of 140 countries in terms of the perceived extent of market dominance in 2019. Limited competition in key sectors, notably transport, financial services, and telecom, undermines private‑sector investment.121 Both public and private investment increased and doubled since 2012,122 but remain below comparable countries such as Ethiopia (38 percent), and only recently at par with Ghana (23 percent) and Senegal (24 percent). Sustaining rapid growth without respective rates of investment is rare.123 In the medium term, as Côte d'Ivoire continues to implement reforms to support the development of the private sector, private investment is expected to become an increasingly important driver of growth. 121 IFC. Country Private Sector Diagnostic: Creating Markets in Côte d'Ivoire: Country Private Sector Diagnostic, 2020. In Côte d'Ivoire, the total investment rate rose from an annual 10 percent of GDP in 2000–11 to 18 percent in 2012–18, and it averaged 122 close to 24 percent in 2022. Evidence suggests both private and public investments display high and similar returns, largely reflecting the fact that the country is emerging from years of underinvestment in key infrastructure, with potential constraints on credit preventing efficient investment decisions and high perceived investment risk (World Bank, 2022). 123 Based on the experience of high growth economies, the Commission on Growth and Development suggests total investment rates of 25 percent of GDP or more for strong and sustainable growth. Notable examples of countries that could achieve sustained high investment‑led growth (with investment above 30 percent of GDP) are Korea (1970s and 80s), Japan (1960s), and China (1990s). 48 Country Climate and Development Report: Côte d’Ivoire At the same time human capital needs to increase. Investment at all levels of education (from foundational learning to higher education, technical and vocational education training, and life‑long learning behaviors, including in rural areas) is vital to build a capable labor force that can respond to the demand of higher‑value added sectors. Education can foster behavioral change, enable communities to adapt to the challenges posed by climate change, and create employment opportunities in new areas. As the demographic transition deepens, Côte d'Ivoire can benefit from a young labor force only if absorbed by higher‑productivity jobs. The creation of higher productivity jobs is central to achieving sustained inclusive growth for most countries in SSA as they face the challenge of progressing along the income‑per‑capita ladder and reaping the demographic dividend, with millions of youths entering the labor force every year. By 2050, Côte d'Ivoire’s population will double, and the share of the urban population will reach between 70 percent. Although the rural population will grow in absolute terms, migration of youth to urban areas will have important social and economic implications, in terms of inequality, provision of urban infrastructure and services, jobs and productivity. The country has significant potential in developing higher value‑added activities in agribusiness, manufacturing, and services that can foster structural transformation. There are signs that structural change induced growth over the last decade, as agriculture has seen the largest relative loss in employment despite representing a relatively large share of value‑added. However, most of this labor force ended up in low‑productivity and largely informal trade and distribution services, such as commerce, rather than formal manufacturing and modern service industries.124 Going forward, fostering structural transformation of the economy to create jobs able to meet a more qualified labor supply is possible. Manufacturing sectors with a potential for job creation include cocoa, fruits, and nuts. Diversifying service activities and upgrading quality is possible by promoting entrepreneurial skills in microenterprises and small- and medium‑sized enterprises (SMEs). With a burgeoning industrial mining industry, there is strong potential to increase well‑paying jobs in the fields of science, technology, engineering, and math with particular attention paid to female participation.125 Interventions providing women with information on relative earnings potential in male versus female‑dominated sectors can encourage them to switch to vocational training courses that given them access to the former.126 Vision 2030 underpins the possible growth pathways for Côte d'Ivoire, but challenges are mounting. The nation’s development vision assumes that investments in human capital, infrastructure, and structural reforms are sustained in the coming decades. Even beyond climate‑change pressures, the country faces daunting issues. Financing the development agenda has never been more uncertain in a world of increasing borrowing costs, declining official aid flows, and increasing fragilities to debt and fiscal sustainability. Much of the development costs will need to be covered by the private sector, which requires political and macroeconomic stability, transparency, and good governance. Regional insecurity in the Sahel is also rising and affecting countries along the Gulf of Guinea including Côte d'Ivoire with increasing pressure for exceptional military spending. Climate change adds to these costs and respective tradeoffs need to be adequately weighted. 124 World Bank. 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining Growth Acceleration. Country Economic Memorandum. © Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO. For an analysis of factors influencing whether women entrepreneurs decide to operate in more profitable male‑dominated sectors, see 125 Breaking Barriers report. 126 Gassier, Rouanet and Traore, 2022. 49 Country Climate and Development Report: Côte d’Ivoire 4.2. Really No Choice: The Cost of Climate Inaction for Long‑Term Growth All else unchanged, climate change is expected to reduce real GDP per capita by up to 13 percent by 2050. The economic impacts of climate shocks will depend on the interaction between the climate change transmission channels, the underlying socioeconomic structure of a country, and its trajectory. To highlight this interdependence, we report two alternative climate scenarios representing qualitative differences in climate shifts: the dry/hot scenario (dry) incorporates cases in which high mean temperature changes are paired with low mean precipitation changes, whereas the wet/warm scenario (warm) incorporates cases in which high mean precipitation changes are coupled with relatively low mean temperature changes. A more detailed explanation of scenario selection and sourcing can be found in Annex 6.4. Details on climate change scenarios. Without any additional adaptation effort, average annual GDP losses are expected to increase over time and reach up to 12.9 percent of GDP by 2050. Annual losses of GDP due to climate impacts are projected to be 3‌ 4.5 percent by 2030 and rising to 8‌ –‌ –1‌ 3 percent by 2050 (Figure 20). This entails an equivalent loss of up to 15 percent in real per capita income in the most adverse climate scenario: GDP per capita is over 13 percent lower in the dry scenario by 2050; in contrast, the decrease in GDP per capita is roughly half that if climate change leads to a wet/warm outcome. This is mostly due to the prevalence of productivity loss from labor heat stress as the driving source of economic losses from climate change. Under these conditions, Côte d'Ivoire would only reach upper middle‑income country level in the late 2040s under the first growth path (GP1), and after 2050 in the second growth path (GP2), compared with the late 2030s in the initial growth pathways modeled. Losses due to climate shocks without adaptation (deviations from baseline) Figure 20.  significantly delay convergence to potential Hot/dry scenario Warm/wet scenario % % 0 0 –1 –2 –2 –4 –3 –6 –4 –8 –5 –6 –10 –7 –12 –8 –14 –9 2020 2030 2040 2050 2020 2030 2040 2050 GDP GP1 GP2 Source: World Bank. Notes: (1) Authors’ estimations. (2) % deviations from baseline. 50 Country Climate and Development Report: Côte d’Ivoire Climate change is set to impact growth principally through lower labor productivity. Climate change affects the Ivorian economy principally through changes to labor productivity and increased costs of capital repair and renewal. Effects of higher average temperatures on labor heat stress, human health, and availability of water supply and sanitation all directly impact the economy primarily through labor productivity. In contrast, the impacts of inland flooding, sea‑level rise, and erosion more directly impact the use and availability of capital goods. They also affect land use and as such, sector‑level productivity, for example, affecting agriculture through crop yields (see Annex 6.5. Impact channels and selective adaptation channels). By far, the largest impact from climate change on the economy is on labor productivity. Overall, under higher temperatures, the negative labor productivity127 shock to GDP is expected to average 9.5 percent by 2050 (under a hot/dry scenario), Figure 21. Decreases in labor productivity have large effects on multiple aspects of the economy, including export competitiveness or the return to capital investment. Effects are also large because of a significant informal sector, with about 85 percent of employment estimated to be informal. Most of the impact on the economy happens through labor productivity (heat) Figure 21.  GDP Impacts in 2050 by Damage Channels (GP1) % GDP 2 0 –2 –4 –6 Dry/hot without adaptation Wet/warm without adaptation –8 –10 –12 Crops Produtivity Health Crops SLR and Inland WASH Livestock Tourism (rainfed) (heat) (disease) (erosion) storm surge flooding Source: World Bank. Note: Authors’ estimations. Labor heat stress is expected to decrease labor productivity across all sectors, but mostly in agriculture and industry. The overall productivity loss to agriculture will potentially amount to 17.3 percent by 2050 in the worst case, whereas the effect on services could potentially be as little as 5.6 percent in the wet/warm case by 2050 (Figure 22). However, the potential loss to labor productivity from heat stress varies significantly by region, with the most populated region, Abidjan, exhibiting the largest labor‑supply shocks (Figure 23) due to the impact on manufacturing activities. Following the methodology applied by the ILO 2019, labor productivity losses are calculated based on worker occupations, daily 127 workday temperatures, and mean monthly humidity levels, adjusting for the proportion of workers located inside and assumed use of temperature‑controlled environments based on mean household incomes. 51 Country Climate and Development Report: Côte d’Ivoire Labor productivity will decline the most in agriculture and industry by 2050 Figure 22.  Labor Productivity Shock, 2041–2050 0% –5% –5.6% –7.3% –6.8% –10% –15% –13.9% –16.6% –17.3% –20% Agriculture Industry Services Dry/Hot mean Wet/Warm mean GCM range Source: World Bank. Note: Authors’ estimations and IEc. Labor productivity will decline most in the South, where 60 percent of Figure 23.  value‑added is generated Industry labor productivity impact (%), by 0.5-degree grid cell, 2041–2050 Dry/Hot mean Wet/Warm mean 0% –3% –5% –8% –10% –13% –15% Source: World Bank. Note: Authors’ estimations and IEc. Human health impacts are also likely to place a significant drag on the economy, accounting for an estimated decrease in the effective labor supply of roughly 2.8 percent in the hot/dry climate scenario. Impacts include increased transmissibility of vector‑borne diseases (malaria and dengue) and water‑borne (diarrheal) diseases, higher mortality, and reduced ability to work due to illness or caring for relatives (Figure 24). This will particularly affect women, who are more exposed to these diseases.128 Research shows women are more likely than men to adopt negative coping strategies, such as skipping meals.129 Another risk facing girls is early marriage. Income shocks affect the age of marriage because marriage payments are a source of consumption smoothing, particularly for a woman’s family. Droughts, which reduce annual crop yields by 10 to 15 percent can increase the annual hazard into child marriage by 3 percent in SSA.130 The largest danger to human health comes from hotter scenarios, which will increase both waterborne pathogens and the prevalence of non‑injury‑related deaths as environments exceed optimum temperatures for human habitation.131 128 MINEDD, 2018. Pour un processus de Plan National d’Adaptation (PNA) qui réponde aux questions de genre en Côte d'Ivoire. 129 Erman et al. 2021; Shoji, 2010. 130 Corno, Hildebrandt and Voena, 2021. 131 Romanello et al., 2021. 52 Country Climate and Development Report: Côte d’Ivoire Changes in illness/mortality/morbidity are expected to depress growth Figure 24.  Change in illness mortality/morbidity Dengue Heat-related 1% 1,200% 1,026% 1% 1% 1% 800% 1% 543% 0% 400% 205% 532% 0% 325% 0% 0% 0% 130% Malaria Water-borne 6% 100% 89% 5% 4% 3% 75% 50% 47% 0% 25% 14% 39% –5% –3% 21% –5% 0% 5% –7% 2021–2030 2031–2040 2041–2050 2021–2030 2031–2040 2041–2050 Dry/Hot mean Wet/Warm mean GCM range Source: World Bank. Note: Authors’ estimations and IEc. Overall, decreased labor productivity from combined heat stress and health costs could reduce domestic production by up to 10 percent by 2050. This would make the country less competitive on a global scale, leading to a decrease in overall exports and a decrease in domestic consumption. This dynamic would result in a much larger current account deficit by up to 11 percent, and it may dampen the overall effect on net exports, as domestic demand will be harmed by the loss of earning potential. Negative shocks to physical capital are less pronounced but increase over the long run Negative shocks to the physical capital stock are less pronounced, likely owing to the low capital stock at baseline. The expected annual damages from climate change to national capital under historical and projected conditions for the region of Abidjan are expected to be about 0.1 percent at maximum (Figure 25). Overall, the impact of these shocks are expected to be 1.7 to 2.0 percent of GDP by 2050. Notably, it increases significantly from a low of 0.2 percent of GDP in 2020s. However, the impact on physical capital is likely under‑estimated, so that climate proofing future capital stock could bring significant gains, as discussed earlier. Sea‑level rise and storm surges primarily and inland flooding are expected to drive most of the negative shocks to economic output. Overall, the measured impact from these shocks is likely in the order of 1.7 to 2.0 percent of GDP by 2050, with the vast majority (1.6 to 1.9 percent) from storm surges (Figure 26). Expected annual damage to national capital in the city of Abidjan Figure 25.  