EASTERN AND SOUTHERN AFRICA UNION OF THE COMOROS World Bank Group COUNTRY CLIMATE AND DEVELOPMENT REPORT COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS i © 2025 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 International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), collectively known as The World Bank Group, with external contributors. 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. 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All queries on rights and licenses should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org. EASTERN AND SOUTHERN AFRICA UNION OF THE COMOROS World Bank Group COUNTRY CLIMATE AND DEVELOPMENT REPORT COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS iii TABLE OF CONTENTS ACKNOWLEDGMENTS vii ACRONYMS ix EXECUTIVE SUMMARY 1 1. CLIMATE CHANGE AND DEVELOPMENT CHALLENGES AND PRIORITIES 10 1.1. Context and Development Challenges 10 1 1.2. Key Risks and Impacts from Climate Change  13 1.3. Climate Impacts on the Development Agenda 16 1.4. Main Levers for Climate-Resilient and Green Development  19 2. COUNTRY CLIMATE COMMITMENTS, POLICIES, INSTITUTIONS, AND CAPACITIES 21 2 2.1. Climate Change Legal and Regulatory Commitments 21 2.2. Institutional Framework for Climate Action 22 2.3. Implementation Gaps and Challenges 23 2.4. Ways to Enhance Resilience of the Institutional Framework 25 3. SECTORAL IMPLICATIONS AND OPPORTUNITIES OF CLIMATE CHANGE  29 3.1. Improving the Productivity and Resilience of Agriculture and Fisheries 30 3 3.2. Investing in a Climate-Resilient Infrastructure Network  39 3.3. Safeguarding Water Supply in the Face of Growing Demand and a Changing Climate  46 3.4. Increasing Renewable Energy Generation Capacity 54 4. MACRO-FISCAL CONSIDERATIONS FOR CLIMATE CHANGE: STEERING THE ECONOMY TOWARDS RESILIENT GROWTH 59 4 4.1. Macro-Fiscal Modeling and Development Scenarios  59 4.2. Assessing the Impacts of Climate Change and Climate Adaptation on the Economy  60 4.3. Macro-Fiscal Considerations in Managing Climate Change Impact 63 5. FINANCING CLIMATE TRANSITION IN COMOROS 66 5 5.1. Key Sources of Climate Finance for Comoros 66 5.2. Managing Climate-Related Financial Risks  68 5.3. Insurance, Risk Management Products, and Diaspora 69 5.4. Leveraging Carbon Markets and Climate Finance Opportunities  70 5.5. Policy Recommendations for Financing the Comoros’ Climate Transition 71 6. THE WAY FORWARD: PRIORITIZED POLICY PACKAGES AND FINANCING ACTION 74 REFERENCES  79 iv COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS LIST OF FIGURES § Figure E1. Annual Average GDP Changes from BAU and Reform Development Scenario Baselines with no adaptation measures 3 § Figure E2. Annual Average GDP Changes from BAU and Reform Development Scenario Baselines 3 § Figure 1. Selected Macroeconomic Imbalance Indicators (left) and Actual and Projected Poverty Rates and Real GDP per Capita (right) in the Comoros 11 § Figure 2. Protests and Riots in Comoros (2020-2023) 13 § Figure 3. Observed and Projected Mean Air Temperature Scenarios in the Comoros (1990-2100) 14 § Figure 4. Historical Sea Level for Coastal Comoros (1993-2015) Based on Satellite Data, with Observed Anomalies (mm) Relative to the Mean (1993–2012) 14 § Figure 5. Overview of Frequent Natural Hazards and the Number of People Affected (1980-2020) 15 § Figure 6. Number of Villages Affected by Cyclone Kenneth and Incidence of Poverty 16 § Figure 7. Average Crop Areas, Production, and Revenue, 2017–2021 30 § Figure 8. Major Fish Catch Species, 1950–2010 30 § Figure 9. Average Annual Change in Rainfed Crop Yields Relative to the Historic Baseline (1995– 2020) due to Changes in Water Availability and Increasing Temperatures from Climate Change 32 § Figure 10. Impacts from Changes in Water Availability and Increasing Temperature on Rainfed Crop Yields by Island for 2041–2050 33 § Figure 11. Shock to Fisheries Output from Climate Change 36 § Figure 12. Change in Maximum Capture Potential in the Comoros’ Exclusive Economic Zone 36 § Figure 13. Labor Productivity Impact by Island, 2041–2050 39 § Figure 14. Average Annual Road Costs under a Without Adaptation Baseline and an Adaptation Scenario, 2041–2050 41 § Figure 15. Average Annual Road Delay Hours under No-Adaptation Baseline and Adaptation Scenarios, 2041–2050 41 § Figure 16. Historical 100-year Floodplain 42 § Figure 17. Shocks to National Capital due to Sea Level Rise and Coastal Flooding under a Pessimistic Climate Future (SSP3–7.0, 80th Percentile) 44 § Figure 18. Projected Change in Mean Sea Level Under Different Climate Scenarios 45 § Figure 19. Drought Risk Profile by Island, Based on Satellite Data 47 § Figure 20. Water Demand Projections by Sector on Ngazidja 49 § Figure 21. Water Demand Projections by Sector on Mwali 49 § Figure 22. Water Demand Projections by Sector on Ndzuwani 49 § Figure 23. Storage-Effective Yield Curve for all Basins on Ngazidja  50 § Figure 24. Storage-Effective Yield Curve for all Basins on Mwali 50 § Figure 25. Storage-Effective Yield Curve for all Basins on Ndzuwani 50 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS v § Figure 26. Sensitivity Analysis for all Basins on Ngazidja at 20 Percent of Runoff Harvestable 51 § Figure 27. Sensitivity Analysis for all Basins on Ngazidja at 10 Percent of Runoff Harvestable 51 § Figure 28. Sensitivity Analysis for all Basins on Mwali at 60 Percent of Runoff Harvestable 51 § Figure 29. Sensitivity Analysis for all Basins on Ndzuwani at 50 Percent of Runoff Harvestable 51 § Figure 30. Labor Supply Shock from Temperature Increases due to Climate Change on Water-Borne Diseases (left) and from Increased Water, Sanitation, and Hygiene Investments (right) 53 § Figure 31. Optimal Deployment of Energy Produced under the Least Cost Development Plan  56 § Figure 32. Current Climate Change Policies: Annual Average Changes from BAU and REC Scenario Baselines 61 § Figure 33. Current Climate Change Policies: Poverty Rate Changes from BAU and REC Scenario Baselines 61 § Figure 34. Current Climate Change Policies: Cumulative Economic Losses due to Climate Change by Impact Channel 61 § Figure 35. Enhanced Adaptation Capacity and Policies to Climate Change: Annual Average Changes from BAU and REC Scenario Baselines 62 § Figure 36. Enhanced Adaptation Capacity and Policies to Climate Change: Poverty Rate Changes from BAU and REC Scenario Baselines 62 § Figure 37. Enhanced Adaptation Capacity and Policies: Cumulative Economic Losses due to Climate Change by Impact Channel  63 § Figure 38. Enhanced Adaptation Capacity and Policies: Change in Public Debt from BAU and REC Scenario Baselines (Percentage of GDP) 63 LIST OF TABLES § Table ES1. Comoros CCDR Key Recommendation 7 § Table 1. Selected Climate Scenarios and Expected Change in Precipitation and Temperature by 2041-2050 Relative to the Historic Baseline (1995-2020) 29 § Table 2. Estimated Volumes of Renewable Water Resources and their Exploitation Rates by Island  46 § Table 3. Changes in Mean Runoff by Island as a Result of Climate Change  48 § Table 4. Opportunities for Private Sector Involvement  67 § Table 5. Action Plan of Priority Actions for Resilient, Low-Carbon Development in the Comoros 74 vi COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS ACKNOWLEDGMENTS The Comoros Country Climate and Development Report (CCDR) captures the interplay between development, climate change, and climate policies. This report was developed by individuals across the World Bank Group (WBG), in coordination with the Government of Comoros (GoC), to promote sustainable and resilient development in the face of climate change. The preparation of the report was led by Berina Uwimbabazi (Program Leader, Lead Water Resources Management Specialist), Steve Loris Gui-Diby (Senior Economist), and Atsushi Iimi (Senior Transportation Specialist). Key contributions were made by Min Ji Sohn (Environmental Specialist), Ana Elisa Bucher (Senior Environmental Specialist), Almedina Music (Senior Economist), Andry Herizaka Rakotoarisoa (Infrastructure Specialist), Atishay Abbhi (Senior Disaster Risk Management Specialist), Ben Ahmed Abdou Aboubacar (Urban Specialist, Consultant), Benjamin Billard (Senior Agriculture Economist), Cecilia Paradi-Guilford (Senior Digital Development Specialist), Chung Gu Chee (Senior Economist), Clement Gevaudan (Digital Development Specialist), Deea Ariana (Energy Specialist), Eliane Razafimandimby Ramiandrison (Senior Health Specialist), Ezgi Canpolat (Social Development Specialist), Fanjaniaina Prisca Mamitiana (Private Sector Development Specialist), Francis Muamba Mulangu (Senior Economist, Statistician), Gael Fetraniaina Raserijaona (Senior Urban Specialist), Heather Jane Ruberl (Economist), Hiska Noemi Reyes (Senior Social Development Specialist), Iangotiana Andy Ramamonjisoa (Public Sector Analyst, Junior Professional Associate), Ibrahim El ghandour (Public Sector Specialist), Joanna P. De Berry (Senior Social Development Specialist), Julia Rachel Ravelosoa (Senior Social Protection Economist), Justin Marie Bienvenu Beleoken Sanguen (Senior Energy Specialist), Kabinet Kaba (Economist), Komenan Koffi (Senior Energy Specialist), Lewnida Sara (Senior Water Supply and Sanitation Specialist), Lira Hariravaka Rajenarison (Senior Public Sector Specialist), Lorenzo Bertolini (Senior Economist), Luisa Texeira De Melo De C Felino (Risk Management Officer, MIGA), Mamadou Tanou Balde (Economist), Mampionona Amboarasoa (Senior Agriculture Economist), Marcos Vaena (Senior Strategy Officer, IFC), Mark Dimmer (Senior Investment Officer, IFC), Mohamed Abdel Jelil (Senior Social Protection Economist), Neelam Nizar Verjee (Senior Operations Officer), Noro Aina Andriamihaja (Senior Financial Sector Specialist), Patrick John McCartney (Senior Economist), Sachiko Kondo (Senior Natural Resources Management Specialist), Sinafikeh Asrat Gemessa (Economist, Consultant), Tsiry Andriantahina (Senior Energy Specialist), and Weiyi Wang (Operations Officer, IFC). Andrianina Noro Rafamatanantsoa (Senior Program Assistant), Matoiri Boina Ramlat (Team Assistant), and Sitti Fatouma Ahmed (Senior Program Assistant) provided support. The team would also like to thank the Government of Comoros for technical feedback, particularly Ministry of Finance, Budget and Planning, Ministry of Foreign Affairs, Ministry of Interior, Ministry of Transport, Post & Telecommunication, Ministry of Health, Ministry of Agriculture, Fisheries & Environment, and Ministry of Energy. Idah Pswarayi-Riddihough (Country Director, Comoros), Claudia Conceicao (Regional Director, IFC), Iain Shuker (Regional Director), Africa Olojoba (Practice Manager), Abdelaziz Lagnaoui (Practice Manager), Marco Hernandez (Practice Manager), Boubacar Sidiki Walbani (Senior Operations Officer), Boubacar-Sid Barry (Resident Representative, COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS vii Comoros), Mehita Fanny (Country Manager, IFC), Ram Akers (Resident Representative, IFC), Hiroyuki Hatashima (Chief Evaluation Officer, MIGA), Kate Wallace (Sector Manager, MIGA), Ian Forde (Program Leader), Aida Assiata Amada Adamou (Operations Officer) provided overall guidance. The team wishes to thank peer reviewers; Benedicte Baduel (Senior Country Economist), Christian Borja-Vega (Senior Economist), Dominic Ben Khothatso Milazi (Senior Energy Specialist), Diji Chandrasekharan Behr (Lead Environmental Economist), Gabriel Roberto Zaourak (Senior Economist), John Bryant Collier (Program Leader), Martin Heger (Senior Environmental Economist), Dominick Revell de Waal (Senior Economist, SAEW3), Drita Dade (Senior Environmental Specialist, SAWE4), Giovanni Ruta (Lead Environmental Specialist, SEAE1), Climate Change Group CCDR Core Team, Digital Transformation VPU, Prosperity VPU, LEGEN, People VPU, and Infrastructure VPU. Industrial Economics Inc. conducted background technical research and climate impact modeling analysis that was invaluable for this CCDR’s analysis. Partial funding for the report was provided by PROBLUE Trust Fund. viii COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS ACRONYMS °C Degrees Celsius CO2 Carbon dioxide BAU Business-as-usual or no-reform development scenario (contrast to REC) CC-MFMod Comoros Climate Change Macro-Fiscal Model FLE Framework Law of the Environment gCO2eq Grams of carbon dioxide equivalent GDP Gross Domestic Product GWh Gigawatt-hour ha Hectares km Kilometer km2 Square kilometer kV Kilovolt kW Kilowatt kWh Kilowatt-hour mm Millimeters MCM Million cubic meters MW Megawatt MWh Megawatt-hour NDC Nationally Determined Contribution RCP Representative Concentration Pathway REC Reform development scenario (contrast to BAU) REPAIR Regional Emergency Preparedness and Access to Inclusive Recovery SONELEC La Société Nationale d’Electricité/the National Electricity Company of the Comoros SSP Shared Socioeconomic Pathway COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS ix x COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS © Clement Gevaudan EXECUTIVE SUMMARY Introduction The Union of the Comoros (“The Comoros”) has significant vulnerability to climate change related risks but has considerable opportunities to strengthen preparedness and resilience against these challenges. According to the Notre Dame Global Adaptation Index, the Comoros is the 29th-most vulnerable country to climate change and the 163rd most ready to adapt (out of 191). The Comoros archipelago is exposed to many natural hazards that adversely affect the country’s natural capital, people, and physical infrastructure. In 2014, the economic cost of climate-related disasters was estimated at $5.7 million annually, equivalent to 9.2 percent of Gross Domestic Product (GDP). Between 2018 and 2023, as many as 11 tropical depressions or cyclones impacted the country, with Cyclone Kenneth causing the greatest damage, equivalent to 14 percent of GDP, resulting in total economic growth falling from 3.6 percent in 2018 to 1.9 percent in 2019. More than 345,000 people (40 percent of the population) were affected by the cyclone, with 185,000 people experiencing severe impacts and 12,000 displaced. However, there is an opportunity for the country to grow more robust and shock-responsive, and to establish prepositioned funding mechanisms to enhance future crisis response efforts. For the Comoros, adaptation and climate-resilient development are the key climate change focus areas, with the country projected to face $836 million by 2050 in additional costs due to climate-related impacts. Current plans to adapt to the impacts of climate change in the Comoros include efforts to improve water management, strengthen coastal protection, and develop climate-smart agriculture practices. Given the country’s reliance on its natural resource base for economic growth and mobility, protection of these resources from climate change will be essential for promoting resilient growth and development. In addition to growing the adaptive capacity of the country’s natural resource sectors, strategic economic diversification will be important to help minimize future climate impacts and development activities will need to be undertaken in such a way as to attract low carbon co-benefits. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 1 The Union of the Comoros is committed to addressing climate change through its Nationally Determined Contribution (NDC) and national priorities. The country’s NDC (which was revised in 2021 for a ten-year horizon) sets ambitious targets, with a goal of reducing greenhouse gas emissions by 23 percent by 2030. The country also plans to significantly increase the share of renewable energy in its energy portfolio, reaching 33 MW by 2030. This will not only promote low-carbon development but also reduce the country’s dependency on imported oil and coal, which currently make up 95 percent of the energy mix. Additionally, the Comoros has declared its intention to increase CO2 removals by 47% by 2030, compared to BAU. The Plan Comores Emergent 2030, the long-term national strategic action plan adopted in 2019, outlines interventions and large-scale projects aimed at driving economic transformation and sustainability. The development agenda presented under this Plan focuses on i) fisheries and costal management to elevate Comoros to a tourism destination in the Indian Ocean and promote blue economy projects; (ii) renewable energy and energy supply to support Comoros’ energy circle; (iii) transportation to unite the islands by sea; (iv) digital development for Moroni to become a financial smart city and digital administrative district; and (v) agriculture to promote agri-business, including value chain development. Fiscal constraints pose a challenge to the Comoros’ efforts to achieve environmental sustainability, drive economic growth, and improve living standards. With an estimated poverty rate of 39 percent in 2022, addressing these issues remains a critical priority. Additionally, the country faces a high risk of debt distress, with debt reaching 32.7 percent of GDP in 2022, nearly double the value recorded in 2017. State-owned enterprises have also generally underperformed, restricting fiscal flexibility to respond to natural disasters. Revitalizing the Comoros’ growth model requires shifting focus from consumption, reducing state involvement in the economy, and implementing policies to accelerate productivity growth. With this development context in mind, this report analyzes the impact of climate change risks on the economy-wide. The macroeconomic and fiscal modeling conducted through this CCDR, focused on analyzing the impact of climate change and adaptation policies on economic and poverty outcomes, comparing a business-as-usual (BAU) development scenario with no climate related reforms, to a reform development scenario (REC) that includes the integration of adaptation measures1. The modeling results show that adaptation measures can help to substantially reduce the impacts of climate change on the Comorian economy. For example, under a BAU scenario, climate change impacts are estimated to result in an estimated reduction of GDP between 5.1 (under an optimistic Wet/Warm scenario) and 6.6 (under a pessimistic Dry/ Hot scenario) by 2050. Under a reform development scenario (REC) with no adaptation, climate change impacts are estimated to result in a reduced loss between 4.4 (under an optimistic Wet/Warm scenario) and 5.8 (under a pessimistic Dry/ Hot scenario) (Figure E1). Poverty rates would increase by up to 5.4 percentage points under the Dry/Hot climate scenario without adaptation and reform measures. 1 The impacts of climate change were estimated through eight different so-called channels of impact, namely heat stress impacts on labor productivity; water, sanitation, and hygiene impacts on labor supply; rainfed crop production; soil erosion impacts on crop production; impacts to roads and bridges; damages from inland flooding; damages from sea-level rise and coastal flooding; and impacts to fisheries. 2 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure E1 Figure E1. Annual Average GDP Changes from BAU and Reform Development Scenario Baselines with no adaptation measures Business as Usual Reform Scenario with no Adaptation 0.0 0.0 -1.0 -1.0 -1.1 -1.1 -1.0 -1.0 -2.0 -1.7 -2.0 -1.6 -1.6 -1.7 -3.0 -3.0 -2.7 -2.7 -3.1 -3.2 -4.0 -4.0 -3.7 -3.6 -4.1 -4.3 -4.4 -4.3 -5.0 -4.8 -5.0 -5.1 -6.0 -6.0 -5.7 -5.8 -6.3 -7.0 -6.6 -7.0 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S Dry and hot Wet and warm Dry and hot Wet and warm Real GDP Household Consumption per Capita Real GDP Household Consumption per Capita With the integration of adaptation options in a development reform scenario (REC-adaptation) by 2050, GPD losses would be reduced by around 2.1 percent (Figure E2 right pane) when adaptation measures are implemented under a Dry/Hot or pessimistic climate scenario or 0.8 percent under an optimistic Wet/Warm climate scenario. Therefore, the implementation of climate smart policy reforms and adaptation measures can help limit GDP loss, as compared to the business-as-usual scenario with no reforms. Figure E2 Figure E2. Annual Average GDP Changes from BAU and Reform Development Scenario Baselines Business as Usual Reform Scenario with no Adaptation 0.0 0.0 -0.5 -0.5 -0.7 -0.7 -0.6 -0.7 -1.0 -0.7 -0.8 -0.8 -1.1 -1.1 -1.0 -0.8 -1.2 -1.5 -1.3 -1.3 -1.3 -1.2 -1.3 -1.5 -2.0 -1.7 -1.7 -2.1 -2.1 -2.5 -2.0 -2.1 -2.2 -2.8 -2.7 -3.0 -2.5 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S Dry and hot Wet and warm Dry and hot Wet and warm Real GDP Household Consumption per Capita Real GDP Household Consumption per Capita However, while adaptation limits climate change impacts, some residual economic losses are still anticipated, with the greatest proportion of losses projected to occur from declines in labor productivity due to heat stress, and from declines in agricultural productivity. A residual poverty rate would also mean an increase up to 1.1 percent under the Dry/Hot climate scenario with adaptation and reform measures by 2050. With adaptation to climate change having a potential cost of over $100 million over the next 25 years. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 3 Institutional Framework Changes for Climate Action Recognizing the importance of coordinated climate action, the government established the National Committee on Climate Change in 2018 to coordinate climate-related initiatives. The Comoros has also adopted the National Environmental Policy, which aims to integrate climate considerations into development planning and strengthen environmental governance. Additionally, strategic national policies, including the National Action Programme of Adaptation to Climate Change and the national strategy for risk and disaster reduction have been drafted and are ready for adoption in 2024. However, the existing Framework Law of the Environment as well as the National Environmental Policy require updates, and although a technical draft of the latter is available, it has yet to be finalized and adopted. Although the Comoros has made commendable commitments to climate adaptation and mitigation, enhancing the regulatory and institutional frameworks, as well as addressing implementation challenges are key to achieving further progress. Weak institutional arrangements, limited resources, and capacity constraints hinder the effective coordination and implementation of national policies on climate change, disaster risk management, and natural resources management, among others. Climate change monitoring and evaluation, as well as knowledge management functions, offer valuable opportunities for improvement in the Comoros, which could in turn enhance the effectiveness of interventions, optimize investment efficiency, and increase access to international funding. Although various sectors have experienced a proliferation of policy and regulatory measures, strengthening political commitment, promoting inter-agency collaboration, and improving institutional capacity to enforce reforms can effectively address existing gaps in implementation. Furthermore, strengthening governance can significantly enhance the country’s capacity to effectively respond to crises. Since 2018, the country’s governance capacities have encountered challenges due to increasingly centralized executive power. The evolving power dynamics post-2019 have introduced challenges, including siloed and ad hoc policy and budgetary decisions, and a lack of coordination, all of which underscore the importance of prioritizing efforts to improve the quality of public governance. Additionally, there is a need for a more inclusive distribution of mandates and resources across governance levels, considering the reduced transfers to island governments and the limited support for decentralized municipalities, which are essential for effective service delivery. Nevertheless, the gradual evolution of the institutional framework to address climate change presents a valuable opportunity for growth. By strengthening the political system, the Comoros can significantly reduce the risks of policy inaction on the climate agenda and foster a more resilient future. Addressing these implementation gaps and challenges calls for a coordinated, multi-sectoral approach that includes meaningful engagement with informal institutions at the grassroots level, which will be essential in fostering effective solutions and ensuring sustainable progress. Strengthening institutional arrangements, clarifying roles and responsibilities, and enhancing coordination mechanisms can improve the effectiveness of climate governance structures. More specifically, clarifying the mandates of the National Committee on Climate Change by organizing members into working groups based on their expertise and strengths would promote collaboration and enhance effectiveness. A working group on national climate observation that is in charge of coordinating and centralizing monitoring and evaluation and knowledge management to fulfil the country’s NDC engagement is recommended. Additionally, investing in capacity- building initiatives, providing technical assistance, and mobilizing financial resources are vital for effectively implementing climate policies and programs. In a context where formal central state institutions have limited reach outside the capital Moroni, and island- and municipal-level institutions lack financial and human resources, community organizations are critical for resilience and adaptation to climate change. Research on climate adaptation has shown that a strong sense of social capital enhances adaptive capacity. The strength of local community associations and established governance structures, such as ‘conseils des sages’ (village councils), indicate their potential 4 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS to support community adaptation to climate change. Given the critical roles villages and communities are playing, leveraging and enhancing these organizational capacities will improve adaptation, mitigation, and information monitoring efforts on the ground, including the mobilization of women’s groups, youth groups, and traditional leaders. Given the governance structure in the Comoros, it is important to engage, train, and empower island authorities on climate issues, enabling them to effectively integrate mitigation and adaptation measures. Strengthening climate financing flows to local levels will also greatly support community-led climate action. Financing the Climate Transition A significant share of the flow of climate finance and green growth-related sectors in Comoros comes from the public sector and has been mainly allocated for adaptation activities. Between 2019 and 2020, Comoros leveraged up to $163 million per year (almost 12 percent of GDP), 96 percent of which came from the public sector. Of the climate funds received, 68.2 percent are in the form of grants, 25.3 percent debt-financed projects on concessional terms, and only 4 percent comes from the private sector. Public sector financing comes from multilateral financial institutions (69 percent of the total) including the World Bank, with the rest made up by bilateral funding (20 percent), government funding (9 percent) and climate funds (2 percent). The country’s NDC estimates that the need for climate finance will total around $1.7 billion between 2020-2030, with an average cost of $154 million per year, of which 53 percent is for mitigation, 24 percent for adaptation, and 23 percent for loss and damages. It is likely that a lack of data combined with limited technical expertise on how to calculate adaptation costs result in these values being an underestimate of the true costs of adaptation. If the government alone was to support the costs of adaptation, public debt could increase by an average of 4 percent of GDP by 2050 without the implementation of a reform agenda. As such implementing a macro- fiscal reform agenda will be necessary to maintain macroeconomic stability. Even with the implementation of reforms, the increase in public debt could still reach 2.9 percent of GDP by 2050. In addition, as of 2024, the Comoros has limited fiscal space due to low domestic resource mobilization, fiscal rigidity, and a high risk of debt distress. This calls for innovative approaches to financing adaptation to climate change in the Comoros, including enhanced domestic resource mobilization, increased private sector participation, effective management of climate change risks, and the strategic use of concessional financing. With limited fiscal space for public investment in the Comoros, the private sector is essential for financing the transition to a sustainable and climate-resilient economy by maximizing limited public resources and mobilizing private capital, expertise, and innovation, and unlocking climate finance. Public-Private Partnerships can also provide well-informed and well-balanced risk allocation between public and private stakeholders, offering long-term visibility and stability for the duration of a contract. This contractual predictability can compensate for the uncertainty of climate change. Establishing an appropriate Public- Private Partnership framework is critical to attract private investments in key sectors exposed to climate- related risks, such as critical infrastructure (water, electricity, transportation, information communication technology connectivity). For the Comoros, Public-Private Partnership opportunities could be explored in renewable energy technologies, as well as incentivizing industries to adopt green technologies, develop eco-tourism, and invest in climate-resilient infrastructure. Achieving increased private sector involvement will necessitate not just new investments but also the coordination of effective policies and regulations to foster private sector development. Those policies would include raising awareness on climate risks and opportunities, improving the overall investment climate, developing a national adaptation investment plan, and implementing climate-oriented regulatory reforms. The Comoros could explore opportunities to secure funding through carbon markets. The country has declared its intention to become a carbon sink, reducing its net CO2 emissions by 23 percent and increasing its net CO2 absorption by 47 percent by 2030, mainly through the afforestation, reforestation, agroforestry, and arboriculture practices. Achieving these targets could enable the country to access international COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 5 mechanisms for trading carbon credits. However, the country currently lacks a carbon framework to facilitate the marketability of these credits. Furthermore, the Comoros has the potential to enhance its green finance initiatives by joining international networks such as the Network for Greening the Financial System and the Sustainable Banking and Finance Network. Through its Regional Climate Resilience Project for Eastern and Southern Africa, the World Bank will support leveraging climate financing instrument for the Comoros, while promoting multisectoral climate governance and crowding in climate financing from different sources. Increasing awareness and capacity for both financial sector authorities and the industry is essential to develop a green finance agenda and expand adaptation mechanisms for climate change. Similarly, financial instruments such as blended finance and conservation trust funds have the potential to unlock blue financing in the Comoros. The country could also explore debt-for-nature swaps with its creditors, potentially freeing up resources for climate resilience and adaptation efforts. Climate Change and Development Challenges and Priorities A wide array of investments, policy reforms, and other interventions are needed in the Comoros to strengthen resilience to meet the country’s development goals in the face of challenges introduced by climate change. The analysis presented in this report shows climate change to have sizeable implications for the development of various sectors in the country. Given the country’s fiscal constraints and the scale of action required, it will be critical to identify and prioritize the needed interventions, as summarized below. Focus Area 1: Improve the Productivity and Resilience of Agriculture and Fisheries The Comoros can build on its existing fisheries regulatory framework outlined in the Fisheries and Aquaculture Code of 2007 when crafting a more comprehensive governance framework to manage fisheries. In addition, the country already has a sizeable fisheries sector that can support food security and livelihoods if expanded in a sustainable way. Among the various proposed interventions, some of the identified Nature-Based and Climate Smart Agriculture strategies have relatively low costs, making them more financially feasible for the country in the near term. Finally, the development of dedicated funding streams and programs for women and youth while delivering several of investment opportunities in this focus area can help support improved equity in agriculture and achieve progress towards development goals. Focus Area 2: Invest in a Climate-Resilient Infrastructure Network The Comoros has an existing transport network that can serve as the foundation for future expansion and rehabilitation. Incorporating resilience measures during infrastructure construction typically represents a marginal additional expense as compared to infrastructure developed to withstand current climate risks. The country may also have the potential for “leapfrogging” in areas where infrastructure is being developed for the first time, drawing on lessons learned from other countries on climate-resilient development e.g., concrete roads in flood-prone areas. Finally, resilient transportation systems can support other sectors and development goals, such as food security, energy security, health, education, and job creation. Focus Area 3: Safeguard Water Supply in the Face of Growing Demand and a Changing Climate The Comoros has existing water resource development in coastal aquifers that can be sustainably expanded in the future and has an operating framework in place that identifies water management goals. The country has an opportunity to select from a broad range of water supply and management solutions that can be tailored to the different hydroclimatic conditions across the different islands. In doing so, there is an opportunity for the Comoros to decentralize water systems in favor of solutions tailored to local conditions. 6 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Focus Area 4: Increase Renewable Energy Generation Capacity Comoros has significant potential for renewable energy generation, including wind, solar and geothermal. In addition, there is potential for local renewables to support energy self-sufficiency in the country, transitioning away from the current reliance on imported fossil fuels. Finally, the recently approved renewable energy regulation provides a good foundation on which to further update the country’s regulatory framework for renewable energy. Considering the limited resources and the complex dynamics of the policy and investment actions detailed in this report, the table below outlines key recommendations, categorized by type of intervention (knowledge, investment, or institutions) and urgency (short-, medium-, or long-term). Table ES1. Comoros CCDR Key Recommendation TYPE OF PRIORITY ACTIONS URGENCY INTERVENTION Focus Area 1: Improve the Productivity and Resilience of Agriculture and Fisheries Enhance agricultural resilience by assessing irrigation potential, improving data accuracy, and prioritizing cost- Medium term effective irrigation expansion. Irrigation Enhance physical capital by rehabilitating agricultural infrastructure, especially water harvesting and storage Medium term infrastructure in support of irrigated agriculture. Apply a broader blue economy approach and incorporate Nature-Based Solutions nature-based solutions to promote sustainable and Medium term inclusive economic growth. Enhance climate-smart agriculture, agricultural Agriculture Long term knowledge and innovation. Improve climate resilience in the fisheries sector through governance reforms, and by exploring alternative Short term livelihoods and economic activities including coastal Fisheries ecotourism. Improve the country’s fisheries sector through expanded Short term supply-chain infrastructure. Enhance economic inclusion and community resilience Social Protection by promoting climate-sensitive food systems and green Long term jobs. Improve the enabling environment for agriculture and Finance Medium term agribusiness development. Focus Area 2: Invest in a Climate-Resilient Infrastructure Network Increase investment in climate resilient infrastructure and measures to reduce vulnerability including Short term prioritizing the maintenance of key national roads and Roads relocating vulnerable assets. Fully operationalize the Road Fund. Short term Enhance climate resilience in infrastructure Early Warning System management by creating climate services for effective Medium term early warning systems. Enhance adaptive capacity through improved inter- Ports and Airport island and mainland Africa connectivity by climate-smart Medium term transportation network expansion. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 7 TYPE OF PRIORITY ACTIONS URGENCY INTERVENTION Strengthen implementation and management of nature- Short term based solutions. Develop a monitoring and evaluation framework to Coastal Management Medium term quantify the benefits of nature-based solutions. Support traditional grey infrastructure services with Medium term coastal nature-based solutions. Develop education infrastructure that is resilient against Education Short term climate shocks. Strengthen climate-resilient health systems and Health Short term infrastructure. Focus Area 3: Safeguard Water Supply in the face of Growing Demand and a Changing Climate Increase investments in water supply, storage, and Water Supply distribution to ensure a secure water supply amidst Medium term climate change risks. Improve water quality by enhancing water quality control, Water Quality expanding water, sanitation, and hygiene programs, and Short term improving environmental protection measures. Develop water masterplans at the island level, Water Resources incorporating principles of Integrated Water Resources Short term Management Management and building on the SCA2D action plan. Strengthen health strategies and enhance health Medium term personnel capacity. Health Strengthen disease surveillance and detection Medium term capabilities. Focus Area 4: Increase Renewable Energy Generation Capacity Expand renewable energy generation in the country, in line with achieving the country’s Least Cost Medium term Renewable Energy Development Plan. Generation Implement the transition plan by strengthening Short term institutional roles. Electricity Tariff Conduct electricity tariff reforms. Medium term Improve the legal and regulatory framework governing Finance Long term the energy sector. Electricity Cost Develop a national energy sector strategy. Short term Legend Type of Intervention: = Knowledge = Investment = Institutions Urgency: Short term = 1-2 years; Medium term = 3-5 years; Long term = 5+ years 8 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 9 © Sachiko Kondo 1. Climate Change and Development Challenges and Priorities 1.1. Context and Development Challenges The Union of the Comoros (“The Comoros”) is a small archipelagic country composed of three islands (Ngazidja, Ndzuwani and Mwali) off Africa’s east coast, located at the northern entrance of the Mozambique Channel in the Indian Ocean. The country’s total land area of 1,860 km2 is dwarfed by an Exclusive Economic Zone of 160,000 km2. As of 2020, the population of the Comoros was around 870,000, and has been steadily growing since 1960, especially in rural areas. Despite this population growth, the Comoros has yet to fully experience the benefits of its demographic dividend. The Comoros has achieved moderate economic growth but faces fiscal challenges that limit sustained long-term development. From 2011 to 2020, GDP growth averaged 2.7 percent, resulting in an average per capita Gross Domestic Product (GDP) growth of only 0.4 percent. The economy relies heavily on consumption, driven by remittances from the diaspora and lacks diversity, with a small, predominantly informal private sector that contributes minimally to value addition. Foreign grants have exacerbated an environment without incentives for investment in human and capital stock. Unemployment rates are relatively high, especially among youth. In 2014, half of the young working-age population was unemployed, with only 3 percent formally employed. Fiscal conditions limit environmental sustainability, economic growth, and improved living standards, while underperforming state-owned enterprises restrict fiscal flexibility to respond to natural disasters as debt increases. Poverty is a challenge, with an estimated 39 percent of the population below the poverty line in 2022 (Figure 1). This situation is compounded by high inflation rates, peaking at 12.4 percent in 2022, reaching 9.2 percent in 2023, with a forecasted drop to 2.2 percent in 2024. While private consumption, financed largely by remittances, drives the economy, it underscores the lack of robust local investment and innovation, leading to a widening external trade deficit as imports grow faster than exports. Limited public investment in productivity-enhancing infrastructure has led to inadequate operational efficiency for firms, stifling private sector development. This stagnation constrains fiscal space, which increases public debt. Debt reached 38 percent of GDP in 2023, more than double what it was in 2017 (Figure 1), and further limits the government’s ability to invest in critical infrastructure. Heavy involvement of state-owned enterprises, contributing up to 43 percent of the government budget, exacerbates this cycle, as insufficient private investment fails to stimulate high-productivity sectors. 