Expected Annual Damage (% of national capital) Historical 2010–2039 2035–2064 2060–2089 2070–2099 0 0.2 0.4 0.6 0.8 1.0 Historical SSP SSP SSP Source: World Bank. Note: Authors’ estimations and IEc. 53 Country Climate and Development Report: Côte d’Ivoire Storm‑water surges are potentially the most destructive to infrastructure Figure 26.  Capital shock from Sea Level Rise and storm surge, as compared to 2020 1.4 1.2 1.0 Capital shock (%) 0.8 0.6 0.4 0.2 0 2020 2030 2040 2050 SLR Loss Surge annual damage SSP to SSP range Source: World Bank. Note: Authors’ estimations and IEc. Agriculture stands to be the most directly affected sector. The agricultural sector accounted for 22 percent of GDP and 60 percent of total export earnings in 2021, but its labor‑intensive model makes it vulnerable to climate change. It remains the main employer, despite being expected to progressively lose in its relative importance over the next 30 years under both growth pathways. The country’s labor‑intensive farming model with limited capital endowments and use of technology is not only inefficient but particularly vulnerable to climate shocks. Overall, the reduction in crop production could be as high as 16 percent by 2050.132 Rice, plantain, and cassava may see the largest potential decline at 30 percent by 2050 in the most extreme hot/dry climate scenario (Figure 27). Cocoa, Côte d'Ivoire’s main export crop, is also expected to see a large decline of 15 percent by 2050 under the hot/dry scenario. The reduced productivity of cocoa could push cocoa farmers to either adapt their farms or to migrate, leading to potential land conflicts in new regions.133 Higher temperatures will affect key crops, including cocoa Figure 27.  Rainfed Crop Production Shock, 2041–2050 3% 2% 2% 2% 1% 1% 1% 0% –1% –1% –2% –4% –2% –4% –9% –8% –10% –10% –12% –15% –15% –16% –20% –19% –27% –26% –30% –30% it in e ne s a ut va oa ee on ze m an ic u ta N sa ai oc a Fr R Ya an rc an o M o w as C C lm C ga he B Pl C Pa Su as C il O Dry/hot mean Wet/warm mean GCM range Source: World Bank. Note: Authors’ estimations and IEc. Crop losses were calculated based the methodology outlined in the Food and Agriculture Organization’s (FAO) Irrigation and Drainage 132 Paper 66, Crop Yield Response to Water (Staudt et al., 2012). Specifically, an overlay of production zones from the FAO’s crop calendar (FAO 2022) is compared with expected rainfall maps and crop data on potential evapotranspiration, monthly crop water demand coefficients, and yield response to hydration changes. The results are also corrected for adjusted drainage qualities of the soil and potential crop heat stress. 133 MINEDD, 2018. Pour un processus de Plan National d’Adaptation (PNA) qui réponde aux questions de genre en Côte d'Ivoire. 54 Country Climate and Development Report: Côte d’Ivoire Livestock will be severely harmed by increased temperatures, affecting one of the key mechanisms for rural populations to accrue wealth. Climate change poses risks to livestock production both directly from increasing heat stress on animals and indirectly through the availability of feed sources (Figure 28).134 Overall, the decline in agricultural yields will decrease GDP per capita by 1.6 to 1.9 percent, and agriculture’s share of GDP is likely to decrease by 0.3 to 1.5 percent, compared with the baseline projections for 2050. In contrast to the muted effect on economic performance, the effect on poverty is likely to be more pronounced, with the most vulnerable subsistence farmers directly affected. Livestock productivity stands to be significantly affected Figure 28.  Change in livestock productivity from climate change, kg/animal/year Ca le-Meat Ca le-Milk Chickens-Eggs Chickens-Meat 155 7.200 1.1 149.8 149.8 149.9 99.9 7.1 1.05000 150 100 1.0 7.100 7.1 1.0 88.8 7.0 83.7 7.000 1.04980 1.0 7.0 145 80 84.2 144.2 6.900 1.0 143.1 6.9 1.04960 140 69.3 6.800 138.3 60 60.9 6.8 1.0 6.700 1.04940 Goats-Meat Sheep-Meat Swine-Meat 0 0 50 –3 –4 – 14.10 21 41 31 40.900 20 20 20 9.40 9.3 40.8 9.3 9.3 13.80 13.7 13.7 13.7 40.8 40.800 40.8 9.20 13.50 40.700 40.7 9.00 9.0 13.3 13.20 40.7 8.9 13.2 8.80 40.600 8.8 12.90 13.0 40.6 0 0 50 0 0 50 0 0 50 –3 –4 –3 –4 –3 –4 – – – 21 21 21 41 41 41 31 31 31 20 20 20 20 20 20 20 20 20 Historical value Dry/hot mean Wet/warm mean Source: World Bank. Note: Authors’ estimations and IEc. Climate inaction will also slow the pace of poverty reduction. Given the estimated economic losses from climate shocks, the pace of poverty reduction is expected to slow by 2050. Poverty headcount (US$3.65 per person per day, purchasing power parity/PPP 2017) is estimated to decline from 39 percent in 2020 to 16.7 percent in 2050 under the second growth path (GP2), a reduction of more than 20 percentage points driven by the increase in economic activity (real GDP), especially in the service sector (Figure 29).135 Assuming the faster growth path 1 (GP1), non‑mitigated climate change would prevent roughly 1.63 million people from escaping absolute poverty by 2050. We measure these losses based on a combination of animal and product‑specific equations that relate a daily temperature‑humidity 134 index (THI) with animal‑specific tolerance thresholds for livestock and through results obtained from the crop production channel to the corresponding portion of the domestically produced feed. 135 Adaptive social protection systems consist of four main building blocks: (i) programs that enhance resilience outcomes; (ii) financing to allow for timely response; (iii) data and information to understand sources of risk and vulnerability, and (iv) institutional arrangements and partnerships to support coordination across sectors. The adaptive approach integrates social protection interventions with disaster risk management and climate change adaptation to better anticipate and respond to shocks. 55 Country Climate and Development Report: Côte d’Ivoire Poverty headcount estimates using microsimulation (Growth Path 2) Figure 29.  Poverty headcount GP2 (without adaptation) Deviations from GP2 baseline Poverty 50 7 Percentage points from GP2 baseline (%) 6 Poverty headcount rate (%) 40 5 30 4 3 20 2 10 1 0 0 2020 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050 Baseline GP2 Dry/hot GP2 Wet/warm GP2 Dry/hot Wet/warm Source: World Bank. Note: (1) Authors’ estimations and IEc. (2) Poverty microsimulations based on household level data from the EHCVM 2018/19 and using macroeconomic projections from a country‑specific Climate Change Macro‑Fiscal Model (CC‑MFMod) for the 2020‌–‌50 period. However, climate inaction is expected to significantly disrupt this trajectory, slowing down the pace of poverty reduction under the two alternative climate scenarios. In the hot/dry climate scenario and GP2, poverty is expected to decline to 23.4 percent by 2050, more than 7 percentage points above the baseline poverty forecast for 2050, but more than 15 percentage points lower than the poverty headcount in 2020. Similarly, the pace of poverty reduction under the wet/warm climate scenario would be slower, reaching 20.7 percent in 2050 (or 4 percentage points higher than under the GP2 baseline in the same year). The more pronounced slowdown in the pace of poverty reduction under the dry/hot climate scenario would be explained by the productivity loss from labor heat stress. Poverty projections under both growth pathways suggest that spatial disparities will continue in the medium run. The most recent survey data suggests that from 2015 to 2018, improvements in monetary welfare have been tilted toward urban households, which in turn has exacerbated regional disparities and the urban‑rural gap. This result was explained because economic growth during this period was driven by sectors whose activities mainly take place in urban areas and, specifically, in Abidjan. The north and west of the country (currently showing higher poverty rates, especially in the rural areas) will continue lagging the better‑off areas, such as Abidjan, in terms of poverty reduction, since smallholder farmers are particularly vulnerable to climate variability. The toll of these climate stresses is likely to fall disproportionately on the poor and most vulnerable – women, youth and migrants – who have the least ability to cope with their more limited access to resources (e.g., land), information (e.g., on irrigation), and finance. 4.3. Making Choices Nonetheless: The Benefits, Opportunities, and Costs of Resilience Côte d'Ivoire’s economic transformation and human development requires significant investment in adaptation and mitigation across all sectors. In this CCDR, we model a set of key adaptation actions in selected sectors (See Annex 6.5 — Modeling adaptation to climate change — the four channels selected). The figures should be interpreted with caution; they provide an indicative range of the potential benefits that could arise from early investments in adaptation, mitigation, and resilience in key vulnerable sectors. 56 Country Climate and Development Report: Côte d’Ivoire The CCDR models the benefits (in terms of reduced GDP losses) and costs of high potential adaptation interventions for four of the impact channels: 1. Heat adaptation considers the increased use of cooling technology for the indoor workforce as the economic structure shifts toward greater formal employment in services and manufacturing, and agriculture becomes less labor‑intensive. Heat stress is also likely to push vulnerable groups out of agriculture and toward urban areas. The scenario modelled considers an increase from 5  percent usage across sectors at baseline to up to 25 percent by 2050. Overall, the impact of heat stress on labor productivity is mitigated by about half in services and manufacturing (Figure 30). 2. Crop production erosion considers a high adoption rate of up to 20 percent by 2050 of a combination of actions that include implementing: (i) conservation tillage,136 and (ii) shifting to a cover crop planted in the off season (i.e., the analysis is based on the use of velvet beans). These options all focus on four key crops (cassava, rice, yams, and maize). 3. Rainfed crops adaptation measures include the development of new irrigation infrastructure to address water stress for priority crops (maize, rice, yams, cassava, and cocoa); crop switching by increasing the production share of climate‑resilient crops (cashew nuts and cotton) and increasing the share of heat‑tolerant crop varieties (maize, rice, yams, cassava, and cocoa). 4. Coastal Flooding adaption assumes that new infrastructure is built at a higher elevation starting in 2025137 relative to the historical mean sea level. This new elevation is above the projected sea‑level rise of 1 meter by 2050 for SSP3‌ –7‌ 0 (Figure 31). Two additional types of adaptation are included for Abidjan – building new infrastructure away from the most hazardous areas (i.e., outside of the historical 20‑year floodplain), and protecting existing infrastructure (Figure 32). These measures should be complemented by targeted actions on climate‑related investment, including: » Conducting periodic risk assessments of public assets and contingent liabilities owned by general government institutions and developing the use of markets and insurance instruments (see Chapter 5). » Improving the efficiency of climate‑resilient public investments by: (i) systematically tagging and monitoring that expenditure in the budgets of the national and local authorities; and (ii) evaluating projects using a social welfare‑equivalent discount rate (in contrast to a market‑based discount rate) to enhance rapid interventions. » Adopting green public procurement procedures such as construction standards or land‑use regulations that explicitly account for climate risks (including for state‑owned enterprises). Conservation tillage, or minimum tillage, is a broadly defined practice that includes no‑till, strip till, ridge till, and mulch till systems. 136 These techniques maintain plant residues on at least 30 percent of the soil surface after tillage activities. 137 As reported by the UN World Urbanization Prospects in 2018. 57 Country Climate and Development Report: Côte d’Ivoire » Enhancing the public‑private partnerships (PPP) legal framework to create incentives for greater private‑sector participation in climate resilient‑infrastructure projects by allowing risk‑sharing on investments in new technologies, innovative business practices, and climate‑smart performance‑based contracts. » Considering tax incentives to stimulate private operators to spend more on improving the resilience of their own assets or to expand their investments for the well‑being of the community through corporate social responsibility measures. Increasing the use of cooling technology by 25 percent by 2050 halves the Figure 30.  impact of heat stress on services and manufacturing labor productivity Côte d'Ivoire Labor Productivity Shock | 2041–2050 Reference (5%) Adaptation (+15%) Adaptation (+25%) 1.0% –0.2% 0% –2.1% –2.4% –4.9% –5% –5.6% –5.8% –6.8% –7.3% –7.3% –7.3% –10% –10.0% –11.0% –15% –13.9% –14.5% –15.6% –16.6% –17.3% –20% y y y re es re es re es r r r st st st tu tu tu ic ic ic du du du rv rv rv ul ul ul ric ric ric Se Se Se In In In Ag Ag Ag Dry/hot mean Wet/warm mean GCM range Source: World Bank. Note: Authors’ estimations and IEc. Expected capital damage from storm‑water surges due to sea‑level rise is Figure 31.  almost halved by 2050 if adaptation measures are deployed Expected annual damage from storm surge - SSP3-70 1.4 1.2 Capital Damaged (%) 1.0 0.8 0.6 0.4 0.2 0 2030 2040 2050 Without adaptation With adaptation Source: World Bank. Note: Authors’ estimations and IEc. 58 Country Climate and Development Report: Côte d’Ivoire Expected capital damage in Abidjan from pluvial flooding is almost halved by Figure 32.  2050 if existing infrastructure is protected Expected annual damage pluvial flooding - SSP3-70 0.06 0.05 Capital Damaged (%) 0.04 0.03 0.02 0.01 0 2030 2040 2050 Without adaptation Medium protection High protection Source: World Bank. Note: Authors’ estimations and IEc. Overall, the modeled adaptation actions can significantly reduce annual economic losses from climate change, almost halving them to between 3‌ 8 percent of GDP by –‌ 2050. Losses increase at a much slower pace under the wet/warm scenario (Figure 33). Some adaptation measures could bring about gains greater than the losses avoided (Figure 34). For example, for the rainfed crop yields channel, adaptation through expanded irrigation leads to an improvement in output. Côte d'Ivoire’s overall GDP losses are halved Figure 33.  Hot/dry scenario Wet/warm scenario GDP GDP % % % % 0.0 1.2 0.0 1.2 –1.0 1.0 –0.5 1.0 –2.0 –1.0 –3.0 0.8 0.8 –4.0 –1.5 0.6 0.6 –5.0 –2.0 –6.0 0.4 0.4 –2.5 –7.0 0.2 0.2 –3.0 –8.0 –9.0 0.0 –3.5 0.0 2020 2030 2040 2050 2020 2030 2040 2050 GP1 GP2 GP1 GP2 Source: World Bank. Note: Authors’ estimations. 59 Country Climate and Development Report: Côte d’Ivoire Overall GDP losses can significantly decline with the right adaptation action Figure 34.  (without adaptation left; with adaptation right) Dry/hot Dry/hot % GDP % GDP 2 2 0 –3 –2 –4 –6 –8 –8 –10 –13 –12 –14 –18 –16 2030 2040 2050 2030 2040 2050 Wet/warm Wet/warm % GDP % GDP 2 0 –1 –2 –4 –6 –6 –8 –10 –11 –12 –14 –16 –16 2030 2040 2050 2030 2040 2050 Crops (rainfed) Produtivity (heat) Health (disease) Crops (erosion) SLR and storm surge Inland flooding WASH Livestock Tourism Total GDP Impact Source: World Bank. Note: Authors’ estimations. In terms of poverty, investment in adaptation, mitigation, and resilience would allow the economy to partially avoid a slowdown in the poverty‑reduction trajectory. The microsimulation exercise suggests that this would be especially true under the dry/hot alternative climate scenario (Figure 35). For instance, under the baseline in the second growth path (GP2) without adaptation, the poverty headcount (US$3.65 per person per day, PPP 2017) would decline from 39 percent in 2020 to 16.7 percent in 2050, about 22 percentage points lower than the corresponding baseline in 2050, and fall to 23.4 percent by 2050 in the hot/dry climate scenario (for the GP2), 15 percentage points lower than in 2020, but about 7 percentage points above the corresponding GP2 baseline poverty projection for 2050. Similarly, under the GP2 without adaptation, poverty in the wet/warm climate scenario in 2050 would reach 20.7 percent. In contrast, when selected adaptation, mitigation and resilience investments are made, we project poverty will fall to 16.4 percent in the GP2 baseline and to 20.5 percent in the hot/dry alternative climate scenario in 2050, while it would decline to 17.9 percent in the wet/warm climate scenario. These numbers translate into 1.4 to 1.5 million 60 Country Climate and Development Report: Côte d’Ivoire fewer people living under the poverty line in 2050, explicitly due to investment in adaptation measures. As the economy shifts towards greater formal employment in services and manufacturing, and as agriculture becomes less labor‑intensive, most of the impact of potential adaptation interventions are expected to come through the effect of resilience investment on labor productivity, specifically by mitigating some of the expected productivity losses from labor heat stress. Moreover, overall, the impacts of the potential adaptation interventions in poverty become more significant and are especially relevant in the hot/dry scenario. Poverty deviations from GP2 baseline without adaptation (left) and with Figure 35.  adaptation (right) Deviations from GP2 baseline Poverty Deviations from GP2 baseline Poverty (without adaptation) (with adaptation) 7 7 Percentage points from GP2 6 6 Percentage points from GP2 5 5 4 4 baseline baseline 3 3 2 2 1 1 0 0 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050 Dry/hot Dry/hot Wet/warm Wet/warm Source: World Bank. Note: (1) Authors’ estimations. (2) Poverty microsimulations based on household level data from the EHCVM 2018/19 and using macroeconomic projections from a country‑specific Climate Change Macro‑Fiscal Model (CC‑MFMod) for the 2020‌–‌2050 period. Climate interventions, however, involve significant investments, even if the benefits outweigh the costs. Financing needs are defined according to a strict additionality definition,138 which is the difference between optimal investment levels with and without climatic shocks. Under this definition, and assuming GP1, Côte d'Ivoire would need additional annual investment of 0.1‌ –‌ –0 0.2 percent of GDP to 2030,rising to 0.3‌ ‌ .5 percent of GDP to 2040 and reaching 0.4‌ ‌ .7 percent of GDP in 2050. That is an annual average –0 of 0.2‌ 0.4 percent in the period as a whole. The adoption of strict additionality to define –‌ climate change adaptation needs excludes the cost of closing the gap to achieve an optimal level of adaptation to current climate conditions, however. Further, adaptation costs can be hard to separate from other development needs when development and adaptation are self‑reinforcing. As such, investing in climate adaptation is not necessarily distinct from the investment needs identified in other strategic documents. The NDC estimated that until 2030, they amount to US$22 billion, half of which would need to be financed by the private sector. Overall, this represents about 17 percent of 2030 GDP, or assuming an equal distribution across the next decade, an annual average cost of about 2 percent of GDP. The investment required in the short term are significant compared with the country’s economy and fiscal capacities. For modeling purposes, the financing of the additional investments is assumed to come from both private and public sources. At least two avenues exist for financing climate action: increasing equity and increasing debt (see Chapter 5). They 138 IMF Staff Climate Note (2022/02). 61 Country Climate and Development Report: Côte d’Ivoire will require (i) using pricing instruments (through taxation and subsidization) to shift the allocation of capital toward climate‑related projects; (ii) greening the financial sector (e.g., taxonomy and disclosure); and (iii) developing market‑based instruments and de‑risking tools (e.g., insurance products) to share the burden of risk between the public and private sector. To further mobilize private savings, the government could prepare a list of bankable green infrastructure transactions and increase public financing by raising additional revenue, (e.g., through a carbon tax) achieving efficiency gains in spending through improved public investment, and financial management as the government’s borrowing capacity will be constrained in future. The contribution of these sources of financing will depend on what solutions can be found to mobilize them. 62 Country Climate and Development Report: Côte d’Ivoire 5. Financing at the Intersection of Climate and Development 5. Financing at the Intersection of Climate and Development Côte d'Ivoire’s climate transition hinges upon accelerating the funding and financing for climate-smart investment. The CCDR estimates that additional investment needs to curb future climate impact in the strictest sense would amount to at least 0.2 to 0.4 percent of GDP per year between 2023 and 2050.139 The necessary investment needs to be implemented early on, to lower the country’s vulnerability. Given intrinsic interlinkages between investment for development and climate resilience, the overall investment needs associated with climate resilient growth will be higher. First, the adoption of strict additionality to define climate change adaptation needs excludes the cost of closing the gap to achieve an optimal level of adaptation to current climate conditions. Second, adaptation costs can be hard to separate from other development needs when growth, structural transformation and adaptation are mutually‑reinforcing. As such, investing in climate adaptation is not necessarily distinct from the investment needs identified under the PND or the NDC. The NDC estimated that until 2030 the investment needs amounted to US$22 billion, half of which would need to be financed by the private sector, but overall representing about 17 percent of 2030 GDP, or assuming an annual average cost of about 2 percent of GDP over the next decade. Overall, private‑sector equity and debt will need to step up given public resource constraints. In the context of tightening financial conditions and heightened borrowing costs, a significant share of this cost – particularly in the short- and medium‑term – will need to be financed by the private sector. Climate funds are also limited: according to the Climate Funds Update database,140 Côte d'Ivoire had received only US$100.7 million from multilateral climate change funds as of January 2022. To reach the amount needed, it will be critical to identify synergies between fiscal policy and climate objectives (mitigation/adaptation), to tap into sovereign green debt instruments on the public side, and to scale green capital markets and private investments. These strategies align with recent global fora on increasing finance for sustainable and climate‑targeted development, such as the 2023 Paris Summit for the New Global Financial Pact.141 Furthermore, to reduce these costs, the government could adopt structural reforms to improve the efficiency of public spending and incentivize private‑sector investment in green and climate‑smart projects. This chapter explores how Côte d'Ivoire could achieve these goals in an equitable, efficient, and sufficient way. 5.1. Climate and Development Financing Needs are Intrinsically Related Climate finance refers to local, national, regional, or international financing drawn from public, private, and alternative sources to support mitigation and adaptation actions that seek to address climate change.142 The evaluation of climate finance needs involves comprehensive macroeconomic, sectoral, and climate assessments that provide a unique opportunity to inform countries on concrete climate finance options and help move forward on their climate and development agendas. For the purpose of the CCDR, we define financing needs according to a strict additionality definition, that is, the difference between 139 optimal investment levels with and without climatic shocks. 140 Overseas Development Institute and Heinrich Boll Stiftung Washington, D.C. 2023. Climate Funds Update [Website], © ODI and HBF, London and Washington, D.C. https://climatefundsupdate.org/about-climate-finance/. 141 https://nouveaupactefinancier.org/. World Bank, 2022. Türkiye Country Climate and Development Report. CCDR Series. © Washington, DC. 142 https://hdl.handle.net/10986/37521 License: CC BY 3.0 IGO. 64 Country Climate and Development Report: Côte d’Ivoire 5.2. Climate-Smart Equity — Creating Fiscal Space and Crowd in Private Investment 5.2.1. Government Revenue Mobilization with a Climate Focus: Carbon Taxation There is growing consensus that carbon taxation can effectively reduce global carbon emissions and replace less effective carbon regulations. Replacing burdensome regulations with a price signal will promote economic growth and give companies the regulatory certainty they need to invest in clean energy alternatives over the long term. A carbon tax will also promote more inclusive economic growth and make Côte d'Ivoire’s economy more efficient by eliminating distortions and reducing less efficient taxes. For example, fossil fuels benefit from significant and widespread “tax loopholes” in Côte d'Ivoire, causing consumer prices to remain well below the level consistent with the externalities associated with them. Implementing upstream carbon taxes on fossil fuels would ensure that prices accurately reflect the true costs of using those fuels, thus helping to mitigate climate change. At the same time, the smart use of the revenues generated would also benefit the economy in general and increase human welfare. Carbon taxes have other desirable advantages: they have low administrative costs, are easier to collect and monitor than direct taxes, offer little opportunities for evasion, and would cover the country’s large informal segment of the economy. If designed properly, a carbon tax would bring positive macro‑economic and distributional benefits to Côte d'Ivoire. A recent World Bank report analyzes the impacts of replacing current conventional taxes with a carbon tax in Côte d'Ivoire under four scenarios. In Scenario 1, revenues from the carbon tax provide a lump‑sum transfer to each Ivorian. In Scenario 2, the carbon tax is offset by a revenue‑neutral reduction in taxes levied on production in formal sector businesses. In Scenario 3, the carbon tax is used for a revenue‑neutral reduction in income taxes levied on formal sector labor, while Scenario 4 reduces the VAT tax rate with a revenue‑neutral carbon tax. Here is a summary of the results: » GDP rises in Scenario 3 (with reduced taxes on labor). So do household incomes, labor supply, and average wages in both the formal and informal sectors. Employment in the formal sector increases significantly as lower labor taxes reduce the cost of hiring workers, and the demand for labor rises (relative to capital). » Scenario 2 (with reduced production tax) also brings economic gains, but not as much as in Scenario 3 (labor tax reduction). It does not raise household incomes. » GDP and total employment also rise when carbon tax revenues are used to reduce the VAT (Scenario 4). The decrease in production costs for labor‑intensive informal firms leads to a significant increase in informal employment compared to the modest increase in formal employment. » The macroeconomic impacts are negative if carbon tax revenues are used to finance a lump‑sum cash transfer to all Ivorians (Scenario 1). Average household incomes increase, but GDP declines, as does total employment and formal employment. The presumed reason is that the transfer could reduce incentives to work. However, the CGE model does not consider the potential positive effects of cash transfers on human capital formation among the poor. » Total inequality (and poverty) would be significantly reduced in most scenarios since upper income people in Côte d'Ivoire would pay most of the carbon tax bill. 65 Country Climate and