10 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS FIGURE 1 Figure 1. Selected Macroeconomic Imbalance Indicators (left) and Actual and Projected Poverty Rates and Real GDP per Capita (right) in the Comoros Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 60 0 80 550000 -1 70 50 540000 -2 60 530000 40 -3 50 520000 30 -4 40 510000 -5 30 20 500000 -6 20 10 -7 10 490000 0 -8 0 480000 2018 2019 2020 2021 2022e 2023f 2024f 2025f 2014 2016 2018 2020 2022 2024 INTERNATIONAL POVERTY RATE LOWER MIDDLE-INCOME PCV. RATE DEBT CURRENT ACCOUNT BALANCE (RHS) UPPER MIDDLE-INCOME PCV. RATE REAL GDP PC FISCAL BALANCE (RHS) Source: National authorities and World Bank staff estimates Source: World Bank and forecasts To break this cycle, there is a pressing need to rebalance growth toward private investment, exports, and strategic public investments that can stimulate private sector development. For instance, Comoros’ structural and aspirational peers have achieved capital investment levels of 27.8 and 27.7 percent of GDP, respectively, between 2011 and 20202. By adopting policies and making targeted investments to improve productivity and boost growth in key sectors, Comoros could escape this cycle and improve the well-being of its population. The primary sector, agriculture and fisheries, continues to account for a significant and growing share of the Comoros’ GDP, highlighting the opportunity for future structural transformation. The primary sector contributed 36.4 percent of GDP in 2022, up from around 30 percent in 2010. This change stems primarily from an increase in the contribution of the fisheries sector, which grew from 7.3 percent of GDP in 2010 to 13.1 percent in 2022. Fisheries’ growth momentum has been disrupted by sector governance issues that led to the issuance of a red card3 by the European Union and the suspension of the fisheries partnership agreement in 2018, with loss of access to the European market. Sectoral growth declined from 9.4 percent in 2016–18 to 3 percent in 2021–22, while the agriculture sector has been rebounding with a growth rate of 3 percent in 2021–22, up from –0.4 percent in 2016–19. 2 The 2023 Country Economic Memorandum identified a set of structural and aspirational peer countries for Comoros. Structural peer countries include small island countries that share the same economic fundamentals as Comoros: Sao Tome and Principe, Timor- Leste, and Solomon Islands. Aspirational peer countries have similar structural characteristics as Comoros but have registered faster per capita growth and managed to develop their tourism sector: Tonga, Samoa, Fiji, Cabo Verde, Mauritius and Seychelles. 3 The issuance of a red card is a sanction imposed by the European Union on fish-exporting countries who have been warned (through a prior yellow card) that they have failed to take remedial action to address illegal, unregulated, and unreported fishing. The Comoros did not take corrective measures when it was issued a yellow card and has since been sanctioned with a ban on fish imports into the European Union, and the suspension of the Sustainable fisheries partnership agreement with Comoros, along with structural support to the fisheries sector by the European Union. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 11 Limited human and physical capital constrain growth in sectors with high job potential, and there is notable over-reliance on imports. The Comoros is endowed with fertile volcanic soil and good precipitation, and the extensive Exclusive Economic Zone places the country in the top 10 countries globally in terms of fisheries as a share of wealth and blue natural capital (mangroves and marine capture fisheries).4 However, limited investment in human and physical capital has left the country unable to leverage its agricultural and fishing potential to meet even local demand. Hence, food imports represent about 41 percent of merchandise imports, compared to 25 percent in structural peers, 12 percent in Sub-Saharan African countries, and 10.6 percent in lower-middle-income peer countries. Limited fiscal space and inefficient public expenditures, including a lack of climate change considerations in public investments, pose a significant challenge to resilient development. The country relies heavily on foreign grants and remittances, resulting in a decline in physical and human capital stock. Multiple shocks, such as natural disasters, the COVID-19 pandemic, and price shocks, have further eroded macro-fiscal performance, leading to a widening fiscal deficit. The underperformance of state-owned enterprises adds to the strain on public finances and hampers the government’s ability to respond to climate shocks. Poor financial performance of state-owned enterprises affects productivity growth, government revenues, and fiscal sustainability. Addressing these challenges requires improved management of these enterprises, debt management, and the enactment of a renewable energy law to enhance financial performance and access to low-cost energy sources. In addition, the Comoros has a history of fragility,5 with many of the drivers of fragility exacerbated in recent years. The country has witnessed over 20 attempted and successful coups and eight constitutional revisions since Independence in 1975. The Fragile States Index shows that fragility indicators have been trending down since the latest constitutional changes implemented by the 2018 constitutional reforms and remain at levels considerably lower than in 2017, pre-constitutional reform. The country’s institutional and political trajectory since 2018 has seen an increase in the centralization of executive power, and exacerbation of inter-island inequities and grievances. Current developments present potential risks of social and political instability, including the possibility of violent mobilization by marginalized groups. Despite stringent measures, there are ongoing expressions of social and political discontent. The 2018–2019 wave of political protests, following the constitutional reform and presidential election, was met with decisive actions, resulting in a notable decrease in civilian- led political protests. Although the number of protests has decreased as a result of repression, there remain regular expressions of social discontent.6 Figure 2 illustrates trends in protests and riots since 2020.7 A significant number of these protests, including some that turned violent, have been driven by citizens’ desire for enhanced public services, such as water and electricity, as well as concerns over inflation, particularly the rising prices of rice.8 Protests also broke out around the 2024 presidential elections, as opposition parties contested election results.9, 10 4 World Bank. 2021. Executive Summary. Vol. 2 of 2. Washington, DC: World Bank Group. 5 See World Bank. 2018. Risk and Resilience Assessment. 6 Armed Conflict Location and Event Data Project data; Freedom House, Comoros 2021 Country Report, (Washington DC: Freedom House), US Department. Comoros 2021 Human Rights Report. Published April 2022. 7 Armed Conflict Location and Event Data starts in 2020, with no systematic record of riots and protests in Comoros before that date. 8 Armed Conflict Location and Event Data. 9 The content of the legislative texts are not fully known but are expected to cover issues such as the definition of political opposition and the rights of the opposition. https://www.rfi.fr/fr/afrique/20220322-le-pr%C3%A9sident-assoumani-a-re%C3%A7u-les-conclusions- du-dialogue-inter-comorien 10 Economist Intelligence Unit. 2022. Comoros Country Report. Generated November 14th, 2022 12 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS FIGURE 2 Figure 2. Protests and Riots in Comoros (2020-2023) 25 Point Layer Battles 20 Violence against civilians Explosions/Remote Violence 15 Riots Protests Strategic deveopments 10 Multiple event types 5 0 2020 2021 2022 2023 Source: Armed Conflict Location & Event Data 1.2. Key Risks and Impacts from Climate Change Climate change is projected to cause an increase in temperatures, leading to negative impacts on agriculture, food production, costal management, infrastructure, and water supply. The Comoros has experienced an increase in average annual temperature of 0.9°C over the 20th century. Since 2014, the average annual temperature has always exceeded 23.8°C, reaching more than 24.2°C since 2019. This warming trend will continue, with projections indicating temperature increases of 0.8°C to 2.1°C by 2060 and 1.2°C to 3.6°C by 2090 (Figure 3).11 Climate change is likely to increase the occurrence of droughts, which negatively impact agriculture and food production. The country experienced prolonged droughts in the late 1990s and early 2000s, affecting water resource availability. The risks of water shortages due to drought are exacerbated by the volcanic origin of the Comoros, with few perennial rivers and low water storage capacity. Furthermore, coastal erosion is anticipated to cause damage to approximately 29 percent of roads and strategic infrastructure, and at least 10 percent of the coastal population may be displaced by 205012. These findings highlight the urgent need for measures to mitigate the impacts of climate change and to strengthen adaptation to protect the population and infrastructure in the Comoros in the short and long term. 11 World Bank Climate Change Knowledge Portal 12 IMF. 2010. Union of the Comoros: Poverty Reduction and Growth Strategy Paper. https://doi.org/10.5089/9781455203383.002 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 13 FIGURE 3 Figure 3. Observed and Projected Mean Air Temperature Scenarios in the Comoros (1990-2100) 31 Projecte dAverage Mean SurfaceAir Temperatute 30 Comoros; (Ref. Period: 1995-2024)), Multi-Model Ensemble 29 28 27 26 25 24 1960 1980 2000 2020 2040 2060 2080 2100 HIST. REF. PER., 1950-2024 SSP1-2.6 SSP2-4.5 SSP3-7.0 SSP5-8.5 Source: World Bank Climate Change Knowledge Portal Erosion of coastal areas and arable land are existing concerns likely to be exacerbated by climate change. Since 1993, sea levels have been rising at a rate of 1 to 6 mm per year (Figure 4), with further projected increases of up to 4 mm annually13, resulting in increased coastal erosion.14 The effects of sea level rise are already being observed in Mwali and Ndzuwani, where coastal erosion is degrading coastal areas, beaches, agricultural land, and forests. Rising sea levels have also led to increased salinity of groundwater resources, as well as4damage to coastal infrastructure.15 FIGURE Figure 4. Historical Sea Level for Coastal Comoros (1993-2015) Based on Satellite Data, with Observed Anomalies (mm) Relative to the Mean (1993–2012) 300 Average Historical Level Anomaly 200 100 0 -100 -200 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 AVERAGE MONTHLY ANOMALY AVERAGE ANNUAL ANOMALY JANUARY Source: World Bank 2021 13 United Nations Framework Convention on Climate Change. 2002. Initial National Communication on Climate Change. Union des Comores. https://unfccc.int/sites/default/files/resource/Comoros%20INC_Exec.%20Summary_English.pdf 14 World Bank. 2023a. Global Environment Facility. 2009. 15 World Bank. 2019. 14 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS In addition, natural disasters have historically posed a significant threat to the Comoros’ development and will continue to do so. The Comoros archipelago is exposed to many natural hazards (storms, tropical cyclones, droughts, floods, earthquakes, volcanic activity) that adversely affect the country’s natural capital, people, and physical infrastructure (Figure 5)16. It is estimated that about 54 percent of the Comorian population is exposed to natural disasters.17 The country has been affected by more than 18 natural hazards in the last 40 years, with 11 tropical depressions or cyclones between 2018 and 2023. In 2019, Tropical Cyclone Kenneth caused damage equivalent to 14 percent of GDP, resulting in total economic growth dropping from 3.6 percent in 2018 to 1.9 percent in 2019.18 Climate change and its impacts to the Indian Ocean will further aggravate existing hydrometeorological risks. Figure 5. Overview of Frequent Natural Hazards and the Number of People Affected (1980-2020) KEY NATURAL HAZARD STATISTICS FOR 1980-2020 NUMBER OF PEOPLE AFFECTED 1M 100K NUMBER OF PEOPLE 10K 1K 100 10 1980 1985 1990 1995 2000 2005 2010 2015 DROUGHT STORM EPIDEMIC VOLCANO ACTIVITY FLOOD EARTHQUAKE Source: Climate Change Knowledge Portal, For Development Practitioners and Policy Makers, Country Comoros, World Bank 2021 (https://climateknowledgeportal.worldbank.org/country/comoros/vulnerability) Poor and vulnerable populations are typically most negatively affected by extreme climatic phenomena, but limited social protection systems are in place. In 2023, an estimated 367,700 people were living in poverty, with a poverty ratio of 44.8 percent.19 The poverty ratio is higher in rural areas (50.6 percent) and on Ndzuwani (49.4 percent). Cyclone Kenneth damaged 241 villages and 45 communes,20 with three-quarters of the affected villages characterized by poverty rates of over 50 percent (Figure 6). More than 345,000 people were affected, but the country had neither a shock-responsive program nor prepositioned funding for crisis response. This highlights the importance of strengthening the social protection system, including early warning systems, to enable a swift response from the government.21 16 United Nations. 2021. Country programme document. Comoros. Economic and Social Council. https://documents.un.org/doc/ undoc/ltd/n21/214/02/pdf/n2121402.pdf 17 Country Environmental Analysis (CEA, 2022) 18 World Bank. 2023a. Concept Note: Comoros Country Climate and Development Report (ID: P500418): Comoros (Eastern and Southern Africa) 19 World Bank. 2021. Poverty and Equity Assessment Report, Washington DC: World Bank. 20 Interministerial Committee – DGSC Comoros - UNDP, 2019. 21 The social safety nets project (P150754) has been restructured to respond to Cyclone Kenneth. The intervention has focused on the 118 worst-affected villages. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 15 Figure 6. Number of Villages Affected by Cyclone Kenneth and Incidence of Poverty AFFECTED VILLAGES AND INCIDENCE OF POVERTY 70 30% 60 27% 25% 50 20% 40 15% 15% 30 13% 11% 12% 10% 20 10% 5% 6% 5% 10 2% 0 0% 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 NUMBER OF AFFECTED VILLAGES AFFECTED VILLAGES (%) Source: DGSC; National Institute of Statistics, Economic, and Demographic Studies (INSEED); and author’s calculation. The Comoros will face significant costs due to climate change, estimated to reach $836 million by 2050. 22 This is a substantial increase from the 2014 estimate of $5.7 million annually for the economic cost of natural events (or 9.2 percent of GDP).23 The current vulnerability of the country to natural disasters highlights the need for effective measures to mitigate their impact and promote resilience. 1.3. Climate Impacts on the Development Agenda The Plan Comores Emergent 2030, the long-term national strategic action plan adopted in 2019, outlines interventions to drive economic transformation and sustainability. The development agenda in the Plan Comores Emergent focuses on (i) fisheries and costal management to elevate the country to a tourism destination in the Indian Ocean and promote blue economy projects; (ii) renewable energy and energy supply to support Comoros’ energy circle; (iii) transportation to unite the islands by sea; (iv) digital development for Moroni to become a financial smart city and digital administrative district; and (v) agriculture to promote agri-business, including value chain development. Climate change will have a significant impact on urban development and disaster risk management. Unregulated urban expansion and poor land use planning worsen damages from sea level rise and coastal erosion, while urban development contributes to climate change through deforestation and inadequate waste management. Development planning could consider climate, implementing sustainable waste management practices, and constructing resilient infrastructure. Strengthening information systems, and disaster risk management systems and regulations (such as risk-informed land use planning), will be key to enhance preparedness and response to climate hazards, as will developing effective waste management systems and resilient urban and coastal infrastructure. Poorer and marginalized groups in the Comoros are more vulnerable to climate impacts, driving increased poverty, inequality, and social exclusion. The extent of poverty and social exclusion varies across the islands, with Ndzuwani being particularly susceptible to climate impacts due to its reliance on small-scale fishing and agriculture. In contrast, Ngazidja demonstrates greater resilience due to its diverse economy and better connectivity. However, access to employment, especially for young people, remains a challenge in building household resilience. The loss of transportation infrastructure from climate shocks exacerbates 22 United Nations Framework Convention on Climate Change, 2015. 23 World Bank (2019). Global Rapid Post Disaster Damage Estimation (GRADE) – Cyclone Kenneth in Comoros: Preliminary Report, World Bank: Washington DC. World Bank (2016). Comoros Disaster Risk Profile, World Bank: Washington DC. 16 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS marginalization and hampers recovery efforts. Migration, both internal and external, serves as a crucial coping strategy, positively impacting poverty reduction and household income through remittances. However, it has social consequences such as male absence and family separation, straining social networks that serve as safety nets for vulnerable households during crises. Internal migration can also have negative economic and social effects on receiving communities, and the likelihood of forced displacement is set to increase due to climate change. Social protection is key for managing climate risks by addressing chronic poverty, providing regular and/ or temporary support during crises, building resilience and enhancing adaptive capacity. The capacity of the Comoros to deliver social protection programs has notably advanced, with initiatives increasingly becoming responsive to climate shocks. This positive development plays a crucial role in empowering poor households to manage risks and seize new opportunities. Programs consist of core safety net interventions that operate continuously, as well as crisis response, scaled up during climate events. The government has made commendable progress in developing these programs to support poor and vulnerable populations. However, the system remains fragile, with coverage reaching only 10 percent of the population from 2020 to 2023. Expanding and improving social protection is essential for further reducing poverty, enhancing resilience, and increasing the capacity to respond to shocks. Digital technologies play a crucial role in mitigating disruptions caused by climate shocks. The Comoros can enhance the resilience of connectivity and data infrastructure by incorporating redundancy and backup facilities for communications, critical network storage, and data hosting and processing, to keep communication systems operational during and after a disaster, maintaining the flow of information and ensuring rapid response times. Implementing industry-wide standards for infrastructure robustness, redundancy, emergency telecommunications, and disaster recovery planning, can further strengthen the resilience of digital infrastructure against climate-related events. Additionally, fostering cooperation and incentive mechanisms are important to achieve maximum uptime and facilitate swift recovery. Greening the digital sector will involve deploying energy-efficient equipment, renewable energy sources, and effective e-waste management practices.24 However, with a 2 gigabyte data package representing 6.9 percent of the average monthly individual income in 2023, the high cost of digital services remains a constraint to ensuring consistent access to climate and environmental data. Climate change impacts also pose significant challenges to the financial sector in the Comoros, diminishing the ability of financial institutions to provide adequate financing for development. Natural disasters and climate events can have severe consequences on the stability and functioning of financial institutions. Conversely, the financial sector plays a crucial role in providing climate finance for adaptation. The current underdeveloped state of the financial sector hampers the flow of funds towards climate change mitigation and adaptation efforts. To address these challenges, it is essential to prioritize financial inclusion and strengthen the financial sector and markets. This involves providing access to financial services for individuals to cope with climate impacts and creating an enabling environment for sustainable investments and the allocation of funds towards climate-friendly projects. The education system in the Comoros lacks the necessary mechanisms to address both immediate and long-term effects of climate-related shocks.25 This may have long-lasting impacts on children. Furthermore, warmer temperatures have been shown to be detrimental to learning outcomes. Incorporating essential information about climate change, disaster management and risk reduction into school curricula is crucial for embedding climate-related principles in education. However, this could be done without crowding out foundational learning. Instead, climate topics can be used to teach and reinforce foundational skills. The 24 Leveraging digital technologies can also contribute to climate change mitigation, adaptive capacity enhancement, economic diversification, decarbonization, and optimization of transportation and energy systems. 