Development Report: Côte d’Ivoire A carbon tax also would help reduce the environmental damage of economic activity in Côte d'Ivoire. Recent World Bank studies143 suggest that a carbon tax would reduce the environmental footprint of activities like transport and agriculture and decrease air pollution. These studies recommend a feebate type of tax incentive whereby positive “abate” incentives are granted to production with low environmental impact, while negative “fees” are levied on production methods with high carbon intensity. Taxes can be designed to favor sustainable cocoa production that does not cause or result from deforestation. Current taxes on Ivorian cocoa consists of a Single Exit Duty (Droit Unique de Sortie/DUS) equal to 14.6 percent (raw cocoa and broken cocoa beans) applied to the CIF price (Cost, Insurance, and Freight) corresponding to the price calculated at the place of exit. The DUS is lower for oilcake and processed products. To encourage the development of “zero deforestation” sectors and territories, the DUS could be increased for non‑certified raw cocoa and lowered for certified cocoa. Modelling shows that an option is to carry out an increase of one percentage point per year with a cap of 20.6 percent in year 6, for non‑certified product, and a reduction of 2‌ –‌3 percentage points in the first year for certified product.144 Such fiscal incentives are far more cost‑effective in preserving natural forest ecosystems and should be considered complementary to large‑scale reforestation efforts, which are costly (about US$1,500/ha) and often have low tree survival rates. Moreover, in Côte d'Ivoire, large‑scale reforestation initiatives are hampered by the lack of clarity in land rights and the resulting potential for conflict. In the transport sector, motor vehicles are already highly taxed, limiting any possibility to further increase tax rates. But a green feebate mechanism could be added to import duties to stimulate demand for lower carbon vehicles. A revenue neutral feebate system, in which the lowest CO2 emitting gasoline vehicles would receive tax abatements of up to CFAF 1.38 million (US$2,485) while the highest CO2 emitting diesel vehicles pay penalties of up to CFAF 2.76 million (US$4,969), would reduce the average CO2 emissions rate by 6 percent. The proposed policy would also increase the number of imported vehicles as it would make small cars more affordable. Incentives such as for e‑mobility and bicycle‑public transport combinations could also be implemented. 5.2.2. Increasing Private‑Sector Investment Through Regulatory Changes Domestic and foreign direct investment must complement public funding to meet the climate challenge. Côte d'Ivoire has stood out among SSA countries for its relatively low private investment rate, averaging about 12 percent over the years pre‑COVID (2015‌ 18) –‌ compared to the SSA average of 16 percent. The government has recognized the need to accelerate the implementation of climate measures by firms, and to mobilize private financial resources to achieve the country’s climate commitments. Renewable energy is the only subsector with quantified targets in the NDC, so private‑sector investment is expected to be highest in this sector. Achieving the government’s 42  percent renewable energy target by 2030 will require private sector investment between US$7.8‌ 8 billion.145 Engaging –‌ the private sector will not only provide the necessary funding but also bring innovation, expertise, and efficiency to climate mitigation and adaptation efforts. 143 Background studies under Côte d'Ivoire PMR‑CPLC project - (P168001). Background study prepared under the Côte d'Ivoire PMR‑CPLC project - (P168001), Study 2: Propositions pour un mécanisme de 144 bonus‑malus fiscal pour la promotion du cacao durable en Côte d'Ivoire. United Nations Development Programme. 2020. Engaging the Private Sector in NDC Implementation — Assessmentof Private‑Sector 145 Investment Potential in the Energy Sector — Côted'Ivoire. New York. https://www.ndcs.undp.org/content/dam/LECB/docs/pubs-reports/undp-ndcsp-deloitte-privatesector-cote-dIvoire.pdf. 66 Country Climate and Development Report: Côte d’Ivoire Despite increased flows of FDI to the country, continued efforts to improve the investment climate and enable competition in key markets need to complement targeted measures motivating green or climate‑smart investment. In 2021, Côte d'Ivoire attracted US$1.38 billion in FDI, a substantial increase from the previous year’s low of US$713 million during the global health and economic crisis.146 To attract investment, the country has established the Centre for Investment Promotion (CEPICI) as a one‑stop shop to streamline administrative processes, created Special Economic Zones with incentives for businesses, enacted an Investment Code that ensures investor protection and incentives, prioritized infrastructure development to enhance the investment environment, promoted Public‑Private Partnerships for infrastructure projects, and introduced sector‑specific incentives in areas such as agriculture and renewable energy. However, despite these efforts, constraints to competition and entry continue to curb full private investment potential147 while measures have not significantly channeled finance toward green projects. Instead, foreign investment in 2021 primarily focused on extractive industries and finance. Developing robust private equity markets is crucial to effectively channel capital toward investment in climate and green projects. The current state of capital market development in Côte d'Ivoire remains relatively low, and firms have limited experience raising financing through public offerings. The latest financial sector assessment program for the WAEMU region highlights the persistent shallowness and inadequate liquidity of regional financial markets. Only 46 companies are listed, primarily concentrated in Côte d'Ivoire, and there is a prevalence of government securities on the Regional Security Exchange (Bourse Régionale des Valeurs Mobilières/BRVM). To mobilize significant capital specifically earmarked for climate and green projects, it is necessary to expand the pool of investors and encourage private equity investments. Key regulatory and legal reforms are needed to increase private equity and venture capital (PE/VC) for green technologies. A comprehensive framework should include clear guidelines for licensing conditions, supervision of fund functionaries, and a revised tax regime conforming to global standards. These regulations, combined with an investor‑friendly environment and streamlined processes, will attract capital, drive the growth of the PE/VC industry, and facilitate financing flows to green projects. Box 3. Priorities to increase the Ivorian private sector’s role in and contribution to climate action To understand where Ivorian firms stand on climate awareness, the IFC developed a survey to identify the needs and priorities for climate funding, skills, technologies, and an enabling environment for increased private climate action. Seventy firms were surveyed, including in financial services and insurance, agriculture and agribusiness, energy and mining and real estate and infrastructure. Results show that 80 percent of companies surveyed believe that climate change has already had an impact on their revenues, costs or investments, of which 81 percent believe that this impact will persist in the future. A small majority (56 percent) of companies surveyed claim to prioritize climate risks over other risks they face. The three main impacts identified United Nations Conference on Trade and Development. 2022. World Investment Report 2022: International Tax Reforms and 146 Sustainable Investment, United Nations, New York. https://unctad.org/system/files/official-document/wir2022_en.pdf. 147 World Bank. 2021. Côte d'Ivoire — CountryEconomic Memorandum: Sustaining Growth Acceleration. Country Economic Memorandum. Washington, DC. https://hdl.handle.net/10986/37233 License: CC BY 3.0 IGO. 67 Country Climate and Development Report: Côte d’Ivoire by companies are consistent with the analysis of the CCDR, highlighting that climate change is reportedly expected to impact firms’ business models through: (i) change in customer demand for products and services for 56 percent of companies surveyed; (ii) decline in labor productivity due to increased temperatures and extreme weather conditions for 53  percent of companies surveyed; and (iii)  increased cost of raw materials and other operating costs for 46 percent of companies. Paradoxically, this is not reflected at the level of commercial strategies as only 21 percent of companies surveyed see new growth opportunities related to climate change adaptation, only 11 percent plan to change their business strategy to take advantage of low‑carbon technologies and only 13  percent have already diversified their product/service offerings over the past 3 years to reduce their carbon footprint, particularly in agribusiness, energy and mining. The majority of companies surveyed do not have a formal climate change risk mitigation plan. Only 13 percent of them have a formalized mitigation plan, 20 percent have a plan in development while 39 percent do not have a plan and do not plan to develop one. In terms of financing, only 6 percent of the companies surveyed have carried out a needs assessment to facilitate the adoption of new climate‑smart technologies and/ or seize new market opportunities for low‑carbon products. 11 percent of companies surveyed have tried to do so without success. With regard to insurance, 3 percent of the companies surveyed have insurance products, half of which have taken out specific insurance against damage caused by extreme weather conditions. The survey also showed that 43 percent of companies surveyed are aware of the new carbon pricing and border adjustment mechanisms put in place by the EU and Côte d'Ivoire’s main trading partners, such as the EU zero deforestation regulation and 34 percent expect to be impacted by these regulatory changes. Interestingly, only a quarter of these are willing to meet the new requirements. That said, the firms surveyed have a rather positive perception of the efforts made by the Ivorian authorities, with 69 percent believing the government has put in place incentives to support the transition to a low‑carbon economy and 67 percent believing the government has created an enabling environment for the transition to a low‑carbon industrial sector. However, when asked about the concrete measures deployed, companies are not able to cite them. Finally, the survey shows that Ivorian companies need training and technical support to better appreciate and deal with climate change issues, and that the government needs to put in place stronger incentives to encourage companies to take climate change risks into account. Source: IFC green business survey. For more details see also Background note 18 — Private sector business survey (IFC). 68 Country Climate and Development Report: Côte d’Ivoire 5.3. Climate-Smart Debt: Expanding Corporate and Sovereign Financing Options and Reducing Risks 5.3.1. Expanding financing options for corporate and sovereign actors Green finance has emerged as a key tool for mobilizing capital toward green investment. Green finance encompasses financial instruments, products, and services that are designed to support sustainable investments, such as renewable energy, energy efficiency, and sustainable infrastructure. In West Africa, regional authorities like the Financial Markets Authority of the West African Monetary Union (Autorité des Marchés Financiers de l’Union Monétaire Ouest Africaine/AMF‑UMOA) and the regional central bank (Banque Centrale des États de l’Afrique de l’Ouest/BCEAO) are taking the lead in promoting green finance initiatives. For instance, the AMF‑UMOA has released a guide for the issuance of green, social, and sustainable bonds. BCEAO is a member of the NGFS, while several banks have applied to become members of the GCF. In Côte d'Ivoire, uptake of green finance instruments has been slow. Most climate funding comes from debt instruments or grants. In addition, authorities have not yet introduced formal labels for green lending products and banks’ financing flows for climate and environmental projects. Only a few commercial banks are funding climate projects at present, mainly in renewable and efficient energy, climate‑smart agriculture, and conservation projects. According to the UNDP, commercial banks in Côte d'Ivoire are reluctant to invest in renewable energy projects, viewing them as high‑risk ventures. This hesitation is compounded by the limitations posed by an asset‑liability mismatch on banks’ balance sheets, which restricts the availability of longer‑term financing options. Moreover, local commercial banks lack the necessary expertise in project financing to effectively support and navigate investments in this field.148 While Côte d'Ivoire is an attractive market for private equity, there is yet little information available on the role of green factors in driving investment decisions in the private equity or debt markets in the country. Other barriers include the unavailability of a specific resource mobilization strategy for climate change adaptation, the insufficient level of financial resources mobilized for mitigation, both internally and externally, and difficulties in accessing climate finance from external mechanisms. Lastly, there are misperceptions within international financial institutions about regional risk as well as a general unawareness of investors about the markets, and thus low confidence. Higher public‑sector financing is thus needed to create more green investment opportunities for private capital – a phenomenon known as “crowding in”. Public resources are often required to de‑risk projects, provide concessional credit, or backstop against certain shocks to enable private financing to flow. The government will need to explore a range of options to not only crowd‑in new sources of money, but also to leverage more concessional financing to incentivize private‑sector investment. The focus should be on maximizing concessional and semi‑concessional sources of financing, deploying such funds to de‑risking and blended structures that crowd‑in private sector funds, and exploring ways to raise additional public funds through instruments that may be financially efficient, such as sustainable or green bonds, or sustainability‑linked bonds. Other innovative financial tools and instruments that can help support Côte d'Ivoire’s climate actions have been explored (see Annex 6.6. Sample Menu of Climate Financing Options). 148 UNDP, August 2020. Engaging the Private Sector in NDC Implementation – Assessment of Private‑Sector Investment Potential in the Energy Sector, Côte d'Ivoire. Ministère de la Salubrité, de l'Environnement et du Développement Durable, 2018. Premier Rapport Biennal Actualisé de la Côte d'Ivoire. https://www.ndcs.undp.org/content/dam/LECB/docs/pubs-reports/undp-ndcsp-deloitte-privatesector-cote-dIvoire.pdf. 69 Country Climate and Development Report: Côte d’Ivoire 5.3.2. Concessional and Blended Financing In the short term, Côte d'Ivoire should maximize the full range of concessional and semi‑concessional financing available, including new sources of climate funds. For example, Côte d'Ivoire is a “Gap” country eligible for IDA concessional financing and IDA market‑based financing, both with significantly lower borrowing costs compared with the capital markets. Donors or bilateral or multilateral development banks are potential sources of concessional financing. These funds can be blended with semi or non‑concessional sources of financing to bring down all‑in costs for specific climate‑related projects. Despite their relatively small size, international climate funds are strategically important for Côte d'Ivoire. In addition to their direct benefits, they could also attract private investment by enabling national development banks and multilateral development banks to develop risk‑sharing instruments, foster learning, and develop technical capacities to deliver climate‑resilient investment. Some of the most relevant funds, such as the GCF, Climate Investment Funds (CIF), the Forest Carbon Partnership Facility (FCPF) and Global Environment Facility (GEF), have provided financing for initiatives in Côte d'Ivoire. GCF, for instance, is implementing zero‑deforestation agroforestry models in three southern regions of Côte d'Ivoire to decouple cocoa production from deforestation. FCPF is expected to make the first emission reduction payment in 2023 for a REDD+ project in the Taï National Park. Such initiatives can catalyze climate projects perceived as high‑risk, which then can be used to mobilize other financiers. Concessional finance and blended finance have the potential to grow with the presence of regional development banks, which can help to channel further concessional finance to Côte d'Ivoire’s banking sector to help expand green product offerings. The African Development Bank Group (AfDB), an implementing agency of GEF and the CIF, and accredited agency of GCF, returned to its headquarters in Abidjan in 2014. Attijariwafa Bank (AWB), a private sector entity with headquarters in Morocco, is an accredited agency of the GCF, with regional operations in Côte d'Ivoire149 and has a large project portfolio related to sustainable development. The West African Development Bank, the common development finance institution of the Member States of the WAEMU, works in Côte d'Ivoire with its headquarters in Togo. In addition, Côte d'Ivoire can explore deploying more innovative financial structures using these concessional and semi‑concessional resources. These sources of financing could be used as liquidity backstops for climate‑focused projects, such as by creating a price floor under a power purchase agreement for renewable energy projects. 5.3.3. Thematic Bonds Côte d'Ivoire has the potential to become a regional leader in sustainable finance, by using thematic bonds. To date, Benin (sovereign), the West African Development Bank, and Ecobank Transnational – a pan‑African retail banking group headquartered in Lomé, – have issued such bonds. While local capital markets are still relatively small, they can Togo ­ be an alternative mechanism for climate finance when banks are reluctant to lend money. Guidelines have already been developed for the issuance of green, socially responsible, and sustainable bonds in the WAEMU region by the AMF‑UMOA. International Finance Corporation (IFC), 2018. Attijariwafa Bank Parter to Increase Trade in Africa, Support Smaller Businesses (Press 149 release), Washington DC. https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=18313. 70 Country Climate and Development Report: Côte d’Ivoire In 2019, Côte d'Ivoire became one of the first countries to join the Coalition of Ministers of Finance for Climate Action and put in place a national platform on green finance by ministerial decree in 2020 to mobilize climate and sustainable investments. In 2021, the Government of Côte d'Ivoire went a step further and developed a framework for developing such bonds. It provides guidelines for assessing the environmental and social impact of projects and for managing the proceeds of the financing instruments transparently and accountably. The same year, an Ivorian property developer became the first issuer in the region to issue a green bond backed by the framework, for the shopping center in Abidjan.150, 151 Further, the Luxembourg Stock Exchange and the BRVM signed a Memorandum of Understanding (MoU) in September 2022 to explore the creation of a bond market dedicated to green, social, sustainability, and sustainability‑linked bonds. Depending on capital market conditions, the Government of Côte d'Ivoire can explore the potential for a use‑of‑proceeds thematic bond issuance or a sustainability‑linked bond. While the policy framework for other green finance instruments such as green loans remain underdeveloped, there may be potential for a relatively new form of sustainable bonds known as sustainability‑linked bonds. These bonds tie the financial performance of the bond to the achievement of pre‑established, agreed‑upon key performance indicators. This approach may be very interesting for Côte d'Ivoire as a potential follow‑on to a sovereign green bond as it can build on the framework already in place. The bond could be issued in the international or domestic market, building on the existing framework. It can bring in new investors, signal positive policy directions, generate funding for specific portfolios of eligible projects, and potentially yield slightly better financial terms. 5.3.4. Carbon Markets In its revised NDC (March 2022) to the Paris Agreement, Côte d'Ivoire expressed its willingness to engage in the market based and non‑market based collaborative approaches of Article 6 of the Paris Agreement, to allow for higher ambition in its mitigation and adaptation action and to attract climate finance to implement the mitigation commitments set out in its NDC.  Côte d'Ivoire is regarded as a promising country for the development of carbon market initiatives that could channel climate finance. It has gained experience through several projects eligible under the Clean Development Mechanism of the Kyoto Protocol as well as REDD+ activities financed with result‑based payments from the FCPF of the World Bank, notably from the Taï National Park. This project has been the subject of important reference texts on carbon transactions, and to ensure the traceability of carbon credits and securities, a national carbon registry will be set up. Côte d'Ivoire also is a member of the West African Alliance on Carbon Markets and Climate Finance. The country established a Task Force in October 2022 and has organized a dedicated workshop on institutional arrangement and regulation in July 2023 to rapidly operationalize Article 6. The proposed institutional framework includes (i) a high‑level monitoring body under the Prime Minister’s office in charge of cross‑ministerial coordination, (ii) a signatory entity for cooperative approaches in charge of review and signature of international agreements including related to Article 6.2152 and (iii) a national carbon market authority in charge of carbon 150 In August 2021, a shopping centre operator Emergence Plaza, owner of Cosmos Yopougon shopping center, sold a CFAF10 billion (US$18.1 million) 7.5 percent eight‑year private placement. This is only the first such issue in francophone West Africa and the fourth green corporate bond from SSA. International Finance Corporation (IFA), 2022. A Green Debut in Côte d'Ivoire (News article). Washington DC. 151 https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/a-green-debut-in-cote-d-ivoire. 152 Several propositions are in discussion for the institutional arrangements of the signatory entity: (i) Ministry of Economy and Finance (MEF) as a unique entity, (ii) MEF and MINEDD as joint signatory entity or (iii) MEF, MEDD and the sectoral ministry as signatory entities. 71 Country Climate and Development Report: Côte d’Ivoire market day‑to‑day management and implementation under the Ministry of Environment and Sustainable Development. 153 The climate change law under development is expected to create this proposed institutional framework and to provide legal security to foreign investors by clarifying the issue of ownership and transferability of title to the Internationally Transferred Mitigation Outcomes (ITMOs) or emissions reductions to be delivered for activities eligible in Côte d'Ivoire. The country will also have to establish MRV systems and inventories that inform and drive domestic climate actions and comply with the Enhanced Transparency Framework of the Paris Agreement.  eveloping a “Risk‑Layering Approach” and Implementing Sovereign Disaster 5.3.5. D Risk Financing Instruments The right mix of pre‑arranged sovereign financial instruments, including market‑based instruments, can help Côte d'Ivoire strengthen its financial resilience against disasters and strengthen its private sector. One effective strategy to consider is “risk layering”– using a combination of instruments to ensure cost‑effective financing for emergency response and long‑term recovery. In risk layering, events of different magnitude are covered by different types of instruments (Figure 36). For relatively small events, disaster reserve funds can provide quick liquidity, while medium‑sized events may require contingent credits or grants and post‑disaster credit to finance long‑term reconstruction. For more extreme but rare shocks, risk transfer instruments can typically provide additional protection to the government and the private sector (business, households, farmers, etc.) most cost‑effectively. In working toward a disaster risk financing strategy, Côte d'Ivoire should detail the most suitable sources of financing and instruments to finance the different types of shocks and identify gaps and opportunities for improving the current funding framework. Financial instruments for disaster response: a framework Figure 36.  Expected Loss (US$) Residual risk layer Intensive risk layer Risk Transfer Middle risk layer Contingency Fund Extensive risk layer Disaster Risk Reduction Measures Return Period (year) Source: UNDRR 2019. Note: Côte d'Ivoire Risk Profile. Côte d'Ivoire is purchasing sovereign drought insurance, with additional insurance products to be tested. To participate in the African Risk Capacity (ARC), countries need to sign a MoU with ARC and develop plans for potential future insurance pay‑outs. Côte d'Ivoire signed its MoU in 2016. The continued purchase of ex‑ante protection, as well as the increase in coverage purchased over the years, indicates that the Government sees value in having a risk transfer product to protect against droughts. The coverage and payout details are shown in Table 3. The proposed national carbon market authority includes a permanent carbon market office including a dedicated team and a technical 153 advice committee including key ministry specialists, university, private sector and NGOs representatives. 72 Country Climate and Development Report: Côte d’Ivoire Table 3. ARC drought insurance policy details in Côte d'Ivoire Policy year Premium (US$) Coverage (US$) Insured people Claims paid (US$) 2019/2020 1,000,312 8,000,000 800,000 738,540 2020/2021 1,387,502 12,305,679 1,075,682 2,185,100 2021/2022 1,577,489 13,441,139 1,344,114 300,413 In addition to sovereign drought insurance, an insurance pilot program, focusing first on rice production, is being developed,154 and ARC launched a new sovereign flood insurance product in April 2023. While the government has insurance against droughts, it would be more cost effective to fund more frequent and predictable disasters using a dedicated reserve fund. Consider the example of a US$200 million loss – roughly the size of a 1 in 50‑year flood loss. In a base strategy without a reserve fund, budget reallocations of US$100 million must be made after the disaster (Figure 37). In contrast, a risk layering strategy (Strategy B) would use a US$25 million reserve fund, along with a US$50 million contingent credit instrument. Only US$75 million of post‑budget reallocation would be required, a saving of 15 percent. Building reserve funds: base strategy or risk layering with a reserve fund Figure 37.  (illustrative example) The total amount of funding available 200 Funding Available (million US$) 150 100 Emergency ex-post budget reallocation Ex-post sovereign borrowing Reserve fund Line of contingent credit 50 0 Base Strategy Strategy B Source: World Bank. Note: Authors, 2023. Such a reserve fund could be complemented by specific financing that can be drawn down upon after a disaster. Pre‑arranged, catastrophe draw‑down instruments are possible options that can fund emergency and relief services after a disaster. Such pre‑arranged finance can ensure that money reaches those who need it the most when they need it the most. African Risk Capacity (ARC) Group, 2022. Climate insurance pilot project launched for Côte d'Ivoire rice farmers (Press release). South 154 Africa. https://reliefweb.int/report/cote-divoire/climate-insurance-pilot-project-launched-cote-divoire-rice-farmers. 