25 For instance, 465 classrooms, 147 water tanks and 9 health facilities were damaged by Cyclone Kenneth in 2019. Of these, 157 classrooms and 71 water tanks have been rehabilitated through the Social Safety Net Project (P150754). COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 17 school curriculum at basic level can cultivate awareness and encourage the adoption of climate-resilient behaviors. Climate education raises awareness among teachers and students, which can build pro-climate behaviors and support for policies. Raising climate awareness through Comoros’s education system will enhance the vulnerable island nation’s likelihood of pro-climate policies being requested by communities and policymakers’ enactment of needed solutions. It is imperative to prioritize the development of the education sector in addressing climate change by integrating climate change education in the curriculum, providing support to vulnerable families, and constructing resilient school and health infrastructure. Climate change has implications for human health and can exacerbate the country’s burden of disease as well as inequalities in accessing health services. The country is prone to infectious disease outbreaks and increasing temperature and precipitation under climate change are likely to drive increased malaria transmission and a rise in vector-borne diseases. Increased frequency and severity of storms and flooding may drive increased deaths, injuries, food and water insecurity, spread of diarrheal diseases and other waterborne diseases, with a disproportionate impact on poor and vulnerable populations. Furthermore, while the health sector is essential for emergency response to extreme weather events and community support, it is vulnerable to disruption by extreme weather. Strengthening the health system’s resilience is vital to ensure continuity of services amid climate hazards. Climate change will significantly impact household living conditions. The loss of harvests from cultivated land washed out by rains and non-renewal of groundwater will impact agricultural production, resulting in limited access to agricultural products, rising prices, worsening food insecurity and malnutrition, reduced purchasing power and investment, deterioration of infrastructure, and rising unemployment. Furthermore, the destruction of physical infrastructure disrupts essential services, limiting access to schools, and health and nutrition centers. Having resources ready for immediate use after climate events will be crucial, as will setting up flexible social protection programs that can be swiftly deployed. To enhance resilience to climate risks, it is essential to support poor and vulnerable populations, as shocks can exacerbate existing vulnerabilities. The most vulnerable populations often depend on agriculture for their livelihoods. With a national poverty ratio of 44.8 percent in 2023, poverty rates are even higher among households involved in livestock farming (60.8 percent) and agriculture (54.9 percent), both of which are particularly exposed to climate shocks. Diversification of livelihoods will help reduce the climate vulnerability of these groups as it can provide alternative income during the off-season, and potentially increase overall income while reducing dependency on one primary source. Climate change can exacerbate inter-island inequities and grievances, which are a major determinant of political instability and latent conflict. Climate impacts are expected to vary by island, with Ndzuwani more affected than Ngazidja, in part due to its higher reliance on small-scale fishing and agriculture. Yet the current political system is not equipped to respond effectively to the different effects of the climate crisis across the islands. The 2018 constitutional revision did not just put an end to the “tournante” system that rotated the Union’s presidency between the three islands but also curtailed island autonomy by weakening island prerogatives and virtually removing financial transfers to Ndzuwani and Mwali, further straining inter- island relations and exacerbating grievances. 26 These changes triggered a wave of protests in 2018 and 2019, as well as a failed insurrection after the March 2019 election. These developments exacerbated inter-island inequities and generated latent risks of social and political instability, including risks of coups or violent political mobilization. 26 Since the constitutional revision of 2018, executive power has become increasingly concentrated in the hands of President Assoumani, who originates from Ngazidja and whose power has been further consolidated in recent elections in January 2024. 18 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 1.4. Main Levers for Climate-Resilient and Green Development For the Comoros, adaptation and climate-resilient development are the key focus areas for climate action, as the country is projected to face $836 million by 2050 in additional costs due to climate-related impacts. 27 The country’s commitment to addressing climate change was formalized through its commitment to the Paris Agreement. Through its Nationally Determined Contribution (NDC), the country plans to increase the share of renewable energy and to adapt to the impacts of climate change by implementing measures including improved water management, strengthened coastal protection, and climate-smart agriculture practices. Additionally, the Comoros aims to become a carbon sink and significantly reduce greenhouse gas emissions by 2030. Given the country’s reliance on its natural resource base for economic growth, protection of these resources from climate change will be essential for promoting resilient growth and development. Approximately 35 percent of the population in the Comoros is involved in agriculture, forestry, and fisheries, with these sectors contributing a similar share to national GDP.28 These economic activities are particularly vulnerable to climate change due to potential changes in rainfall, erosion, ocean temperatures, and sea level rise. Programs and operating frameworks that increase the adaptive capacity of these sectors will be most effective in mitigating climate related impacts. Strategies and frameworks already in place will need to be scaled up and expanded to provide adequate resilience and ensure future growth.29 In addition to growing the adaptive capacity of natural resource sectors, strategic economic diversification will also be important to help minimize future climate impacts. Capacity-building will also be critical given the fast evolution of knowledge on climate change subjects and the need for the Comoros to build its institutional capacity. Several training programs to benefit a variety of stakeholders are already planned, and since 2023, climate change courses have been thoughtfully integrated into the university curriculum as a mandatory subject for freshman and sophomore students, displaying the Government’s commitment to addressing climate change on a national level. Expansion of such initiatives will help ensure the necessary technical skills and capacities are available to achieve climate-resilient and green development. Ultimately, development activities could focus on building resilience, offering protection to people and infrastructure, as well as attracting low-carbon co-benefits, wherever possible. For instance, the recent Least-Cost Development Plan for electricity outlines a pathway towards a notable decrease in greenhouse emissions by shifting towards more sustainable and renewable energy sources. Emphasizing the resilience of these activities and the emissions related to the country’s economic development goals are crucial to ensure that adaptation measures meet their objectives. 27 United Nations Framework Convention on Climate Change, 2015. 28 World Bank, 2021a; World Bank, 2021b. 29 For example, the Integrated Development and Competitiveness Project in partnership with the World Bank seeks to enhance the climate adaptation capacity of agricultural producers to reduce risks from extreme weather. Also, the country’s National Fisheries Management Plan of 2020 provides an operating framework for fishers that seeks to promote sustainable fisheries management; however, a similar framework will be needed that provides guidance on fisheries operations in the wake of climate change. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 19 20 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS © Ali Alwahti 2. Country Climate Commitments, Policies, Institutions, and Capacities 2.1. Climate Change Legal and Regulatory Commitments The Comoros has demonstrated its commitment to global climate action by ratifying key international agreements, including the UN Framework Convention on Climate Change in 1994, its revised Kyoto Protocol in 2022, and the Paris Agreement in 2016, reflecting its recognition of the urgency of climate challenges and its readiness to collaborate internationally. The Comoros’ NDC outlines the country’s goals and strategies for reducing greenhouse gas emissions and adapting to climate impacts. The NDC sets ambitious targets, with a goal of reducing greenhouse gas emissions by 18 percent by 2025 and by 40 percent by 2030. The country plans to increase the share of renewable energy in its energy mix to 50 percent by 2030, not only to promote low carbon development, but also reduce dependency of imported oil and coal. While the country’s greenhouse gas emissions are minor on a global scale (in 2020, it ranked number 176 in the world for national greenhouse gas emissions), between 1990 and 2020 emissions increased by a compound annual growth rate of 3 percent. As of 2020, the energy sector was responsible for 48.3 percent of total emissions, followed by agriculture (40.8 percent) and land use change and forestry (8.8 percent).30 The Comoros has also adopted a National Environmental Policy, which aims to integrate climate considerations into development planning and strengthen environmental governance. Additionally, drafts of strategic national policies such as a National Action Programme of Adaptation to Climate Change and a national strategy for risk and disaster reduction are available and set to be adopted in 2024. The adoption of the Framework Law of the Environment (FLE) in 1994 provides a legal foundation for environmental sectors and establishes processes for environmental impact assessment. An update to the National Environmental Policy has been drafted but has yet to be finalized and adopted. Recognizing the importance of coordinated climate action, the government established the National Committee on Climate Change in 2018 to coordinate climate-related initiatives.31 The Committee is in charge of (i) overseeing the integration of the climate agenda into national planning, (ii) coordinating the development and management of knowledge around climate change, and (iii) monitoring of activities and programs supporting the fight against climate change. Additionally, in April 2024 the country established a Designated National Authority for the Green Climate Fund32 in compliance with the country’s NDC engagements.33 30 Emission Index, 2024. 31 The National Committee on Climate Change was created through Arrêté 18-009/MEAPE/CAB on September 17, 2018. 32 The Designated National Authority for the Green Climate Fund was established by Arrêté n 24-103/MAPETA/CAB on April 1, 2024. 33 The Designated National Authority is placed under the Ministry of Environment and is a dedicated working group serving as an interface and point with the Green Climate Fund. The Authority is responsible for (i) ensuring the implementation of the decisions taken by the Green Climate Fund Board of Directors, (ii) contributing to the mobilization of funds, (iii) ensuring compliance of proposed projects with Green Climate Fund eligibility standards and alignment with national climate change priorities, (iv) assessing and providing non- objection to projects to be submitted to the Green Climate Fund and (v) coordinating the monitoring of evaluation of funded projects. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 21 The Plan Comores Emergent 2030 aims to transform the country to be resilient to shocks across all aspects of sustainable development. According to the Plan, social protection is an essential catalyst for development. While building resilience and human capital are recognized as prerequisites for the success of this vision, the Comorian government commits to mitigation and adaptation measures for climate change, by inter alia, building the resilience of vulnerable groups (including women and youth) as well as by strengthening social protection and job creation. In 2016, the country adopted its first National Social Protection Policy, which aims to ensure that all citizens can meet their fundamental needs by enhancing access to essential social services and establishing social safety nets to support the most vulnerable populations. 2.2. Institutional Framework for Climate Action The Comoros has established an institutional framework to govern climate policy across various levels of governance. At the central government, the Ministry of Agriculture, Fisheries, Environment, Tourism, and Handicrafts formulates policies, designs programs, and oversees initiatives concerning climate change and climate resilience. With a broad mandate, the Ministry of Agriculture, Fisheries, Environment, Tourism, and Handicrafts establishes environmental registration systems, monitors implementation efforts, and strives to fulfill international obligations. The General Directorate of Environment and Forests oversees environmental protection actions at the international, national, and subnational levels and ensures coordination with the National Directorate of Agriculture and Livestock Strategies. The General Directorate of Environment and Forests operates through regional offices on each of the three islands, promoting and coordinating governmental and non-governmental activities related to the environment. The General Directorate of Civil Security,34 under the Ministry of the Interior, is responsible for ensuring development of a national policy on disaster risk management and ensuring its Implementation, as well as coordinating disaster preparedness, relief and response. Governorates representing each island contribute to the execution of environmental initiatives and hold sole responsibility for implementation of the Plan Comores Emergent. While the governorates enjoy administrative autonomy, their reliance on central institutions for financial support limits their operational capacity. At the island level, Regional Directorates directly oversee policy implementation, natural resources management, and environmental protection efforts. Furthermore, the islands are subdivided into 21 prefectures, each led by an appointee of the central government. Prefects enforce laws and regulations, liaise between municipalities and the governorate, and represent local administration interests. However, prefectures often face shortages in both human and financial resources, impeding their operational effectiveness. At the local level, municipalities encompassing several villages and led by a mayor, serve as the primary local authority. Although municipalities have formal status, they often face challenges due to limited administrative and financial resources, impacting their ability to fulfill duties effectively. Informal institutions such as non-governmental organizations, villages, and professional organizations play crucial roles in local communities, rooted in traditional power structures and enjoying high credibility among the population. Villages serve as core units of societal organization, with various associations focused on environmental protection and sustainable development, mobilizing funds to improve environmental management services. In a context where formal central state institutions have limited reach outside the capital Moroni, and island- and municipal-level institutions lack financial and human resources,35 community organizations play a critical role in everyday governance and welfare at the village level, which are critical for resilience 34 The General Directorate of Civil Security was established on March 9, 2012 by Decree No. 12-054/PR 35 As highlighted in the Comoros CEA 2022 published by the WB, the lack of laws and regulations to implement the 2018 constitution – especially in the areas of financial management and delineation of service delivery mandates – perpetuates local governance underperformance and dependency on community led investments. 22 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS and adaptation to climate change. Village and community associations can play an important role in building the resilience of communities to climate change impacts. In the context of limited-effect fiscal decentralization to municipalities, the role of village associations, funded by the diaspora and through contributions of local communities (including through village funds), has been well-documented in terms of financing and managing basic service delivery at the village level.36 One scholar states that while “the many crises that have marred the life of the archipelago have revealed the failings of the state, they have also showed the efficacy of self-help strategies of the communities.”37 Leveraging and enhancing these organizational capacities in villages and communities will improve adaptation, mitigation, and information monitoring efforts on the ground. Research on climate adaptation has shown that a “strong sense of social capital enhances adaptive capacity. Participation in community activities and perception of threats to the social group in question are important components of social capital in determining adaptive capacity.”38 The strength of local community associations and the established governance structures, such as ‘conseils des sages’ (village councils), indicate their potential to support community adaptation to climate change. 2.3. Implementation Gaps and Challenges While the Comoros has made significant and commendable commitments to climate adaptation and mitigation, the regulatory frameworks are still evolving, and implementation challenges persist. The FLE (1994) is missing key elements and is in the process of being updated, with revisions expected to be finalized by the end of 2024. The updated FLE could present international standards and good practices, as well as reflect the government’s revised emission reduction strategy as well as mitigation and adaptation targets presented in existing plans. While the 1994 FLE does not integrate climate change considerations into environmental impact assessment guidelines, the government has already started including such considerations in practice. Additionally, revision of the FLE could be an opportunity to further strengthen climate change coordination and institutional arrangements, and clarify mandates given the multiplicity of institutions. The updated FLE would ideally also include considerations related to climate financing, in support of the government’s commitment to better leverage climate financing moving forward. Finally, verification, reporting and oversight mechanisms are areas needing considerable improvement and stronger commitment from the government. Strengthening institutional arrangements will be key in enhancing the effective coordination and implementation of national policies on climate change, disaster risk management, and natural resources management. For instance, while the National Committee on Climate Change was officially established in 2018, additional technical and financial resources are needed to fully operationalize the Committee. While the composition and size of the Committee are comparable to other similar structures worldwide, there are opportunities to enhance its effectiveness by clarifying mandates, improving organizational procedures, and addressing overlapping responsibilities with the General Directorate of Environment and Forests. Significant value can also be added by optimizing the participation of research institutes, universities, the private sector, and civil society in the Committee, particularly in areas related to climate change information collection and management, advocacy, and monitoring and evaluation. For instance, increased consultation 36 World Bank. 2018. Comoros Risk and Resilience Assessment; World Bank. 2019. Comoros Systematic Country Diagnostic; World Bank. 2020. Comoros Urbanization Review, 37 Halidi, Adjimaël. 2020. « Situation de crise et résilience sociale aux Comores ». Presses universitaires de Bordeaux. Les Cahiers d’Outre- Mer. N° 282. Author’s translation. Community solidarity has been critical, for example, in financing post-Kenneth reconstruction as well as in the implementation of public health measures during the COVID-19 crisis, including social distancing and awareness- raising on measures to prevent the spread of the virus. 