73 Country Climate and Development Report: Côte d’Ivoire 6. Annexes 6. Annexes 6.1. Predicted Climate Changes155, 156 Located at the center of the coastal region of West Africa, Côte d'Ivoire is characterized by a tropical climate in the south and a savannah climate in the north with mean annual temperatures ranging from 25 to 27°C across the country. Annual precipitation sums range from 1,000 to 1,600 mm with higher amounts in the north and south and lower values in the center of the country. The evergreen forests in the south‑west of Côte d'Ivoire receive annual precipitation sums of up to 2,200 mm. In the north, Côte d'Ivoire has a single rainy season from March to October (unimodal precipitation regime), while the south is characterized by a bimodal precipitation regime with two rainy seasons from March to July and from October to November, respectively. An analysis of the climate based on a spatial zoning suggests three main patterns of climate predictions, the northern tropical savannah climate (zone 3), the southern urbanized coastal area (zone 6), as well as the sourth‑western tropical zone (zone 5). Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 By 2050, temperatures are expected to increase further by between 1 and 4°C and 1 and 3°C in the northern and southern areas of Côte d'Ivoire, respectively. The maximum temperature is projected with high certainty to rise substantially above 35°C, particularly in the north of the country. While there is less confidence around precipitation projections, a shift in the onset and cessation of the rainy season is nonetheless expected. The rainy season (March to October) is projected to start later in the 2050s compared with the present day in the northern areas, whereas high interannual variability will continue and the complex rainy season distribution could change in the south. Furthermore, an increase is expected in the number of days with heavy precipitation, from 7 days per year in 2000 to 8 Representative Concentration Pathway (RCP2.6) and 10 days per year (RCP6.0) in 2080. Doherty, A., Amies, J., Mayhew, L., Higazi, A., Osborne, R., Griffith, H. and Buonomo, E., (2022). Climate Risk Report for the West Africa 155 Region. Met Office, ODI, FCDO. Tomalka, J., Lange, S., Röhrig, F. and Gornott, C. (2020). Climate Risk Profile for Côte d'Ivoire. A joint publication by the Potsdam Institute for 156 Climate Impact Research (PIK), the German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the KfW Development Bank, 12 pp., Climate Risk Profiles for Sub‑Saharan Africa Series. 75 Country Climate and Development Report: Côte d’Ivoire From left to right: Projected change in average annual precipitation and Figure 38.  temperature in the North, South‑West, and South of Côte d'Ivoire from a selection of climate models Projected changes in Zone 3 Projected changes in Zone 5 Projected changes in Zone 6 400 400 400 Warmer and we er 300 300 300 Precipitation anomaly (mm/year) Precipitation anomaly (mm/year) Warmer and we er Precipitation anomaly (mm/year) 200 200 200 100 100 100 0 0 0 –100 –100 –100 –200 –200 –200 Warmer and drier –300 –300 –300 Warmer and drier Warmer and drier –400 –400 –400 –1 0 1 2 3 4 5 –1 0 1 2 3 4 5 –1 0 1 2 3 4 5 Temperature anomaly (°C) Temperature anomaly (°C) Temperature anomaly (°C) Source: Met Office, ODI, FCDO 2022. Note: Full reference: Doherty, A., Amies, J., Mayhew, L., Higazi, A., Osborne, R., Griffith, H. and Buonomo, E., (2022). Climate Risk Report for the West Africa region. MetOffice, ODI, FCDO. Higher temperatures translate into higher potential evapotranspiration. Annual mean top 1 m soil moisture projections for Côte d'Ivoire show a decrease of 3 percent under RCP2.6 and 1.7 percent under RCP6.0 by 2080 compared with the year 2000, with a large year‑to‑year variability and modeling uncertainty. Potential evapotranspiration is projected to increase by 4 percent in 2050 compared with year 2000 levels. Evapotranspiration and higher temperatures affect water quality and temperature, with knock‑on effects to the immune function of fish and their ecosystems. Sea levels and sea surface temperature will continue to rise with associated risk of flooding and erosion and increases in the frequency and intensity of marine heatwaves. Under RCP 6.0 and compared with year 2000 levels, a sea‑level rise of 30 cm in 2050 is expected. This threatens Côte d'Ivoire’s coastal communities and may cause saline intrusion in coastal waterways and groundwater reservoirs, rendering water unusable for domestic use and harming biodiversity. There are larger‑scale risks from climate change that are not easily captured by climate models, raising concerns for the future, namely tipping points such as disruption to the atmospheric mechanism of the West African Monsoon. Different projections suggest different possible futures, but the mechanics of the monsoon are complicated, making any projection highly uncertain. This uncertainty is compounded by uncertainty on the feedback from the vegetation in the area, directly related with current anthropogenic impacts on land use and forests. 6.2. Adaptation and Resilience Tool Methodology To understand the state of the existing institutional framework and capacity to manage adaptation and resilience in Côte d'Ivoire, an Adaptation and Resilience Diagnostic was conducted. The diagnostic analyzes the country’s current adaptation and resilience capacity and recommends actions to set up an economy‑wide framework that permits Côte d'Ivoire to meet its adaptation and resilience objectives. This diagnostic applies the Adaptation 76 Country Climate and Development Report: Côte d’Ivoire Principles157 to evaluate the adaptation and resilience of Côte d'Ivoire using six pillars. The pillars are centered around actors and responsibilities within governments, grouping actions under “foundations” for rapid and inclusive development, which offers protection against shocks, and five priority areas to build resilience and adapt to shocks (Figure 39). Under each priority area are several actions with indicators to monitor progress towards implementing these actions. According to specific criteria, the framework defines three maturity levels and classifies the indicator as: Nascent (red) when the country does not meet the standard or includes areas that are only starting to address the standard; or the country ranks in the bottom third of benchmarking peers Emerging (yellow) when the country partly meets the standard and has progressed beyond the initiation point but has not reached the final point; or the country ranks in the middle third of benchmarking peers Established (green) when the country fully meets the standard; or the country ranks in the top third of benchmarking peers Six pillars for designing effective adaptation & resilience strategies Figure 39.  APPLICATION >> Legal and institutional framework, and government coordination and implementation PRIORITY AREA 1 PRIORITY AREA 2 PRIORITY AREA 3 PRIORITY AREA 4 >> >> >> >> Facilitate the Adapt land use Help firms and Manage financial adaptation of plans and protect people manage and macro-fiscal firms and people critical public residual risks and issues assets, services natural disasters FOUNDATIONS >> Rapid, robust, and inclusive development Source: Hallegatte et al. 2020. Note: Full reference: Hallegatte, S; Rentschler, J; Rozenberg, J. 2020. Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience. © World Bank, Washington, DC. https://hdl.handle. net/10986/34780. The assessment provides an understanding of Côte d'Ivoire’s adaptation and resilience capabilities via an overall performance summary, an overview of aggregated results by pillar, as well as more granular information extracted from action areas developed within each pillar. About a third of the indicators used in the assessment are quantitative. Quantitative indicators are extracted from global databases. The rating of these indicators is assigned according to the performance of Côte d'Ivoire as benchmarked against a group of peer countries. To avoid biases entailed by benchmarking the country against too small a subset of peers, the income group “Lower‑Middle Income Countries”, to which Côte d'Ivoire belongs, was chosen as the reference group in this exercise. The benchmarking exercise was also conducted against other peer groups, including Sub‑Saharan African countries, countries of the West African Economic and Monetary Union (Benin, Burkina Faso, Guinea‑Bissau, Mali, Niger, Senegal, and Togo) and a select group of aspirational peers 157 Hallegatte, S., Rentschler, J. and Rozenberg, J. 2020. Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience. © World Bank, Washington DC. https://hdl.handle.net/10986/34780. 77 Country Climate and Development Report: Côte d’Ivoire (Morocco, Vietnam, Tunisia, Georgia and Colombia). This comparison exercise revealed that Côte d'Ivoire tends to perform strongly when compared against other countries of Sub‑Saharan Africa and the West African Economic and Monetary Union but lags behind other countries of the LMICs group and the grouping of aspirational peers (Figure 40). The remaining indicators are qualitative. Information to assess these indicators is extracted from relevant legislative and executive documents, including laws, strategies, plans, and other publicly available policy documents. When information could not be found, sectoral experts from the World Bank and from the government were consulted to finalize the assessment. Côte d'Ivoire’s performance in “Foundations” when compared with different Figure 40.  benchmarking groups Nascent Emerging Established SSA 5 8 9 WAEMU 6 3 13 LMIC 10 7 5 ASGP 13 5 4 Share of indicators % Summary charts by pillar and action areas Summary chart of the adaptation and resilience performance of Côte d'Ivoire Figure 41.  across all pillars Nascent Emerging Established A: Prioritization, implementation and progress monitoring 19 7 2 P4: Manage nancial and macro scal issues 8 6 1 P3: Help rms and people manage residual risks and natural disasters 11 12 1 P2: Adapt land use plans and protect critical public assets and services 27 22 7 P1: Facilitate the adaptation of people and rms 17 15 F: Foundations for rapid, robust and inclusive growth 10 7 5 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent). 78 Country Climate and Development Report: Côte d’Ivoire I. Foundations for rapid, robust, and inclusive growth Figure I.1.  Summary chart with indicator rating breakdown F: Foundations for rapid, robust and inclusive growth Nascent Emerging Established Inclusive economic growth 19 7 2 Increase economic productivity and growth, 11 12 1 while keeping bu ers for shocks 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent). II. Pillar 1: Facilitate the adaptation of people and firms Figure II.1.  Summary chart with indicator rating breakdown Nascent Emerging Established Facilitate structural change in the economic system 3 1 Private sector & rms 1 5 Ensure nancing is available to all, and provide support to the poorest and most vulnerable people 1 4 Facilitate access to technical solutions for resilience through R&D and trade policies 4 1 Clarify responsibilities and align incentives with resilience and adaptation objectives 4 Assess disaster and climate change risks, and make this information available 4 4 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent). 79 Country Climate and Development Report: Côte d’Ivoire III. Pillar 2: Adapt land‑use plans and protect critical public assets and services Figure III.1.  Summary chart with indicator rating breakdown Nascent Emerging Established Avoid depletion of natural capital and increase resilience of forest and other natural ecosystems 3 2 2 Coastal Zone Management 1 2 1 Enable a safe and continued learning environment that equips children with skills for resilience 3 3 1 Prepare the healthcare system for shocks from disasters and pandemics 3 4 Increase resilience of the water sector and ensure water security 3 3 Increase resilience of the agriculture sector and ensure food security 4 2 1 Make land use plans and urban development strategies risk-informed 4 3 1 Design and implement a government wide strategy to increase the resilience of infrastructure systems and public 3 3 assets Identify critical public assets and services 3 1 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent). Figure III.2.  Summary charts by action area: The following spider charts provide further detail to the bar charts. The scoring indicates the country’s preparedness to specific actions, and this ranges from 1 (very low preparedness) to 3 (well‑prepared). A. Infrastructure: Identify critical public assets and services (P2.1) and design and implement a governmentwide strategy to increase the resilience of infrastructure systems and public assets (P2.2) Critical assets and infrastructure identi ed 3 Construction standards Vulnerability of critical assets and codes for buildings and infrastructure assessed 2 Asset management system Logistics Performance Index 1 Budget allocation for climate Energy Architecture resilient infrastructure Performance Index Institutional structure Resilient infrastructure for resilient infrastructure investment needs Long-term resilient infrastructure plan 80 Country Climate and Development Report: Côte d’Ivoire B. Make land‑use plans and urban development strategies risk informed (P2.3) and Coastal Zone Management (P2.8) Institutional and regulatory framework for urban and land use planning Community participation 3 Climate risk identi cation and local knowledge in urban areas Coastal zone 2 Integrated approach management agency for urban planning 1 Integrated coastal zone management plan Quality of urban plans incorporating climate risks and resilence measures Information and assessment Number of quali ed of coastal change planners per capita Urban institutional Financing for implementation coordination arrangements of urban plans C. Avoid depletion of natural capital and increase resilience of forests and other natural ecosystems (P2.9) Forests and Climate Change Strategy 3 Restoration of damaged Use of Nature-based or degraded natural areas 2 solutions (NBS) for A&R 1 Ecosystem services index Natural Capital Accounting Biodiversity Habitat index Forest areas change D. Increase resilience of the agriculture sector and ensure food security (P2.4) Food security index 3 Global hunger index 2 Climate change adaptation strategy for the agriculture sector 1 0 Agriculture irrigated land Agriculture early warning system Public agricultural Agriculture insurance research expenditure 81 Country Climate and Development Report: Côte d’Ivoire E. Increase resilience of the water sector and ensure water security (P2.5) Water Resources Management (WRM) Strategy incorporating climate change considerations 3 2 Dedicated water resources Non-revenue water level management (WRM) agencies 1 Renewable internal freshwater National water information system resources per capita Freshwater productivity F. Prepare the healthcare system for shocks from disasters and pandemics (P2.6) Global Health Security Index 3 Quality of health care delivery 2 Health sector emergency response plan 1 Health facility accessibility Health risk communication Medical countermeasures stockpiles Surge demand health capacity G. Enable a safe and continued learning environment that equips children with skills for resilience (P2.7) Plans to enable a safe and continued learning environment in place 3 Temperature control Disaster proof schools in school buildings 2 1 Quality of education Resources to enable infrastructure remote learning Schools accessibility Learning-adjusted years of schooling 82 Country Climate and Development Report: Côte d’Ivoire IV. Pillar 3: Help firms and people manage residual risks and natural disasters Figure IV.1.  