38 L.C. Hagedoorn, L.M. Brander, P.J.H. van Beukering, H.M. Dijkstra, C. Franco, L. Hughes, I. Gilders & B. Segal (2019). “Community- based adaptation to climate change in small island developing states: an analysis of the role of social capital.” Climate and Development, 11:8, 723-734 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 23 with these stakeholders in updating the LFE and other national strategies can lead to more comprehensive and inclusive policies. The National Committee on Climate Change and the recently established Designated National Authority are expected to fulfill complementary mandates, and efforts to operationalize both are progressing. There are opportunities to enhance existing funding mechanisms to increase resources available for the implementation of policies on climate change, which bolster the country’s access to international financing. For instance, the country has a centralized road funding mechanism based on a fuel levy, which is an important internal revenue source as well as a mitigation instrument for the transport sector. In 2019, the former Road Maintenance Fund was restructured into a new Road Fund, a third-generation road fund, to finance road investments and maintenance, but it has not been fully operationalized yet. While this new Road Fund opens the door to expanded sources of road maintenance funding, it has inherent weaknesses39: the fuel levy is practically fixed regardless of inflation and actual fuel consumption, meaning that in real terms, road fund revenues have decreased substantially. As a result, the Road Fund is limited in the role it can play in road asset management, planning road investment and maintenance works in advance, and allocating resources on time. In addition, strengthening governance is crucial for enhancing the country’s ability to respond to crises effectively. Since 2018, centralized and exclusive executive power has posed challenges, limiting the government’s effectiveness to respond to crises and mitigate their impact.40 The evolving power dynamics post-2019 underscore the importance of prioritizing efforts to improve the quality of public governance. Current governance challenges include arbitrary and ad hoc policy and budgetary decisions, siloed policymaking, competing governance structures at national and regional levels, and a lack of coordination. Additionally, there is a need for a more equitable distribution of mandates and resources across different governance levels, particularly considering the reduced transfers to island governments and the limited support for decentralized municipalities, which are essential for effective service delivery. Strengthening the operational capabilities of government agencies, particularly at the regional and local levels, will enhance their effectiveness. These challenges are reflected in the World Bank’s latest Country Policy and Institutional Assessment ratings, which highlight the decline in the quality of budgetary and financial management, the quality of the public administration, and in the ratings related to transparency, accountability, and corruption in the public sector.41 The political system in the Comoros presents unique challenges to advancing climate action. Characterized by top-down and exclusive decision-making, the system lacks the consultations and open deliberations necessary for comprehensive policy development. Transparent and evidence- based policy and fiscal decision-making processes are currently lacking in the government, which will be critical to advance the climate agenda. Furthermore, by increasing political commitment to the climate agenda and embracing open deliberation, the Comoros can make substantial progress in its climate initiatives. Institutional fragmentation currently challenges the Comoros’ ability to effectively address social protection objectives under climate change. A variety of social protection schemes are currently underway, variously implemented by the government, as well as donors and non-governmental organizations. These efforts are largely uncoordinated and have resulted in a fragmented and inadequate response, which in turn affects the 39 However, it remains unclear whether the Road Fund is financially autonomous to receive designated resources from the fuel levy, and it relies on late, irregular payments from the Treasury. 40 The World Bank Public Expenditure Review (2022) identified the need to “increase the mobilization of domestic revenues, increase public expenditure efficiency to improve economic and social outcomes, and enhance state-owned enterprise governance to reduce debt vulnerabilities”. 41 https://data.worldbank.org/indicator/IQ.CPA.TRAD.XQ?locations=KM. 24 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS efficiency of the social protection system. Cross sectoral coordination, with disaster risk management and other sectors, is necessary for comprehensive and joint planning and requires strengthening of government capacities at national and sub-national levels. Enhancing the effectiveness of risk surveillance systems in the Comoros will requires integration of existing systems focused on climate/weather, volcanic activities, malaria, and disease outbreaks. Addressing gaps in financial, logistical, and technical resources is critical to improving these systems to better serve national needs. The Department of Meteorology collects climate data and maintains a comprehensive database, producing regular bulletins. However, the establishment of climate services and the utilization of climate information in various sectors remain limited. For instance, there are no mechanisms to ensure that climate data is effectively incorporated into the decision-making processes for preparedness and response to climate-related events within the Ministry of Health. Additionally, the capacity to undertake climate modeling, prepare seasonal forecasts, and issue early warnings is limited. Despite the recent deployment of the health management information system DHIS2, the National Health Information System continues to underperform, with incomplete data collection and limited capacity for conducting analyses. Furthermore, there is a need for multi-sectoral collaboration and the development of a strategic risk communication plan based on the “One Health” approach. While marine ecosystems are a lifeline for the Comoros, fragmented governance and inadequate regulatory structures currently limit the country’s ability to protect these ecosystems effectively. Marine ecosystems support fisheries, tourism, and biodiversity that are crucial for economic stability and local livelihoods. However, these resources are increasingly at risk due to overfishing, pollution, and climate change. Marine governance responsibilities are scattered across multiple government bodies, including the Ministry of Agriculture, Fisheries, Ministry of Environment, and local authorities. This fragmentation leads to inconsistencies, inefficiencies, and weak enforcement. Additionally, the absence of a unified marine policy framework hinders the achievement of international conservation targets, weakening the Comoros’ standing in global environmental agreements and reducing the impact of local conservation efforts. Strengthening institutional and regulatory frameworks is therefore essential to protect marine resources, promote sustainable economic growth, and enhance resilience to environmental threats. 2.4. Ways to Enhance Resilience of the Institutional Framework Addressing these implementation gaps and challenges requires a coordinated and multi-sectoral approach, including engagement with informal institutions at the grassroots level. To enhance the effectiveness of climate policies and practices in the Comoros, several recommendations are proposed: Strengthen and update the legal and regulatory framework § Finalize and adopt key documents such as the revised FLE and National Environmental Policy. As the government updates the FLE, it will be critical to incorporate guidelines and relevant benchmarks, such as those in the World Bank’s Reference Guide to Climate Change Framework Laws, to ensure a well- executed revision. Particular attention could be paid to areas in which the government currently has limited commitments.42 § Finalize and adopt key strategies including the National Action Programme of Adaptation to Climate Change and the national strategy for risk and disaster reduction, ensuring appropriate consultation with subnational and village levels of governance to incorporate their needs and contributions. 42 These include (i) coordination mechanisms, (ii) oversight, measurement, verification and reporting on climate change progress, (iii) policy instruments for adaptation and carbon reduction, specifically on access to information/publication measures, fiscal measures and fiscal management, (iv) climate change implementation, financing measures, and appropriate public financial management measures, (v) mandates of subnational levels pertaining to climate change mitigation and adaptation COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 25 § Develop a comprehensive regulatory framework, tailored to the Comoros’ marine ecosystems, incorporating enforceable measures for sustainable and inclusive utilization of marine resources. A first step could entail marine spatial planning, involving multiple stakeholders. Then, given the role of fisheries as a major livelihood and economic activity, catch quotas could be established based on scientific assessments, habitat protection zones, and sustainable tourism guidelines. Including local stakeholders in regulatory design would increase both relevance and adherence,43. Improve institutional and political arrangements § Clarify functional climate change mandates, roles, and responsibilities and strengthen horizontal and vertical coordination across sectors and levels of government (including for subnational government and village levels). In particular, the mandates of the National Committee on Climate Change could be clarified by organizing members into working groups based on expertise.44 § Operationalize the Designated National Authority for the Green Climate Fund by building its capacity and providing financial and technical resources, including an operating manual and action plan. § Centralize coordination of climate action at a high level of government authority to ensure visibility and impact, while putting in place adequate accountability and monitoring mechanisms. Streamline the number of entities involved at national and subnational levels for greater efficiency and clarify their mandates to ensure synergy. Agencies could operate with transparency, following clear reporting mechanisms. § Conduct integrated marine spatial planning, management and conservation, building on principles of data-driven management and adaptive management so as to be capable to respond to ecosystem changes and emerging threats. Relevant stakeholders from various sectors, ministries, and local groups could be involved. Strengthen institutions and build capacity § Prioritize building internal capacities in areas that will have the most immediate impact, including strengthening local skills related to climate adaptation planning, emergency response, integration of climate risks into development strategies, and climate financing. Where specialized risk analysis expertise is needed, consider leveraging external partnerships to fill gaps efficiently. Allocate financial resources to provide practical training and tools for subnational governments, sectoral agencies, and state-owned enterprises, emphasizing climate financing mechanisms and hands-on strategies for resilience. § Fully operationalize the Road Fund. The Road Fund’s managerial and financial autonomy could be confirmed, with a full transfer of fuel levy collected ensured. In addition, the current fixed-amount fuel levy transfer mechanism would ideally be adjusted to ensure sustainability of revenue with inflation, price escalation and actual fuel consumption taken into account. With improved predictability of available resources, a holistic road asset management can be implemented with strategic prioritization focused on climate resilience and network connectivity, rather than investing and reinvesting in road infrastructure in a fragmented manner, as is currently done. § Strengthen awareness of climate change and climate change adaptation at the island and community/ village level. Given the governance structure in the Comoros, it is crucial for island authorities to be sensitized, trained, and empowered on climate issues and supported to integrate mitigation and adaptation measures at the island level. Likewise, considering the critical roles that villages and communities are actively playing on climate change (most often with their own resources), the government could capitalize 43 FAO, 2015. Voluntary Guidelines for Securing Sustainable Small-Scale Fisheries in the Context of Food Security and Poverty Eradication. 44 Among other working groups, one on national climate observatory in charge of coordinating and centralizing monitoring and evaluation and knowledge management to fulfil the country’s NDC engagement is recommended. 26 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS and build on its organizational capacities to improve adaptation, mitigation, and information monitoring actions on the ground—including through the mobilization of women groups, youth groups, and traditional leaders’ groups. Strengthening climate financing fund flows to local levels will serve to better empower locally led climate action. § Assess annually the effectiveness of the academic program focused on climate change that has been established by the University of Comoros. § Pursue international certification programs to build the national pool of individuals with needed skills and capacities. Incentive mechanisms could be considered to retain these trained individuals. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 27 28 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS © Ali Alwahti 3. Sectoral Implications and Opportunities of Climate Change To understand the impacts of climate change on key economic sectors, detailed impact modelling was performed. Due to uncertainty about how future climate will evolve, impacts were evaluated under a range of different climate futures, including three climate models depicting plausible Dry/Hot climate futures45 and three climate models depicting Wet/Warm futures46. By 2041–2050, these Dry/Hot model scenarios are projected to experience an average +1.2°C increase in temperature and a -3.7 percent decrease in precipitation relative to the historic baseline, while the Wet/Warm scenarios are projected to experience an average +0.9°C increase in temperature and a +7.9 percent increase in precipitation. Table 1 presents the global climate models used for the Dry/Hot and Wet/Warm scenarios and the degree of expected change relative to history.47 Table 1. Selected Climate Scenarios and Expected Change in Precipitation and Temperature by 2041-2050 Relative to the Historic Baseline (1995-2020) Global Percent Global Percent Change in Change in Scenario Climate Change in Scenario Climate Change in Temperature Temperature Model Precipitation Model Precipitation SSP2–4.5 SSP3–4.5 ACCESS- -5.7% +1.2°C CMCC- +9.4% +1.0°C CM2 CM2-SR5 Dry/Hot SSP3–7.0 Wet/Warm SSP2–4.5 -2.0% +1.2°C +7.4% +0.8°C Futures TAIESM1 Futures FGOALS-G3 SSP3–7.0 SSP2–4.5 ACCESS- -3.5% +1.2°C CMRM- +7.1% +1.0°C CM2 EMS2-1 Across the different climate scenarios evaluated, future Dry/Hot conditions are generally associated with more severe impacts (pessimistic) than Wet/Warm conditions (optimistic). The exceptions are impacts to erosion and rainfed crops: erosion is projected to worsen more significantly under future Wet/Warm scenarios due to the occurrence of more intense precipitation events. Additionally, impacts to rainfed crops are projected to be of comparable size by the 2040s under Dry/Hot and Wet/Warm futures. Throughout this chapter, impacts are presented for a pessimistic and an optimistic climate future, but the underlying climate scenarios that these impacts correspond to are not consistent across all channels. 45 Scenarios were selected around the 90th percentile of mean temperature change and the 10th percentile of mean precipitation change across two Shared Socioeconomic Pathways (SSPs), namely SSP2–4.5 and SSP3–7.0. 46 Around the 10th percentile of mean temperature change and the 90th percentile of mean precipitation change. 47 These same climate scenarios are utilized across all the analyses presented in this chapter with the exception of the following: § For fisheries, results were based on modelling analyses that were previously completed as part of a World Bank study (World Bank Group, 2019. Climate Change and Marine Fisheries in Africa), and as such consider RCP2.6 and RCP8.5 from the CMIP5 suite of model outputs. § For coastal flooding, the analysis relies on changes in mean sea level, which are only available at the SSP level. Therefore 50th and 80th percentile sea level rise values for SSP2-4.5 and SSP3-7.0 were used, with the results for the 80th percentile under SSP3-7.0 presented in this report as a representative pessimistic case. § For the roads analysis, impacts were evaluated for 55 SSP2–4.5 and SSP3–7.0 climate futures. § The analysis of inland flooding and impacts on bridges relies on data for the peak 1-day precipitation magnitude and frequency, which are only available for SSP ensemble aggregates. Hence these analyses are completed for the 50th percentile of SSP2–4.5 and SSP3–7.0. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 29 Based on the expected magnitude of impacts, this chapter discusses actions that can be taken to improve the islands’ resilience to climate change and situates these actions in the broader policy context of pursuing low-carbon development. The impact modelling considered two different possible development and adaptation scenarios: 1. A current climate change policies scenario assumes that the country experiences climate change in coming decades but does not make investments in adaptation to combat climate impacts. 2. An enhanced adaptation capacities and policies scenario assumes that the country experiences climate change in coming decades and pursues climate resilience in economic growth by investing in suitable proactive climate adaptation interventions. 3.1. Improving the Productivity and Resilience of Agriculture and Fisheries The Comoros’ fertile land and expansive Exclusive Economic Zone provide favorable conditions for agriculture and a rich marine environment for fisheries, with agriculture and fisheries contributing around 36.4 percent of GDP in 2022.48 Figure 7 presents the main crops in terms of area, production and revenues, being coconut, cassava, and banana the most important crops in terms of local production and revenues. Around 70.4 percent of land area is used for agriculture, with cash crops such as ylang-ylang, cloves, and vanilla accounting for 90 percent of all export income.49 Fisheries in Comoros play a significant role in the country’s economy, contributing 7.5% to the GDP and providing direct and indirect employment to approximately 8,500 people, which is about 4.2% of the labor force. Comoros have a large diversity of fish catch species (Figure 8). Despite this, the sector faces numerous challenges. The total fisheries production in 2020 was 13,089 metric tons, which does not meet the national demand, necessitating imports. In addition, the coastal and marine ecosystems are severely degraded due to unsustainable fishing practices, pollution, and climate change impacts.50 Figure 7. Average Crop Areas, Production, and Revenue, 2017–2021 100% 5% 8% 8% 8% 9% 80% 10% 21% 11% MAIZE 20% 14% ROOTS 60% 10% CLOVES 5% CASSAVA 14% 15% RICE BEANS 40% COCONUT 33% 19% BANANA 29% NA 20% 19% 15% 7% 4% 4% 6% 0% AREA (HA) PRODUCTION (TON) REVENUE ($) Source: FAOStat, 2017–202 48 World Bank 2023b. 49 World Bank 2023b. 50 Country Environmental Analysis Investing in Natural Capital for Sustainable Development 30 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 8. Major Fish Catch Species, 1950–2010 25000 KATSUWONUS PELAMIS THUNNUS ALBACARES MARINE FISHES NOT IDENTIFIED 20000 SARDINELLA ENGRAULIDAE THUNNUS OBESUS CARANGIDAE XIPHIAS GLADIUS 15000 CATCH (METRIC TONS) ISTIOPHORUS PLATYPTERUS RASTRELLIGER OTHERS 10000 5000 0 1950 1960 1970 1980 1990 2000 2010 Source: Institute for the Oceans and Fisheries, 2024 gricultural productivity in the Comoros is lower than in many other developing countries with similar agro- climatic conditions due to the use of outdated farming practices, limited availability, high cost of improved inputs (seeds and fertilizer), an unproductive agricultural labor force, and natural resource degradation. Low intra- and inter-island connectivity separates farmers in surplus production areas from growing urban markets, and a lack of infrastructure creates gaps in agricultural value chains. Thus, despite abundant natural resources, the country has not been able to leverage its agricultural and fisheries potential to meet local demand, relying on 41% of food imports. In addition, Comoros remains highly vulnerable to climate disasters, while being one of the least prepared to cope with them. For instance, Cyclone Kenneth destroyed almost 80 percent of farms, including 63 percent of crop plants and 35 percent of cash crops. This resulted in sizeable losses for rural communities especially reliant on agriculture,51 with climate change set to worsen these impacts. Looking at rainfed crops, climate change is anticipated to cause shifts in the rainy season and more erratic rainfall patterns. Crop production on the islands is almost entirely rainfed, with less than 1 percent of arable land being irrigated. The impacts of changing water availability as well as increasing temperatures on rainfed crop production as a result of climate change were evaluated for the islands.52 Figure 9 presents modeled climate impacts for eight major crops under the pessimistic (Dry/Hot) and optimistic (Wet/Warm) scenarios. Overall, all crops evaluated show yield declines due to climate change, with productivity declines 51 UNICEF. (2019). Comoros: Humanitarian Situation Report No #2 - Cyclone Kenneth. 