Summary chart with indicator rating breakdown Nascent Emerging Established Be prepared to build back better after disasters, with contingency plans and nancing 2 Help rms develop business continuity plans and nancial preparedness 2 2 Build a social protection system that is responsive to shocks 3 1 Develop the insurance sector, building on public-private partnerships 1 2 Provide all rms and households with risk management instruments 1 2 Save lives (and money) with hydromet, early warning and emergency management systems 2 5 1 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent) V. Pillar 4: Manage financial and macro‑fiscal issues Figure V.1.  Summary chart with indicator rating breakdown Nascent Emerging Established Communicate and mitigate the disaster and climate risk exposure of the nancial sector and pension systems 3 2 Anticipate and plan for long-term macroeconomic impacts 1 2 Develop a nancial strategy to manage contingent liabilities, combining multiple instruments 4 Include contingent liabilities from natural disasters and environmental shocks in the planning 2 1 and budgeting process 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent) VI. Applications: Prioritization, implementation, and progress monitoring Figure VI.1.  Summary chart with indicator rating breakdown Nascent Emerging Established Track progress over time, and review and revise the strategy 3 Allocate appropiate funding to the adaptation strategy 4 Screen all public policies and expenditures for climate and disaster risks and align them with adaptation targets 2 1 Set concrete sector-level targets to guide implementation by line minitries 2 3 1 Design an A&R strategy with prioritized actions 3 1 1 Create stron institutional and legal framework, with appropiate enforcement and stakeholder involvement 5 2 0 20 40 60 80 100 Share of indicators % Note: Number in each bar indicates the number of indicators per category (established/emerging/nascent) 83 Country Climate and Development Report: Côte d’Ivoire 6.3. Macro‑Structural Modeling for the CCDR Macro‑structural modeling was undertake using a country‑specific Climate Change Macro‑Fiscal Model (CC‑MFMod). The CC‑MFMod is the extended version of MFMod – the macro‑structural model already used to do core macro‑modeling at the World Bank. CC‑MFMod was used to model the linkages between damages caused by climate change, climate adaptation, and macroeconomic aggregates. A CC‑MFMod has been developed to: » Model the impact of climate change‑related shocks on the economy and macroeconomic aggregates (GDP, real sector, fiscal sector, external sector) in each of the two growth paths up to 2050. » Model selected adaptation measures in terms of reduced damages and increased investments. » Model the impact of higher investments involved in decarbonizing the energy sector. » Modeling to produce country‑specific estimates of economic damages from climate change as inputs into the CC‑MFMod. The impact channels used country‑specific climate scenarios and biophysical effects to estimate economic damages. A set of 10 impact channels was selected based on relevance to the countries and feasibility. The modeling involved four stages: (i) selecting climate scenarios; (ii) collecting additional data required for the analyses; (iii) selecting and adapting a set of biophysical models for each of the ten impact channels to the conditions of Côte d'Ivoire; and (iv) applying the climate scenarios to the biophysical models for each impact channel to produce the set of annual shocks for the projection period 2023 to 2050 as inputs into the CC‑MFMod to produce “Climate change with no adaptation” scenarios. The poverty and distributional impacts of climate change‑related shocks were assessed by using the CC‑MFMod outputs to do micro‑simulations using the latest living standards or household data. The modeling has been undertaken with uncertainties about future climate outcomes, technologies, policies, and development paths. It quantifies results using a large set of assumptions in order to help assess the challenges and trade‑offs. However, the answers are not definitive and specific numbers should be used cautiously. The key modeling caveats and limitations are summarized below. Caveats for economic loss or damage estimates 1. Missing channels and pathways: There are a large number of potential impact channels; however, for this report only ten channels have been modeled, so estimates of GDP impacts are not comprehensive. Some important channels are difficult to model, for example, the impact of climate change on nutrition and educational attainment, which have life‑long consequences for individuals’ health, learning, productivity, and earnings. 2. Magnifying effects: The macroeconomic modeling stops at 2050 and does not include potential magnifying factors in the region such as intensified conflicts over resources (for example, water), the possibility of ecosystem collapse, and the acceleration of 84 Country Climate and Development Report: Côte d’Ivoire climate‑induced outmigration. The risks of these magnifying factors being realized are considerable, especially past 2050 if global emissions do not drop rapidly. They would make total GDP and poverty impacts much larger than what is estimated in this report. 3. Not fully capturing the positive effect of inclusive development on reducing the impacts of climate change: The modeling only captures the positive effect from structural change with the agriculture sector becoming a smaller share of GDP in the higher‑growth scenarios. It does not account for how higher incomes, better access to infrastructure (such as power for fans, improved water and sanitation, and improved access to health care) and financial support (such as access to finance and insurance, and strong social protection) will enable adaptation responses by households and firms to reduce the impacts of climate shocks. 6.4. Details on Climate Change Scenarios To address climate uncertainty in the macroeconomic analysis, a total of ten climate scenarios were selected, two of which focus on emissions uncertainty, and eight of which capture uncertainty across climate models. The climate scenarios were provided by the World Bank’s Climate Change Knowledge Portal (CCKP) for 29 General Circulation Models (GCMs) from the Coupled Model Intercomparison Project 6 (CMIP6) suite of IPCC model outputs. On the CCKP, each GCM has up to five combinations of Shared Socioeconomic Pathway (SSP) and Representative Concentration Pathway (RCP) emissions scenario runs. For each GCM‑SSP combination, the CCKP provided a modeled history from 1995 to 2014 and projections from 2015 to 2100, for monthly mean temperature and precipitation and 1x1 degree grid resolution. Given that GCMs are biased relative to observed climate conditions, we applied the bias‑correction and spatial disaggregation (BCSD) technique to disaggregate the projections to 0.5 x 0.5 degree grid cells and then bias correct these projections using the observed historical dataset from 1995 to 2000 from the CRU TS4.0 dataset of the University of East Anglia (Harris et al. 2020). Then, we interpolate monthly data to a daily timestep using a daily historical hindcast from the Terrestrial Hydrology Research Group from Princeton University (Li, Sheffield, and Wood 2010). Climate variables across a range of SSP‑RCPs for Côte d'Ivoire Figure 42.  Projected Mean-Temperature (°C) Projected Precipitation (mm) Côte d'Ivoire; (Ref. Period: 1995–2014), Multi-Model Ensemble Côte d’Ivore; (Ref. Period: 1995–2014), Multi-Model Ensemble 2,500 34 2,250 32 2,000 1,750 30 1,500 1,250 28 1,000 750 26 500 2000 2020 2040 2060 2080 2100 24 Hist. Ref. Per., 1995–2014 SSP1-1.9 SSP1-2.6 2000 2020 2040 2060 2080 2100 SSP2-4.5 SSP3-7.0 SSP5-8.5 Hist. Ref. Per., 1995–2014 SSP1-1.9 SSP1-2.6 SSP2-4.5 SSP3-7.0 SSP5-8.5 Source: World Bank Climate Change Knowledge Portal. Note: From the Climate Change Knowledge Portal (CCKP) https://climateknowledgeportal.worldbank.org/. 85 Country Climate and Development Report: Côte d’Ivoire Figure 42 shows the projected mean temperature (at left) and precipitation (at right) in the country through 2100 from the CCKP. The bold lines are averages across GCM projections for each of four RCPs, and the shaded zones surrounding those lines are the full range of GCM projections within an RCP. As can be seen, projected precipitation varies widely across GCMs, but GCM ensemble averages (the bold lines) do not change significantly relative to baseline. For this reason, it is important to select a set of climate futures that capture a wide range of possible conditions. Following the World Bank guidance from February 3, 2022, titled Global scenarios for CCDR analyses, two scenarios were selected to allow for comparisons across emissions scenarios. These are referred as mitigation scenarios. » Ensemble average of SSP3‌ ‌ .0 GCMs: Pessimistic Case. Scenario in which warming –7 reaches 4°C by 2100, due to lax climate policies or a reduction in ecosystems and oceans’ ability to capture carbon. » Ensemble average of SSP1‌ 1.9 GCMs: Optimistic Case. Represents reductions in GHG –‌ emissions in line with limited 1.5°C of warming by 2100. A second purpose is to select scenarios that capture the broadest range of climate change effects across GCMs, to assess the vulnerability of the economy and the performance of adaptation options under possible wet vs dry and hot vs warm GCM outcomes. We select the following set of scenarios for each country, based on changes from the baseline climate through 2031 and 2050. » Hot/dry scenarios: Three scenarios around the 10th percentile of mean precipitation changes and the 90th percentile in mean temperature changes, across SSP2‌ 4.5 and –‌ SSP3‌ ‌ .0 GCMs, as well as a mean across those three scenarios. –7 » Wet/warm scenario: Three scenarios around the 90th percentile of mean precipitation changes and the 10th percentile in mean temperature changes, across SSP2‌ 4.5 and –‌ SSP3‌ ‌ .0 GCMs, as well as a mean across those three scenarios. –7 » The selected SSPs scenarios and GCMs are presented in Table 4. Table 4. Selected climate scenarios Type Scenario Mitigation SSP1‌–‌1.9 mean SSP3‌–‌7.0 mean Dry / hot future SSP3‌–‌7.0 KACE‑1‌‌–‌0‑G SSP2‌–‌4.5 CNRM‑ESM2‌‌–‌1 SSP2‌–‌4.5 GFDL‑ESM4 Dry/hot mean Wet / warm future SSP3‌–‌7.0 INM‑CM4‌‌–‌8 SSP2‌–‌4.5 MIROC‑ES2L SSP2‌–‌4.5 INM‑CM5‌‌–‌0 Wet/warm mean Sources: IEc 2023, CCKM. 86 Country Climate and Development Report: Côte d’Ivoire 6.5. Impact Channels and Selective Adaptation Channels The analysis considers impact channels that will inform shocks to the country’s macroeconomy. These shocks have been estimated by Industrial Economics (IEc). They can be grouped into three categories: (i) human capital, (ii) agriculture and natural resources, and (iii) infrastructure and services. Developing impact channels involves four stages: (i)  obtaining gridded historical and projected climate data for a set of climate scenarios (Annex 6.4); (ii) selecting, tailoring, and/or developing biophysical models that convert changes in climate data into biophysical shocks (e.g., changes in crop yields); (iii)  aggregating grid‑level biophysical shocks to national and/or sectoral scales using high‑resolution geospatial data; and (iv) producing shocks to be fed into the country’s macroeconomic model. Results are aggregated either to national scale inputs (e.g., capital or labor) or to economic sectors (e.g., agriculture) to match the model resolution. For this analysis, we consider 10 channels of impact. Table 5 provides a high‑level description of each channel broken down by category. Shocks from each channel are calculated based on changes in climate variables (e.g., monthly precipitation or daily max temperature) for the 30‑year period from 2021 to 2050, which is the period covered in the CCDR, relative to a climate baseline from 1995 to 2020. These shocks will then be inputted to the country macroeconomic model. In addition to shocks for the macroeconomic model, climate change shocks have been generated for estimating poverty impacts. The calculation of poverty shocks follows the same approach as the macroeconomic shock, i.e., the same models, inputs, and assumptions, but results are not aggregated to national scale, but instead, provided at higher resolutions to match available poverty microdata. When possible, poverty microdata will also be used to inform the inputs and assumptions of the general channel modeling. The following impact channels will consider poverty outputs: labor heat stress, human health, rainfed crops, and livestock. Impact channels rely on stylized biophysical models that are capable of incorporating climate information and projections, and simulate changes in biophysical (e.g., streamflow or infrastructure conditions) and/or socioeconomic (e.g., labor supply hours) variables. These variables are then translated into inputs to the macroeconomic model. As mentioned, the biophysical models will be customized to the country context. This is achieved by using country‑specific inputs, obtaining key assumptions from country experts and available literature, and calibrating outputs using local data. Alternative scenarios that consider policy decisions and investments (for the purpose of climate change adaptation or general development of the country) have also been included in the modeling by modifying these inputs and assumptions (Table 6). 87 Country Climate and Development Report: Côte d’Ivoire Table 5. The 10 impact channels CHANNEL OF IMPACT DESCRIPTION HUMAN CAPITAL 1 Labor heat stress Shock to labor productivity from daily heat stress to indoor and outdoor workers. Considers occupation‑specific work ability curves from the International Labour Organization (ILO). 2 Human health Shock to labor supply from changes in the incidence and mortality of vector‑borne (malaria and dengue), water‑borne (i.e., diarrheal), and temperature‑related diseases. 3 Water, sanitation, and Shock to labor supply from changes in diarrheal incidence and mortality due to hygiene investments in water supply and sanitation coverage. 4 Clean cooking Shock to labor supply from indoor air pollution, including the effect of changes in cooking services and co‑benefits in fuelwood use reduction. AGRICULTURE AND NATURAL RESOURCES 5 Rainfed crops Shock to crop revenues through changes in yields. Based on FAO crop‑specific yield response functions to rainfall availability and heat stress. 6 Erosion Shock to crops from topsoil erosion and flooding due to vegetation conditions. Impacts on erosivity from changes in rainfall based on the RUSLE model. 7 Livestock Shock to livestock revenues through changes in productivity by animal and product type. Considers extreme heat and feed availability effects through animal‑specific curves. INFRASTRUCTURE AND SERVICES 8 Inland flooding Shock to capital from changes in the recurrence of peak precipitation events that result in fluvial (riverine) flooding. Considers modeling of stream flows and floodplains, and damage estimate through depth‑damage curves. 9 Sea‑level rise and storm Shock to coastal capital from changes in mean sea level and storm surge, using a surge bathtub approach. 10 Tourism Shock to tourism sector revenues due to changes in climate variables, which produce changes in tourism potential. Sources: IEc Report 2023. 88 Country Climate and Development Report: Côte d’Ivoire Table 6. Modeling adaptation to climate change — the four channels selected Damage Adaptation measure Hypotheses Costs channel Heat stress Adaptation considering Increase coverage for indoor Capital cost of the new air increased air conditioning workers across all sectors by 25% to conditioning units required coverage for the indoor 30%. Adaptation ramps up linearly by the 2040‌ 2050 (CAPEX) + –‌ workforce. between 2021‌–‌2050, reaching the annual energy consumption target by 2050. costs (OPEX). CAPEX considers a low‑end and high‑end value. Low end corresponds to a standard window unit, high‑end to a split system. Crop Combination of (i) conservation Cover crops. The analysis is based Conservation tillage is assumed production tillage; and (ii) planting cover on the use of velvet beans as a to be cost‑neutral to farmers erosion crop in the off season. cover crop, which are recommended since labor and/or tractor use for use in this area. In addition to decline, while this intervention reducing erosion in the off season, may increase the need for velvet beans also provide feed for pesticides or other inputs. livestock and enrich the soil with nutrients, but this analysis does not include these benefits. The adoption rate is 20% by 2050. Rainfed crop Several scenarios are 1. Add new irrigated areas up to the 1. Capital costs of developing yields considered including the estimated irrigation potential in Côte new irrigated hectares by development of new irrigation d'Ivoire (+360,000 ha, representing 2041‌ 2050 (CAPEX) + annual –‌ infrastructure to address an increase from 1% to 3.5% operation and maintenance water stress for priority crops irrigation). costs (OPEX). CAPEX considers (maize, rice, yams, cassava, a low‑end and high‑end values, 2. Increase relative size of the and cocoa); crop switching, corresponding to simple and selected crops by 2 (i.e., a 100% i.e., increasing the production improved flooding irrigation increase). share of climate‑resilient crops respectively. in Côte d'Ivoire (cashew nuts 3. Substitute 25% of current 2. Not considered. and cotton); and increase production of the selected crops for share of heat‑tolerant crop a heat‑tolerant variety that increases 3. Not considered. Reference varieties to reduce heat stress resistance +2°C. R&D cost of developing a new on priority (maize, rice, yams, variety = US$ 60,000 (Porch et cassava, and cocoa). al. 2007). Coastal Adaptation assumes new This new elevation is above the There are two levels of Flooding infrastructure is built at a projected sea level change by 2050 adaptation: (i) medium: 100 higher elevation, relative to for SSP3‌ 7.0. This protects new –‌ buildings are protected by historical mean sea level. infrastructure from the additional 2050, with a total capital cost damage of storm surge caused of US$1.5 million; and (ii) high: by sea level rise. In Abidjan, 170 buildings are protected by this adaptation assumes new 2050, with a total capital cost of infrastructure is built outside the US$2.5 million. Costs are based historical 20‑year floodplain. This on Hecht and Kirshen (2018), adaptation starts in 2025. at US$50 per square meter. Annual maintenance costs are The rate of new infrastructure negligible. constructed is assumed to follow the population growth rate of Abidjan, as reported by the UN World Urbanization Prospects 2018. There are two types of adaptation included. New infrastructure built away from most hazardous areas + Protection of existing infrastructure. Source: World Bank. Note: Authors’ estimations and IEc. 89 Country Climate and Development Report: Côte d’Ivoire 6.6. Sample Menu of Climate Financing Options Most Climate Option Purpose Providers suitable Determinants Pros Cons focus for Grants Mitigation Raise National, Most Macroeconomic No fiscal Dependence on and/or resources with bilateral, countries, conditions burden to the donor support adaptation no expectation multilateral, but government and funds Match between of repayment, and especially availability country’s usually for international indicated priorities and non‑revenue organizations, for those in types of grants generating climate high debt available activities funds, private distress foundations, and non- governmental organizations Concessional Mitigation Raise National, Countries Macroeconomic Well-known Fiscal burden of and non- and/or resources bilateral, with conditions instrument repayment concessional adaptation that must multilateral, borrowing Pipeline of Flexibility in Dependence on loans be repaid and capacity projects and the use of the credit lines with interest international policies resources available to finance organizations, projects and climate Main source of policies funds, private international financial funding institutions Guarantees Mitigation Mitigate National, Countries Macroeconomic Crowd-in Represent and/or or manage bilateral, with limited conditions private contingent adaptation government- multilateral, ability in investments liabilities in the Government or project- and mobilizing government institutional High-risk related risks international private balance sheet strength sectors can be enabling organizations resources financed Some risks to attract due to might not be private sector higher risks covered by the investment perceived market by lenders and/or investors Disaster risk Adaptation Transfer National, Countries Macroeconomic Short-term Premiums management risks of low- bilateral, exposed conditions liquidity in face impose a fiscal instruments frequency and multilateral, to disaster of disasters, burden in the Access to capital high severity and risks and preventing short run markets climate- international with fiscal fiscal Some risks related organizations, space to Government insolvency might not be disasters climate support knowledge and covered by the from the funds, private premium capacity market government financial payments to the capital institutions markets 90 Country Climate and Development Report: Côte d’Ivoire Most Climate Option Purpose Providers suitable Determinants Pros Cons focus for Thematic Mitigation Raise Capital market Countries Macroeconomic Climate Dependent bonds and/or resources investors with conditions commitment on market adaptation that must borrowing signaling conditions and Access to capital be repaid capacity appetite markets Diversification with interest and market of the investor Costs of to finance access Government base governance projects with institutional arrangements measurable strength Climate data for issuance and and reportable disclosure reporting impacts improvements Reduced flexibility in the use of the resources for use-of-proceed bonds with earmarked expenditures Debt for Mitigation Raise Bilateral, Countries Macroeconomic No fiscal Contingent upon climate swaps and/or resources multilateral, with eligible conditions burden to the the availability of adaptation from external and external government eligible external External debt debt service international debt, debt profile relief in organizations, usually Dependent return for non- in debt Government on creditors’ local climate- governmental distress institutional or swap related organizations, strength counterparties’ spending private willingness commitments investors Reduced flexibility in the use of the resources with earmarked expenditures Carbon taxes Mitigation Raise Firms Countries Country’s Additional Difficult political resources in which emissions profile revenue economy in and mobilize emission provides approving such Economic private sector reductions funding for measure characteristics investments in are a major other climate- of key emitting Challenges in less-intensive priority related sectors establishing emission projects the appropriate alternatives Availability Change tax rate and by levying of technical incentives analyzing costs a tax on mitigation toward a more and benefits emissions or options sustainable on the carbon Potential Interactions production content of investment with the climate, process fossil fuels discouragement energy, and Targeted to due to higher tax fiscal policy mix the highest No guarantee emitters on the amount of emission reduction 91 Country Climate and Development Report: Côte d’Ivoire Most Climate Option Purpose Providers suitable Determinants Pros Cons focus for Emissions Mitigation Raise Firms Countries Country’s Additional Complexity of Trading resources in which emissions profile revenue the instrument Scheme (ETS) and mobilize emission provides requires high Economic private sector reductions funding for government characteristics investments in are a major other climate- capability of key emitting less-intensive priority related sectors emission projects alternatives by Availability Change establishing of technical incentives a cap on mitigation toward a more emissions options sustainable and issuing Interactions production tradeable with the climate, process allowances energy, and Prediction of fiscal policy mix the emission Government reduction institutional outcome strength Freedom for agents to choose the most cost- effective way of reducing emissions Carbon Mitigation Raise Firms Countries Country’s Additional Complexity of Offsetting resources in which emissions profile revenue the instrument and mobilize emission provides requires high Interactions private sector reductions funding for government with the climate, investments in are a major other climate- capability energy, and less-intensive priority related fiscal policy mix Challenges in emission projects establishing alternatives Government Freedom for the accounting by issuing institutional agents to protocol due credits from strength choose the to lack of emissions most cost- international reductions effective way standards for derived of reducing carbon offset from certain emissions projects or Difficulties activities in measuring emission reduction and the offset quality Fossil fuel tax Mitigation Raise Whole society Countries Country’s Additional Difficult political and subsidies and/or resources dependent energy matrix revenue economy in reforms adaptation and mobilize on fossil and economic provides approving private sector fuel characteristics funding for reforms investments in subsidies of the energy other climate- Potential less-intensive sector related negative effects emission projects on household alternatives income 92 Country Climate and Development Report: Côte d’Ivoire Most Climate Option Purpose Providers suitable Determinants Pros Cons focus for Public-private Mitigation Mobilize Private Countries Macroeconomic Additional Complexity of partnerships and/or private sector investors with conditions source of the instrument adaptation investments in revenue- funding and requires Pipeline of less-intensive generating financing government projects emission projects capacity Transfer of alternatives capable Government private sector Hidden fiscal to attract institutional innovation, risks might private strength incentives, and impose a burden investors experience to in the future public projects Regulatory Mitigation Mobilize Private All Macroeconomic Additional Political and policy and/or private sector investors countries conditions sources of economy developments adaptation investments in funding and challenges might Government less-intensive financing hinder reforms climate emission commitment alternatives Government institutional strength 6.7. List of Background Notes that Accompany this CCDR Below is the list of notes that provide additional background material. These will be published online, as a separate stand‑alone document, to accompany the CCDR: 1. Governance & institutional set‑up 2. Social protection in the wake of climate change 3. Gender and climate considerations 4. Oil and gas sector 5. Energy sector 6. Clean cooking and climate change 7. Climate change impact on agriculture and environment 8. Climate change impacts on cocoa 9. Water sector 10. Changing wealth of Nations (CWON) – The Case of Côte d'Ivoire 11. Mining impacts In Côte d'Ivoire 12. Climate change impact on the urban and disaster risk management sectors 13. Transport and climate change impacts 14. Mobility and resilience 15. Digital note for Côte d'Ivoire 16. Climate finance inventory 17. Financial sector assessment 18. Private‑sector business survey (IFC) 93 Country Climate and Development Report: Côte d’Ivoire