52 To estimate impacts from changing water availability, the methods documented in the Food and Agriculture Organization’s Irrigation and Drainage Paper (Steduto et al. 2012) were applied, in which rainfed crop yields are estimated by applying crop-specific water sensitivity coefficients to the ratio of effective precipitation to potential crop evapotranspiration. For heat stress, the impacts to crop yields from extreme heat were modeled using AquaCrop’s approach (Salman et al. 2021) which considers a negative relationship between supra-optimal temperatures during the flowering stage of crop development. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 31 ranging from around -5 percent on average for cloves, coconut, cassava, and banana, to as much as -15 percent on average by 2050 for maize. Aggregating these crop-specific impacts for the entire rainfed crop sector, crop production shocks are estimated at -7.6 and -7.4 percent by the 2040s under the Dry/Hot and Wet/Warm mean scenarios respectively.53 While Wet/Warm climate scenarios show increased precipitation at an average annual level, the seasonal distribution of these changes still result in negative impacts to crop production, producing similar results to the Dry/Hot scenarios which experience a reduction in annual rainfall overall. Figure 9. Average Annual Change in Rainfed Crop Yields Relative to the Historic Baseline (1995– 2020) due to Changes in Water Availability and Increasing Temperatures from Climate Change 0% -10% -20% BANANA BEANS CASSAVA CLOVES COCONUT MAIZE RICE ROOTS PESSIMISTIC OPTIMISTIC PESSIMISTIC OPTIMISTIC SCENARIO RANGE SCENARIO RANGE SCENARIO RANGE SCENARIO RANGE (I.E., DRY/HOT (I.E., WET/WARM (I.E., DRY/HOT (I.E., WET/WARM GCM RANGE) GCM RANGE) MEAN) MEAN) Source: World Bank calculations The increased frequency and intensity of cyclones and the growing length of the dry season are putting agricultural systems under pressure, with potential negative impacts on food security and rural poverty.54 Agricultural diversification and productivity are a challenge in the Comoros, where the primary sector remains dominated by small-scale, subsistence farming. This contributes to rural poverty and food insecurity, and the country remains highly reliant on food imports and is therefore exposed to macroeconomic shocks and inflationary risks.55 Inflationary pressure caused by the surge in global food and fuel prices have strained the country’s economy since 2021, with further deterioration caused by the Ukraine-Russia conflict,56 seeing local inflation reach 12.5 percent in 2022.57 Climate change is likely to magnify food insecurity and rural poverty, both of which can contribute to political instability. Climate impacts to agricultural productivity are expected to vary by island, meaning that adaptation 53 Shocks presented represent changes in rainfed crop revenues compared to the historical baseline (i.e., 1995–2020) modeled through changes in yields due to changes in water availability and heat stress. 54 The average annual cost of climate change was estimated at $23 million in 2014. African Development Bank. 2022. African Economic Outlook. 55 World Bank. 2022. Comoros Public Expenditure Review. 56 According to the 2022 Public Expenditure Review, “With the subsequent increase in petroleum products on the international markets, the Comorian authorities increased the price of hydrocarbon products up to 44 percent on the local market in May 2022, and electricity tariffs surged by 44 percent as well in 2022.” 57 Economist Intelligence Unit. 2022. Comoros Country Report. Generated November 14th, 2022 32 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS interventions will need to be locally targeted. Figure 10 presents aggregated yield impacts across all rainfed crops by island. Mwali and Ndzuwani, which are responsible for 8 percent and 29 percent of crop revenues respectively, are expected to experience more significant impacts to crop yields than Ngazidja,58 with the bulk of these impacts driven by water shortages during the growing season (versus from increasing temperatures). Differences in the effects between the islands are mostly attributable to the variability of projected monthly precipitation across the islands, as well as some differences in crop distribution. For example, Ngazidja has relatively more bananas and fewer beans compared to the other two islands, and bananas are projected to fare better than beans under climate change. Figure 10. Impacts from Changes in Water Availability and Increasing Temperature on Rainfed Crop Yields by Island for 2041–2050 PESSIMISTIC SCENARIO RANGE (I.E., DRY/HOT GCM RANGE) OPTIMISTIC SCENARIO RANGE (I.E., WET/WARM GCM RANGE) -10% PESSIMISTIC SCENARIO RANGE (I.E., DRY/HOT MEAN) OPTIMISTIC SCENARIO RANGE (I.E., WET/WARM MEAN) NGAZIDJA NDZUWANI MWALI Source: World Bank calculations Proactive adaptation interventions that provide resilience against heat and water impacts are likely to help reduce climate change effects to the agriculture sector. Increased investment in irrigation infrastructure could reduce impacts to rainfed crops considerably. However, the country’s total irrigation potential is currently uncertain: existing data sources estimate the Comoros’ total irrigation potential at 300 hectares with 259 hectares (i.e., 86 percent) already irrigated. This suggests the country has limited opportunity to expand irrigation further.59 Other data sources suggest irrigation potential may be much higher (e.g., up to 1,700 hectares for vegetable crops alone).60 As such, the country lacks reliable data to accurately characterize current irrigation potential. An ambitious, hypothetical adaptation scenario was explored to quantify the magnitude of irrigation expansion that would be required to reverse climate impacts to rainfed agriculture by 2050. Expansion of irrigated hectares to 13,474 hectares by 2050 resulted in rainfed crop production shocks being reduced to almost zero. Interventions of this scale would require not just significant investment (costs are estimated at $65 million in the period from 2021–2050), which may also be found infeasible. 58 FAO 2023. 59 FAO 2023; FAO GAEZ 2010. This estimate of irrigation potential considers available land, water availability, and other economic characteristics of the country. 60 World Bank Group. 2019b. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 33 Social protection interventions that provide grants and training can help productivity and resilience, as well as enhance agricultural outputs. A recent initiative of this kind is the Comoros Safety Nets Project. A beneficiaries’ assessment at the end of the project shows that after two years in operation, more than 87 percent of income generating activities established remained on a good track. Less than 13 percent of beneficiaries experienced risks in their development, and solutions such as technical assistance for cases of livestock diseases were provided through the project. The project has facilitated technical training on agricultural practices, which has connected beneficiary communities to local authorities and non- governmental organizations, with the objective of increasing beneficiaries’ market access. Other interventions aimed at enhancing physical capital and local capacity will also be beneficial in reducing risks to the agriculture sector from climate events. In particular, rehabilitation of rainwater storage systems will help the sector respond to changes in water availability due to climate change. The country’s Strategy of Accelerated Growth and Sustainable Development outlines the installation of a wastewater and rainwater pipeline system.61 The use of climate-smart agriculture technologies and management practices, including drip irrigation, and integrated pest and disease management can improve productivity as well as promote soil conservation and encourage best practices. Finally, efforts to promote local seed production by supporting commercial and community-driven seed multiplication, as well as research and development on improved crop varieties, can reduce farmers’ reliance on imported seeds while also promoting crop varieties that are more resistant to floods and pests. These measures are outlined in the country’s National Action Programme of Adaptation to Climate Change.62 Weak land governance is weak, particularly in rural areas, and hampers implementation of public policies for climate resilience in agriculture. Land governance is characterized by non-existent titling, poor land administration and an unclear land policy, the result of three overlapping land tenure systems – customary, Islamic and colonial. This complex land situation has become a source of dispute and land conflict and complicates the implementation of spatial planning strategies. Much of the land is traditionally held collectively, and the customary law system often takes priority over modern law. For example, land is generally inherited within families according to specific cultural practices, particularly influenced by matrilineal norms on Ngazidja and patrilineal norms on the other islands. This fragmentation makes it difficult to identify legal owners in many cases. With population growth, plot fragmentation and continued dependance on agriculture, the competition to access idling agricultural land (often already owned) leads to conflicts and disputes. Due to high transaction cost for land acquisition (cost of land, payment fees, demarcation), land market activities are mostly verbal contracts for sharecropping, and leasing between farmers in the same village, community, or family. However, experience in countries like Madagascar has shown that full land ownership impacts agricultural productivity more than rented land. Furthermore, land for agriculture is also often in conflict with ecosystem preservation objectives, as current agricultural practices lead to deforestation and soil degradation. Measures such as sustainable agricultural practices, reforestation and integrated natural resource management could strengthen the resilience of the agricultural sector and enable it to coexist with conservation and environmental protection objectives. Land degradation results in a loss of land productivity and reduction of agricultural output, aggravating poverty, food insecurity, and unemployment levels in rural areas. Current agricultural practices remain dominated by slash-and-burn and monoculture cropping, which drive soil degradation and reduce soil quality. An estimated 57 percent of arable land is degraded,63 with coastal areas experiencing the most significant 61 Union of the Comoros. 2018. Estimated costs of these measures total around $4.3 million. 62 Union of the Comoros. 2006. Estimated costs of these measures total around $0.63 million. 63 Bourgoin et al. 2016. 34 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS declines in productive land capacity between 1999 and 2013.64 Land degradation in the Comoros has been accompanied by a progressive expansion of land used for agricultural purposes. To cope with agricultural plot degradation, smallholder farmers are compelled to use additional plots to maintain past harvest levels. Nevertheless, this cropland expansion has not kept up with population growth, resulting in a decline in cropland wealth per capita of around 43 percent between 1995 and 2018.65 Similarly, the degradation of coastal and marine ecosystems negatively impacts fish production and coastal protection. As extreme weather becomes more common, climate change is expected to increase soil erosion, resulting in negative impacts to total crop production as fertile topsoil is eroded. The modeled analysis66 estimated the impact of climate change driven erosion on crop productivity. By the 2040s, increases in topsoil erosion caused by changes in rainfall patterns are projected to drive a -2.3 and -4.2 percent shock to crop production under Dry/ Hot and Wet/Warm futures, respectively. Higher precipitation under the Wet/Warm scenarios, while potentially good for crop growth and development, also adversely affects growth by removing topsoil and washing away nutrients. Adaptation interventions that target topsoil loss will help reduce crop production losses due to erosion. Specifically, the introduction of conservation agriculture practices, including minimum tillage and using crop residues as mulch, can reduce topsoil loss and sheet and rill erosion caused by more intense precipitation driven by climate change. These interventions are assumed to be cost-neutral to farmers since labor and tractor use would decline, though they may increase the need for pesticides or other inputs. These interventions align with goals outlined in the country’s National Action Programme of Adaptation to Climate Change, which identifies a need for restoration of degraded arable land to promote soil productivity, diversified crop production, crop productivity, and food security for the country’s most vulnerable.67 Interventions identified in the Programme include identification of degraded areas, tree planting, and production of fodder crops. These efforts also align with adaptation interventions employed across other small island developing states seeking to limit land degradation. Nature-based solutions suited to the islands’ biophysical environment can be effective and low-cost climate mitigation and adaptation measures to respond to agricultural challenges exacerbated by climate change. Agroforestry techniques such as integrating forestry into farming systems can improve soil fertility, prevent land erosion, and enhance water retention. Integrated pest management is a proven way to reduce reliance on chemical pesticides and promote ecological balance. Conservation agriculture techniques including no- till farming can be applied to limit erosion and improve soil health. In addition, climate-resilient integrated forest landscape management and development will be indispensable in Comoros. Forests are an invaluable resource, providing timber, fuel and non-timber resources. They support agriculture and farming through water and soil regulation, carbon storage, landslide prevention, ecosystem service provision, and habitat provision for flora and fauna, which in turn contribute to food security and nutrition. Forests represent 21 percent of the value of the Comoros’s natural capital per capita in 2018.68 However, forest natural capital per capita declined by 22 percent between 1995 and 2018, and ongoing deforestation and forest degradation continue to impact biodiversity, soil quality, and agriculture productivity. Implementation of an integrated landscape management approach, notably including sustainable forest management, is therefore recommended. 64 European Commission. (2021). Comoros forests | Digital Observatory for Protected Areas Explorer. 65 World Bank (2023). Country Environmental Analysis: Investing in Natural Capital for Sustainable Development. 66 To estimate future erosion rates, the Revised Universal Soil Loss Equation is used, which considers rainfall-runoff erosivity, climate and land factors, as well as activity and farm-level management factors. To translate changes in erosion due to climate change on crop production in the country, a method developed by the Food and Agriculture Organization is used. The approach is based on a tolerable loss rate over time and varies by levels of fertilizer inputs as well as the susceptibility of soils to productivity loss. 67 Union of the Comoros. 2006. 68 Fisheries represent an additional 15.5 percent. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 35 Climate change is also expected to reduce the productivity of the islands’ fisheries sector. Specifically, marine life will be influenced by increasing ocean temperatures, sea level rise, disruptions in dissolved oxygen levels, altered ocean wind and storm patterns, as well as changing currents and ocean circulation. The modeling analysis suggests that without adaptation, by the 2040s climate change may lead to fisheries production impacts of between +0.4 and -10.5 percent under an optimistic scenario and between -8.3 and -12.2 percent under a pessimistic scenario. As shown in Figure 11, these impacts were quantified using two different ecological models69 that estimate climate impacts to fisheries in the form of a percentage shock to the maximum catch potential in the country’s Exclusive Economic Zone from changes in sea surface temperature.70 Figure 11. Shock to Fisheries Output from Climate Change Source: World Bank calculations The estimated climate impacts to fisheries in the country vary substantially across existing studies. While the results presented in Figure 11 suggest significant declines in fisheries output are likely by 2050, research by the Institute for the Oceans and Fisheries, in collaboration with the World Bank, suggests that the country’s Exclusive Economic Zone may in fact experience small increases in maximum capture potential by the 2050s as a result of climate change (Figure 12). However, by the end of the century, this latter study estimates that reductions in maximum catch potential are expected to be more substantial, with catch potential halved under a pessimistic climate scenario (i.e., RCP8.5).71 69 World Bank Group. 2019a. 70 Shocks are calculated relative to a 2015 baseline. 71 Institute for the Oceans and Fisheries. 2024. 36 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 12. Change in Maximum Capture Potential in the Comoros’ Exclusive Economic Zone72 20% 0% -20% RPC 2.6 -40% RPC 4.5 -60% RPC 8.5 -80% -100% 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Source: Institute for the Oceans and Fisheries, 2024 It will be vital to address foundational governance issues to ensure sustainable exploitation of fishery resources and to invest in infrastructure to increase sector productivity. The country will benefit from implementation of sustainable fishing practices and better monitoring mechanisms to assess the health of coastal fisheries and improve the limited adaptability of the sub-sector. The development of scientific and statistical capacity will be critical to assess the health of coastal fisheries and the possibility of redirecting fishing effort to different species depending on climate change-related impacts. Additionally, strategic planning documents have also underscored the need to modernize production and distribution of the sector through updated fishing techniques and infrastructure. Additionally, the establishment of standards and certification could help develop new markets. More widely, to preserve the long-term sustainability of fisheries, other small island developing states have established marine protected areas,73 restored coral reefs and mangroves,74 and improved post-harvesting methods to extend the shelf life of catches.75 Marine protected areas in turn require management plans, the securing of financial resources, and establishment of technical and institutional capacity. Overall, sustainable fisheries management will require a continued focus on developing capacity and ensuring compliance by fishers. 72 Maximum Catch Potential values fluctuated around the mean of the reference period until 2070. However, post-2080, the projections begin to diverge significantly. Under the SSP1-2.6 and SSP2-4.5 scenarios, the mean is projected to remain unchanged. relative to the reference period by the end of the century. In contrast, the SSP5-8.5 scenario predicts a steep decline, plummeting by nearly 60 percent from 2070 to 2080, and then maintaining this reduced level of -60 percent by the year 2100. However, uncertainty in projected changes for SSP5-8.5 is very high for the end of the century due to disagreement in predictions between different models of Geophysical Fluid Dynamics Laboratory model and Institut Pierre-Simon Laplace model. 73 Hagedoorn et al. 2019. 74 Thomas et al. 2020. 75 Bell et al. 2018. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 37 While the 2007 Fisheries and Aquaculture Code provides a good foundation for sustainable fisheries development, there remains room for improvement. The current Code sets operating rules for fishing and aquaculture activities, with a view to ensuring sustainable management of fishery resources. The Code clarifies that fishery resources in waters under Comorian sovereignty or jurisdiction fall within the public domain of the state, and therefore no one may exploit, harvest, use or dispose of them without authorization. Title 2 of the Code regulates the sustainable management of fishery resources, which could include a program for the development of the fishing and aquaculture sector, the management of fisheries, and the exploitation of fishery resources in accordance with a series of established principles.76 The Comoros is in the process of enhancing monitoring, control, and surveillance in the fisheries sector, and is expected to satisfy the conditions laid out in the Code in 2024. The Plan Comores Emergent 2030 has identified the blue economy as one of five strategic areas the country will focus on in the pursuit of structural transformation and implementation of the Sustainable Development Goals. While a strategic framework for the blue economy framework has been developed, it is yet to be operationalized. There are currently no performance indicators or standardized metrics for natural, social and human capital. Developing a system of measurement underpinned by a ‘fit for purpose’ natural capital or ocean accounting framework – connected to the system of national accounts – will be an important step forward and a precondition for meaningful action for blue carbon ecosystems and coral reefs. The country’s National Biodiversity Strategic Action Plan (NBSAP, 2016) can serve as an entry point for monitoring the role of mangroves, seagrasses, and coral reefs in providing nature-based solutions for climate resilience and food security. Agriculture and fisheries are particularly important sources of livelihood for women, meaning that impacts of climate change on these sectors have important gender equity consequences. Nearly a third of women working in agriculture, mostly as small producers and subsistence farmers. Many are also engaged in artisanal fisheries, generally at lower levels of value chains, either as a primary or secondary source of income. Women working in these sectors are particularly vulnerable to climate change as women farmers are generally less able to transition to off-farm work, and have less opportunity to adopt agricultural adaptation strategies as they have more limited access to inputs, information, and resources than men. Women, rural residents and the poor are also more likely to work in the informal sector, which given their lack of capital and limited access to credit, are typically less easily able to recover from the effects of disasters. Significantly, activities headed by women typically have assets that are on average 33 percent lower than activities managed by men. Moreover, women have less access to loans, with only 20 percent of women able to access loans outside the family circle, 4 percentage points less than for their male counterparts. Account ownership, which ensures the security of savings needed during an emergency, is also lower among women: only 29 percent have accounts at a financial institution or with a mobile-money service provider as compared to 40 percent of men. Efforts to enhance human capital and improve labor productivity, particularly in agriculture, will be needed to offset anticipated impacts from heat stress on workers. Overall, modeling results77 suggest that increases in air temperature due to climate change are expected to result in agriculture labor productivity shocks of between -4.8 and -7.3 percent, depending on the climate scenario and the island being considered (left panel of Figure 13). While workers across all sectors will be impacted (the middle and right panels of Figure 13 show the estimated impacts to industry and services workers), agricultural workers will face the most significant shock due to the labor intensive and outdoor nature of their work. Impacts are expected to vary by island, with heat impacts on productivity most severe for Mwali. 76 Among the provisions of this Title are measures to combat illegal, undeclared or unregulated fishing, as well as port state measures. 77 To model labor heat stress impacts due to climate change, workday wet bulb globe temperatures were calculated as a measure of heat stress to derive labor productivity loss curves across three levels of physical activity. For each sector (agriculture, services, and industry), the labor productivity shocks are based on the relative labor hours by occupation within each sector, and the extent to which these occupations are exposed to outdoor work. 38 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 13. Labor Productivity Impact by Island, 2041–2050 AGRICULTURE INDUSTRY SERVICES 1.0% 0.0% PESSIMISTIC SCENARIO RANGE -1.0% (I.E., DRY/HOT GCM RANGE) -2.0% OPTIMISTIC -3.0% SCENARIO RANGE (I.E., WET/WARM GCM RANGE) -4.0% -5.0% PESSIMISTIC SCENARIO RANGE -6.0% (I.E., DRY/HOT MEAN) -7.0% OPTIMISTIC -8.0% SCENARIO RANGE (I.E., WET/WARM MEAN) NGAZIDJA NDZUWANI MWALI NGAZIDJA NDZUWANI MWALI NGAZIDJA NDZUWANI MWALI Source: World Bank calculations Given the country’s substantial agricultural workforce (35 percent of the population), adaptation interventions that increase agricultural mechanization are expected to be particularly beneficial in reducing labor productivity impacts as it will shift vulnerable outdoor workers to other activities. Specifically, modeling results suggest that increasing mechanization from 0 to 15 percent is expected to reduce the productivity shock to the agriculture sector by around a third. Any adaptation strategies that are pursued for the agriculture sector could be implemented with a gender focus to make interventions accessible to female farmers who are particularly reliant on the country’s natural resources for economic opportunity. 3.2. Investing in a Climate-Resilient Infrastructure Network The Comoros’ economic development is hindered by poor infrastructure, including insufficient and deteriorating transport networks, poor waste management systems, and vulnerable coastal infrastructure. While the country has significant untapped growth opportunities, such as tourism and agrobusiness, domestic markets remain highly fragmented, leaving rural communities isolated. Domestic flights are inefficient and often delayed or cancelled due to technical or climatic reasons. Ferries and informal passenger boats remain an option, however, they are highly susceptible to weather conditions, and informal boats can be unsafe. The country’s road network is in poor condition, causing frequent transport disruptions and shortages of goods in remote areas. Climate change threatens to further constrain connectivity and enhance territorial fragmentation, which are binding constraints to economic and political integration across the islands. Increasing natural disasters are likely to further deteriorate the already inadequate and low-quality infrastructure in the Comoros, including roads and ports, which are critical to the country’s connectivity. With sea levels increasing at a rate of 1 to 6 mm per year since 1993 and projected to further increase by 4 mm annually, coastal erosion is anticipated to cause COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 39 damage to approximately 29 percent of roads and strategic infrastructure.78 This will hamper intra- and inter- island connectivity, limiting the efficient and reliable mobility of people and goods, and aggravate the lack of national integration. The Comoros’ poorly maintained road network exacerbates the country’s vulnerability to extreme climate events. The majority of the road network (58 percent) is concentrated in Ngazidja, with Ndzuwani and Mwali housing 30 and 12 percent of the country’s road stock, respectively.79 Only 20 percent of the road network is in good condition, 30 percent is in fair condition, and the remainder is in poor or very poor condition, which makes it highly vulnerable to damage from climate events.80 This is worse than in other countries in the region, including Mauritius, Eswatini, and Lesotho. Road conditions are particularly bad in rural areas, where approximately 35 percent of the rural population does not have access to reliable road networks.81 Coastal erosion is also a source of significant damage to the road network. A lack of alternative routes leaves certain roads exposed to climate and economic risks.82 Overall, road transport infrastructure is crucial in promoting access to employment opportunities, particularly for women and youth. To address concerns of inadequate road infrastructure, the government has established ambitious goals in the Plan Comores Emergent to construct 100 km of new roads and rehabilitate 800 km of existing roads over the next ten years. While available resources are limited, if completed, these projects will serve to better connect urban and rural areas.83 Climate change may impact road infrastructure due to increased temperatures, precipitation, and flooding. The Infrastructure Planning Support System was utilized to estimate impacts to the country’s road infrastructure.84 For roads, the analysis first examined the impacts of climate change in the form of increased repair and maintenance costs incurred as a result of climate damages. In addition, a disruption cost analysis was also conducted to estimate the delay costs of damaged roads requiring repair and maintenance, which in turn result in labor productivity effects. The disruption analysis evaluates the time that each road in the network is estimated to be under repair or out of service as a result of climate change. Figure 14 and Figure 15 shows the average annual repair and maintenance costs and delay hours due to climate change impacts to roads. These impacts represent incremental additional costs caused by climate change-driven damages, as compared to the historic baseline. 78 World Bank. 2023a. Global Environment Facility. 2009. 79 Logistics Cluster 2019. 80 World Bank. 2023. 81 World Bank Group 2020. Many roads are located along the coastline and in flood-prone areas. As a result, about 29, 17, and 23 percent of main roads in Ngazidja, Ndzuwani, and Mwali, respectively, are located in areas vulnerable to pluvial flooding 82 In April 2019, Cyclone Kenneth devastated the country’s road network, including 62 km of primary roads, 16 km of regional roads, and 12 km of rural roads. These accounted for 10 percent of the total road network. 83 Union of the Comoros Ministry of Rural Development, Fisheries, Handicraft, and Environment 2006. 84 The Infrastructure Planning Support System has previously been applied to the Enhancing the Climate Resilience of Africa’s Infrastructure study (Cervigni et al. 2015). 40 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 14. Average Annual Road Costs under a Without Adaptation Baseline and an Adaptation Scenario, 2041–2050 BASELINE ADAPTATION 4 3 SSP3-7.0 25TH-75TH PERCENTILE TOTAL ANUAL COST (USD) SSP2-4.5 25TH-75TH PERCENTILE 2 PESSIMISTIC SCENARIO RANGE (I.E., SSP2-4.5) 1 OPTIMISTIC SCENARIO RANGE (I.E., SSP3-7.0) 0 SSP2-4.5 SSP3-7.0 SSP2-4.5 SSP3-7.0 Source: World Bank calculations Figure 15. Average Annual Road Delay Hours under No-Adaptation Baseline and Adaptation Scenarios, 2041–2050 BASELINE ADAPTATION 0.3 SSP3-7.0 25TH-75TH PERCENTILE TOTAL ANUAL DELAYS (MIL HRS) SSP2-4.5 25TH-75TH PERCENTILE 0.2 PESSIMISTIC SCENARIO RANGE (I.E., SSP2-4.5) OPTIMISTIC 0.1 SCENARIO RANGE (I.E., SSP3-7.0) SSP2-4.5 SSP3-7.0 SSP2-4.5 SSP3-7.0 Source: World Bank calculations This analysis suggests that without adaptation, the Comoros may experience increases in road damages of on average $2.8 million annually under a pessimistic climate future (i.e., SSP3–7.0). Disruptions to road infrastructure from climate change are expected to result in additional annual delays of around 0.27 million hours, resulting in a total labor supply shock of -0.05 percent under a pessimistic climate future. To reduce road damages from increasing temperatures, flooding, and precipitation under climate change, the adaptation scenario assumes proactive climate resilience measures are implemented across the entire road network. Proactive measures means that roads are upgraded to higher standards when they reach COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 41 the end of their life. When considering average annual road damages, these adaptation interventions are sufficient to almost entirely eliminate climate-change driven damages (Figure 14). Even with investment in proactive adaptation measures, some residual road delays are projected to occur under both climate scenarios explored (Figure 15). Looking next at bridge infrastructure, climate change is also expected to degrade existing structures, resulting in increased costs and delays to passengers. As limited data is available to describe the location of existing bridges, the analysis used an artificial bridge geo-dataset that estimated the location of bridges by intersecting roads with waterways. Damages to bridge infrastructure from riverine flooding were estimated using depth-damage functions, from which delays resulting from bridge repairs were derived. Without adaptation, the expected annual damages from inland flooding on bridge infrastructure are anticipated to result in additional damages of $0.45 million by 2050 under a pessimistic future scenario (i.e., SSP3– 7.0), with associated annual labor supply shocks of around -0.07 percent due to bridge delays. Under the adaptation scenario, the impact of improving bridge design standards was evaluated, resulting in incremental damages being nearly halved as compared to without adaptation. Similarly, adaptation reduces the labor supply impacts of bridge delays to -0.03 percent by mid-century, less than half the -0.07 percent projected without adaptation. Recognizing the limitations of its transport network, the government has identified strategies to expand its infrastructure and management capacities in a climate-resilient way. In the country’s Strategy of Accelerated Growth and Development, the government has set forth plans to develop its maritime and port network, expand road infrastructure, and develop its air transport network in an effort to stimulate economic growth and promote economic integration across the islands. With the assistance of the international donor community, and in collaboration with the private sector, Port Boingoma, the primary port on Mwali, is currently under rehabilitation so as to be fully operational regardless of weather conditions. Currently, the port is not operational for around 60 days each year and cannot be approached by large ships or ferries. With additional breakwaters and extended quays (costing $63 million), the reliability and resilience of the port is anticipated to improve. Similarly, Port Moroni, the country’s largest port on Ngazidja, will also be expanded at an estimated cost of $100 million. In parallel, the government is making passenger transport safer and more reliable among the islands, installing landing infrastructure and introducing newer and safer passenger boats. The fuel efficiency per passenger for new, larger boats is 32 percent higher than for the small fishing boats which are currently used. In addition, these developments offer some opportunities to collaborate with the private sector, for instance in port operation and maintenance.85 Beyond roads and bridges, other physical infrastructure is also vulnerable flooding. By 2050, climate change-related impacts from inland flooding may cause additional losses up to 0.12 percent of national capital, which translates to $13.5 million annually in additional damages. To model impacts from inland flooding, flood hazard maps were developed to determine areas with a certain probability of flooding under the historic baseline and under future climate change. The outputs of the flood hazard mapping include the extent and depth of flood inundation, which were then used to estimate damage to infrastructure across the islands. Overall, in the historic baseline, inland flood impacts vary across islands, with the extent of flooding more pronounced on Ngazidja, (Figure 16). However, Ndzuwani and Mwali are expected to see higher increases in flood damages as a result of climate change, with projected impacts to Ndzuwani slightly higher compared to Mwali. These projections can inform climate-resilient infrastructure planning and can serve as a foundation for more detailed sector-specific assessments in the future, evaluating for instance flooding impacts on energy and digital infrastructure, population centers, and points of interests such as schools and health facilities. 85 The ports of Moroni and Mousamudu are currently operated by private operators. 42 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 16. Historical 100-year Floodplain Investment in adaptation measures can reduce inland flooding impacts. Without adaptation, new infrastructure is assumed to be built near existing infrastructure, and there are no efforts to build away from areas located within known floodplains. The adaptation scenario evaluated assumes new infrastructure is built outside of the 20-year historical floodplain and that existing structures that have the highest annual expected flood damages are protected by flood-proofing the first 1 meter of the structure. This adaptation starts in 2025 and the number of buildings protected increases linearly, reaching 0.03 percent of all buildings in the Comoros by 2050. By 2050, under a pessimistic climate future (i.e., SSP3–7.0), these adaptation measures are projected to entirely reverse the additional damages caused by climate change, at an estimated total cost of $31 million between 2025 and 2050. Coastal infrastructure is also at risk as median sea levels are expected to increase by more than 0.20 meters under SSP3–7.0 by 2050. Estimated sea-level rise impacts include both the permanent loss of coastal capital from increases in mean sea level as well as repairable damages from periodic extreme tidal flooding. As shown in Figure 17, sea level rise and storm surge under a pessimistic climate future (i.e., SSP3–7.0, 80th percentile of sea level rise) are projected to increase damages by $22.4 million annually (or around 0.20 percent of capital), with these impacts driven primarily by permanent inundation from sea level rise as opposed to annual repair costs from storm surge that recedes. These impacts are particularly relevant as 88 percent of the population resides in coastal areas and existing flooding and current sea level rise already contributes to salination of the country’s water resources.86 86 World Bank, 2020. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 43 Figure 17. Shocks to National Capital due to Sea Level Rise and Coastal Flooding under a Pessimistic Climate Future (SSP3–7.0, 80th Percentile) 0.2 0.18 PERMANENT LOSS 0.16 ANNUAL REOPAIR COSTS 0.14 0.12 0.1 008 0.06 0.04 0.02 0 2020 2030 2040 2050 Source: World Bank calculations In terms of adaptation to coastal flooding, the impact of pairing flood zone planning with improved infrastructure design standards is anticipated to reduce coastal flooding damages by 70 percent under a pessimistic climate future (i.e., SSP3–7.0), as compared to a baseline without adaptation. These adaptation measures assume that new infrastructure is built above the 100-year tidal flood level that factors in projected sea level rise and that existing structures with the highest annual expected damage are floodproofed up to the first meter. This latter measure only protects structures from periodic extreme tides and storm surges but does not protect against permanent inundation by rising sea levels. Other common adaptation measures among small island developing states include construction of seawalls, among other preventative infrastructure, but these measures can be limited by their financial and technical feasibility.87 Furthermore, their maintenance can prove costly, and beyond 2100, the technical limits of hard protection may be reached given the significant degree of additional sea level rise projected to occur between 2050 and 2100 under higher emissions scenarios (Figure 18).88 87 Thomas et al., 2020. 88 IPCC 2018. 44 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 18. Projected Change in Mean Sea Level Under Different Climate Scenarios 2 SSP5-8.5 MEAN 1.8 CHANGE IN MEAN SEA LEVEL (M) SSP3-7.0 MEAN 1.6 SSP2-4.5 MEAN SSP1-2.6 MEAN 1.4 SSP1-1.9 MEAN 1.2 SSP119 80% CONFIDENCE 1 SSO585 80% CONFIDENCE 0.8 0.6 0.4 0.2 0 2020 2030 2040 2050 2060 2070 2080 2090 2100 Source: World Bank calculations In addition, regulatory frameworks for land use planning will be key to preventing further urban expansion in areas vulnerable to flooding or coastal erosion. In Mutsamudu and Moroni in particular, urban expansion often takes place without regard to storm and flood-resistant construction standards, making communities even more vulnerable to future climate impacts. The introduction of a regulatory framework for land use planning, including no-build areas, and incorporating climate resilience criteria into building standards, are necessary measures to limit this vulnerability. Nature-based solutions in the coastal landscape including mangroves, coral reefs, and seagrasses can also be a cost-efficient solution to increase resilience against coastal flooding and erosion. For example, protection and restoration of mangroves can act as a natural barrier against storm surge and coastal erosion with a lower fiscal burden compared to the traditional concrete seawalls or breakwaters. Approximately 120ha of mangroves are found in the country, with around 75 percent concentrated along the south coast of Mwali, specifically in the Damou and Mapiachingo regions. In addition, approximately 60 percent of the coast of Ngazidja, 80 percent of Ndzuwani’s coast, and 100 percent of Mwali’s coast are occupied by fringing reefs, forming a narrow platform that extends a short distance from the coast, which also offer coastal protection, if effectively managed and conserved. In addition, natural hazards negatively impact the education sector by damaging school infrastructure, with damages likely to increase under climate change. Damage caused by cyclone Kenneth had a direct impact on education, damaging 465 classrooms, which caused interruptions for around 44,800 students. During the COVID-19 pandemic (March 2020 to March 2022), each month of school closures translated to a month of learning losses. The duration of school closures is further prolonged when school infrastructure is used as disaster evacuation centers. Remote learning models can be an important adaptation strategy to ensure continuous learning during school closures. In addition, catch-up programs can address learning losses for the most impacted students. Damage to schools and the subsequent disruption to education has far-reaching implications for the long-term prospects and vulnerability of the population, particularly in the context of small islands where the response capacity of official institutions and governance structures is limited. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 45 3.3. Safeguarding Water Supply in the Face of Growing Demand and a Changing Climate Water is an essential contributor to the Comoros’ economy and livelihoods, with the islands varying in their respective surface and groundwater endowments. All three islands face water availability challenges. Ngazidja’s coastal communities rely heavily on groundwater sources, while rural communities are dependent on limited rainwater harvesting. Many groundwater wells do not produce potable water due to saline groundwater intrusion along the coasts (only 9 of 44 wells explored from 2018 to 2020 produced potable water). In Ndzuwani and Mwali, proven groundwater resources are more limited than on Ngazidja, with water use on these islands characterized by significant reliance on both ground and surface water (Table 2). Surface water availability is hampered by the increasingly seasonal nature of existing rivers, with many no longer reliably flowing year-round.89 In Ndzuwani, 40 permanent rivers have dried up in the last 50 years (World Bank, 2019). Table 2. Estimated Volumes of Renewable Water Resources and their Exploitation Rates by Island Total renewable Renewable surface Renewable Surface water Groundwater Island resources water groundwater resources exploited exploited (billion m3/yr) (billion m3/yr) (billion m3/yr) (percent) (percent) Ngazidja 1.254 0.124 (10 percent) 1.130 (90 percent) 1.9 0.5 Ndzuwani 0.514 0.213 (42 percent) 0.299 (58 percent) 2.3 0.6 Mwali 0.117 0.078 (67 percent) 0.038 (33 percent) 1.2 0.5 Source: Tshimanga 2015 As less than 3 percent of available freshwater resources are currently withdrawn, the country does not appear to face absolute physical scarcity of water. Rather, water availability challenges are driven by irregular rainfall patterns, negative impacts of human activity (e.g. pollution, overexploitation, deforestation), saltwater intrusion in aquifers due to rising sea levels, disputes between villages and municipalities, lack of maintenance of existing water infrastructure, and insufficient funds to expand storage, distribution and other necessary infrastructure. Large-scale storage of water is complicated by the young volcanic soils of the islands, which experience very high rates of infiltration. Erosion of these young fragile soils, especially by extreme climate events such as tropical cyclones, disrupt waterways and increase river sediment loads, further contributing to water scarcity and poor water quality. Future temperature increases will also lead to more evaporation of surface water. Existing water availability challenges are worsened by the periodic occurrence of droughts (Figure 19) and changes to the rainy season. Drought conditions were observed in the late 1990s and early 2000s, leading to water shortages, impacts to the hydrographic network, and threats to agriculture and food production. In addition, the rainy season has become more irregular and has shortened in duration from 6 to around 3 months per year,90 and a potential reduction in dry-season rainfall of up to 47 percent is possible by 2090.91 Such altered precipitation patterns will influence water availability, especially in light of the relatively limited storage infrastructure that currently exists across the islands, with these changes particularly detrimental to the significant portion of the population that relies on small rainwater harvesting tanks for their water supply. Soil degradation, compounded by droughts and changes in precipitation patterns, is consequential for the Comoros, as degraded land has reduced soil water-holding capacity and soil water infiltration, diminishing the amount of groundwater available. 89 Bourgoin et al. 2016. 90 MAPETA. (2021). Contribution Déterminée au Niveau National (CDN actualisée), Rapport de synthèse. 91 UNDP. Climate Change Adaptation. https://www.adaptation-undp.org/projects/ensuring-climate-resilient-water-supplies-comoros- islands#:~:text=United%20Nations%20models%20indicate%20a,the%20Comoros%20is%20a%20challenge. 46 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 19. Drought Risk Profile by Island, Based on Satellite Data Source: SADRI 2019 Surface water availability is anticipated to change as a result of altered precipitation under climate change. Impacts to future surface water supply were evaluated using a rainfall-runoff model92 for 16 basins across the islands under a range of climate futures.93 Of the islands, Ngazidja is projected to experience the smallest change in runoff as a result of climate change by 2050 (-0.1 percent on average, across all climate futures considered) (Table 3). Mwali and Ndzuwani are projected to face more sizeable changes in annual runoff by 2050, with projected increases of +0.9 and +1.7 percent on average, respectively. While these average changes in annual runoff are relatively small, a much more sizeable range is possible when looking at individual climate futures, ranging from -5.4 to +6.4 percent for Ngazidja, -6.2 to +10.5 percent for Mwali, and -7.4 to +10.4 percent for Ndzuwani. 92 The rainfall-runoff model used was CLIRUN. 93 The water analysis considered the historical climate; and 55 climate futures including 29 SSP2-4.5 projections and 26 SSP3-7.0 projections. Historical runoff was estimated using data from HydroAtlas and disaggregated to monthly values using runoff from the GRUN database. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 47 Table 3. Changes in Mean Runoff by Island as a Result of Climate Change Historical Runoff Change in Runoff Change in Runoff Island Basin (1995-2020) (MCM) (MCM/year) (percent) Hamahamet-Mboinkou 26 0.1 (-1.2, 1.6) 0.3% (-4.6%, 6.2%) Hambou 26 0.0 (-1.4, 1.7) 0.0% (-5.5%, 6.7%) Itsandra-Hamanvou 45 0.0 (-2.5, 3.0) 0.0% (-5.5%, 6.7%) Mbadjini Est 41 0.0 (-2.2, 2.8) 0.0% (-5.5%, 6.8%) Ngazidja Mbadjini Ouest 18 0.0 (-1.0, 1.2) 0.0% (-5.5%, 6.7%) Mitsamiouli-Mboude 44 0.2 (-1.9, 2.6) 0.4% (-4.3%, 5.9%) Moroni-Bambao 35 0.0 (-2.0, 2.4) 0.0% (-5.5%, 6.7%) Oichili-Dimani 45 0.0 (-2.5, 3.0) 0.0% (-5.5%, 6.7%) Ngazidja island total 280 -0.4 (-15.2, 17.9) -0.1% (-5.4%, 6.4%) Djando 13 0.1 (-0.8, 1.3) 0.9% (-6.2%, 10.5%) Fomboni 22 0.2 (-1.4, 2.3) 0.9% (-6.2%, 10.5%) Mwali Nioumachioi 18 0.2 (-1.1, 1.9) 0.9% (-6.2%, 10.5%) Mwali Island total 52 0.5 (-3.2, 5.5) 0.9% (-6.2%, 10.5%) Domoni 39 0.7 (-2.9, 4.2) 1.8% (-7.4%, 10.5%) Mremani 15 0.2 (-1.2, 1.6) 1.4% (-8.0%, 10.6%) Ndzuwani Mutsamudu 15 0.3 (-1.0, 1.5) 2.2% (-7.1%, 10.1%) Ouani 10 0.2 (-0.7, 1.0) 2.2% (-7.1% 10.1%) Sima 30 0.7 (-2.2, 3.1) 2.2% (-7.1%, 10.1%) Ndzuwani Island total 110 1.8 (-8.1, 11.4) 1.7% (-7.4%, 10.4%) Note: Changes in runoff show the “median (10th percentile, 90th percentile)” Source: World Bank calculations Future demand for water is anticipated to increase significantly, which may drive a widening supply-demand gap. Currently, national annual water withdrawals are estimated at around 19 million m3.94 On Ngazidja and Ndzuwani, the majority of water withdrawals are for domestic use, followed by agricultural and industrial purposes (Figure 20 and Figure 22). On Mwali, most water withdrawals are for agriculture, followed by domestic and industrial use (Figure 21). By 2050, total annual demand is estimated to increase across all three islands, reaching 8.5, 9.2, and 11.29 MCM/year in Ngazidja, Mwali, and Ndzuwani respectively. This represents a total increase in the national demand of more than 50 percent by 2050.95 94 African Development Bank Group. (2023). “Union Des Comores: Etude Economique et Sectorielle: Profil Sectoriel Eau et Assainissement Des Comores”. 95 Current and future withdrawals are assumed to maintain the same sectoral breakdown. Current population is assumed to be 821 thousand, growing to 1.25 million by 2050 (UN Population Prospects). Projected water demand in 2050 taken from Union des Comores (2002), as reported in SADRI. Industrial and domestic demand were distributed by island using island populations. Agricultural demand was distributed by average Irrigation Water Requirement for each island. 48 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 20. Water Demand Projections by Sector on Figure 21. Water Demand Projections by Sector on Ngazidja Mwali 9.00 10.00 9.00 8.00 Demand (MCM/Year) 8.00 Demand (MCM/Year) 7.00 7.00 6.00 6.00 5.00 5.00 4.00 4.00 3.00 3.00 2.00 2.00 1.00 1.00 - - Historical 2050 Historical 2050 INDUSTRIAL 0.48 0.73 INDUSTRIAL 0.06 0.10 DOMESTIC 4.56 6.96 DOMESTIC 0.62 0.95 AGRICULTURAL 0.53 0.82 AGRICULTURAL 5.36 8.16 INDUSTRIAL DOMESTIC AGRICULTURAL INDUSTRIAL DOMESTIC AGRICULTURAL Source: World Bank calculations Source: World Bank calculations Figure 22. Water Demand Projections by Sector on Ndzuwani 12.00 Demand (MCM/Year) 10.00 8.00 6.00 4.00 2.00 - Historical 2050 INDUSTRIAL 0.41 0.63 DOMESTIC 3.94 6.01 AGRICULTURAL 3.03 4.65 INDUSTRIAL DOMESTIC AGRICULTURAL Source: World Bank calculations Comparing projected future demand with basin-level surface water yields can help identify those basins most in need of additional storage.96 At the island level, total runoff in Ngazidja, Mwali, and Ndzuwani is estimated to be sufficient to meet both current and 2050 demands for water, even in the drier months (Figure 23, Figure 24, and Figure 25), as the dotted demand lines never intersect with the basin yield lines, even with climate change reducing yields under some climate futures. Surface water yields are generally greatest on Ngazidja and lowest on Mwali. Mwali also has projected future demand that comes closest to the surface water yields on the island. 96 This analysis relies on the development of monthly storage-yield curves for each basin. This provides insights about the reliable surface water yield that a certain basin can provide given a certain magnitude of runoff and a certain volume of storage. If basin yields are unable to meet demand, this suggests additional investment in storage infrastructure could be considered. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 49 FIGURE 23 FIGURE 24 Figure 23. Storage-Effective Yield Curve for all Figure 24. Storage-Effective Yield Curve for all Basins on Ngazidja Basins on Mwali 25 3.5 3 20 Basin Yeld (MCM/month) Basin Yeld (MCM/month) 2.5 15 2 10 2050 2050 Historical 1.5 Historical Withdraw (2019) Withdraw (2019) 5 Withdraw (2050) 1 Withdraw (2050) 0.5 0 10 20 30 40 50 60 70 80 90 0 2 6 6 8 10 12 Basin Storage (MCM) Basin Storage (MCM) Source: World Bank calculations Source: World Bank calculations FIGURE 25 Figure 25. Storage-Effective Yield Curve for all Basins on Ndzuwani 12 11 10 Basin Yeld (MCM/month) 9 8 7 6 2050 Historical 5 Withdraw (2019) 4 Withdraw (2050) 3 2 1 0 20 40 60 80 100 Basin Storage (MCM) Source: World Bank calculations However, rapid runoff on Comoros’ steep slopes and high infiltration in volcanic soils likely limits the fraction of runoff that is harvestable to meet demand. Given uncertainty about the fraction of runoff that is actually available for use, the effective yield by basin was assessed assuming different fractions of runoff are harvestable. At the island level, total runoff in Ngazidja becomes insufficient to meet current and projected demands for 2050 (dashed horizontal lines) when less than 20 percent of runoff is available for use (Figure 26), with at least 4 MCM of storage needed to reliably meet future demand. When 10 percent of runoff is assumed harvestable, future basin yields will be unable to meet demand, regardless of how much storage is developed (Figure 27). Work by the United Nations Development Program suggests that available runoff may be even lower than this on Ngazidja, with as much as 95 percent of runoff infiltrating.97 Total runoff in Mwali (Figure 28) and Ndzuwani (Figure 29) are more constrained than on Ngazidja, with runoff becoming insufficient to meet current and projected demands for 2050 when less than 60 and 50 percent of runoff, respectively, are assumed to be available for use. As the fraction of runoff that is harvestable decreases, increasing storage is needed to be able to supply future demand under a changing climate. 97 United Nations Development Program. 2018. Ensuring climate resilient water supplies in the Comoros Islands. https://www.undp. org/sites/g/files/zskgke326/files/migration/km/FP-UNDP-230518-5740-Annex_VI_b-ESMF-EN.pdf 50 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS FIGURE 26 FIGURE 27 Figure 26. Sensitivity Analysis for all Basins on Figure 27. Sensitivity Analysis for all Basins on Ngazidja at 20 Percent of Runoff Harvestable Ngazidja at 10 Percent of Runoff Harvestable 1 0.7 0.6 Basin Yeld (MCM/month) Basin Yeld (MCM/month) 0.8 0.5 0.6 0.4 2050 Historical Withdraw (2019) 0.4 0.3 Withdraw (2050) 2050 Historical Withdraw (2019) 0.2 0.2 Withdraw (2050) 0.1 0 0 0 2 4 6 8 10 12 14 16 18 0 1 2 3 4 5 6 7 8 9 Basin Storage (MCM) Basin Storage (MCM) FIGURE 28 FIGURE 29 Source : World Bank calculations Source : World Bank calculations Figure 28. Sensitivity Analysis for all Basins on Mwali Figure 29. Sensitivity Analysis for all Basins on at 60 Percent of Runoff Harvestable Ndzuwani at 50 Percent of Runoff Harvestable 1.8 3 1.6 2.5 Basin Yeld (MCM/month) Basin Yeld (MCM/month) 1.4 1.2 2050 2 Historical Withdraw (2019) 2050 1 Withdraw (2050) Historical 1.5 0.8 Withdraw (2019) Withdraw (2050) 0.6 1 0.4 0.5 0.2 0 0 0 2 4 6 8 10 12 14 16 0 10 20 30 40 50 Basin Storage (MCM) Basin Storage (MCM) Source: World Bank calculations Source: World Bank calculations On the water supply front, the country lacks protected water intakes and efficient distribution systems, both from an infrastructural and technological standpoint. Water supply service providers are unable to guarantee adequate levels of operation and maintenance of the existing supply infrastructure. In the urban and peri-urban region of Ngazidja, only 34 percent of the total water volume is metered. Water leakage is not well monitored but is estimated to be around 50 percent on Ngazidja and Ndzuwani.98 In addition to limited availability, drinking water in the Comoros is characterized by poor quality. Water storage, both individual or collective, is often unsafe, due to bacterial contamination, proliferation of mosquitoes, and the presence of waste or dust, all of which increase the risk of waterborne diseases, water treatment costs, and the time spent by households to treat drinking water. Water quality-related issues are compounded by the lack of adequate monitoring of chemical and microbiological parameters, with testing limited to once per week and only in a few locations. Furthermore, as clean water sources grow even less abundant, rural women and girls will spend increasing time fetching water and firewood, at the expense of productive activities or education. At present, women and girls spend up to two hours a day fetching water, reducing their time available for work or studies by 25 percent. 98 World Bank 2023e. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 51 Despite sanitation and hygiene advances following the emergence of COVID-19, water, sanitation, and hygiene access is still limited.99 According to the country’s Water and Sanitation Sector Profile, the proportion of the population with access to safely managed drinking water and safely managed sanitation were 30 and 55 percent, respectively, in 2022.100 Access to basic drinking water services was around 80 percent in 2019, which is above the Sub-Saharan African average, but access to basic sanitation services lags behind regional averages and requires significant investment. While access to water is higher in urban than in rural areas, deterioration of supply infrastructure, high population growth, and rapid urbanization hinder drinking water access and exacerbate sanitation challenges. Current drivers of water-borne diseases throughout the country are attributable to many factors, including limited water sources, low quality of drinking water, few sanitation facilities, and poor hygiene practices. All of these factors can be negatively affected by climate-related pressures, including floods, landslides, changing water availability and increasing temperatures. The Comoros already has a high prevalence of diarrheal diseases (17 percent), and periods of high rainfall have historically been followed by increases in diarrheal and other water-borne diseases due to contaminated water supplies and the destruction of water and sanitation systems. For example, following heavy rainfall in April 2024, the country experienced a surge in cases of cholera with a peak of 1,111 new cases between 9-12 May. Mwali and Ndzuwani were most severely affected, as they rely heavily on surface water sources. Increasing temperatures as a result of climate change will drive increased prevalence of water-borne diseases, resulting in negative impacts on human capital and poverty. With bacteriological pollution of household drinking water already a concern, bacterial growth rates are known to increase under higher ambient temperatures. The modeled analysis101 presented below considers changes in water-borne diseases due to increasing temperatures under climate change. Without further investment in water, sanitation, and hygiene, the Comoros is expected to experience a -0.5 percent labor supply shock by 2050 due to increases in water-borne disease (left panel of Figure 30). These climate shocks will exacerbate vulnerability and poverty among the most disadvantaged portions of the population. Climate-resilient development of water infrastructure will be vital for Comoros’ socioeconomic well-being and for the achievement of development targets. Key action areas will include increasing access to water and sanitation by improving the water delivery system as well as developing sanitation infrastructure, improving water quality, and expanding storage infrastructure. Modeling was conducted to evaluate the labor supply benefits of investing in expanded water, sanitation, and hygiene coverage. Specifically, investments that achieve universal water, sanitation, and hygiene coverage by 2050 are expected to result in a labor supply gain of around 2.2 percent by mid-century (right panel of Figure 30), as compared to a decline in labor supply of around -0.5 percent due to climate impacts, if no further investment is pursued (left panel of Figure 30). This goal is in line with the country’s aspirations to achieve Sustainable Development Goal 6 targets, namely, universal and equitable access to safe and adequate drinking water, sanitation, and hygiene for all by 2030.102 However, as realization of this goal by 2030 is unlikely, the modeling analysis assumes a target date of 2050. 99 United Nations 2020. 100 African Development Bank Group 2023. 101 Specifically, the methodology applied by Wolf et al. (2019) is followed, which is based on a statistical relationship between a fecal contamination composite index and the relative risk of diarrheal diseases. The index utilizes a rubric to assign a 0, 1, or 2 value to eight indicators related to water, sanitation, and hygiene access. The resulting relative risks are then calibrated for the Comoros using reported data on mortality and morbidity linked to inadequate water, sanitation, and hygiene infrastructure. 102 Presidence D L’Union Des Comoros. 2020. 52 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 30. Labor Supply Shock from Temperature Increases due to Climate Change on Water-Borne Diseases (left) and from Increased Water, Sanitation, and Hygiene Investments (right) Baseline Adaptation 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 2020 2030 2040 2050 2020 2030 2040 2050 Individual Dry/Hot GCMs Individual Wet/Warm GCMs Dry/Hot mean Wet/Warm mean Source: World Bank calculations In addition, nature-based solutions, including community-led wetland conservation, reforestation, and expanded rainwater harvesting can contribute to adaptation for water supply and quality issues exacerbated by climate change. Wetlands play a crucial role in regulating water supply and quality by supporting biodiversity and providing natural flood control. Wetland conservation can help reduce flooding and improve groundwater recharge on all of the country’s islands. Reforestation increases forest cover, improving groundwater recharge and stabilizing riverbanks. Expanded use of rainwater collection and storage methods can increase the volume of rainwater available for use. Climate-resilient development will need to be accompanied by strengthening of institutions as well as implementing reliable, real-time digital data collection systems to inform decision-making. To date, effective management of water has been hampered by a fragmented and inefficient institutional and legal framework. The 2011 Constitution set out a decentralization process which has seen the devolution of water management to local actors, resulting in a fragmented institutional framework, leading to inefficient outcomes overall. While efforts are underway to strengthen existing frameworks for the water sector, there is room for improvement. In addition, the Comoros has significant information gaps on key indicators for evidence-based decision making, investment decisions, and ultimately sustainable water and sanitation management. This includes data on availability of surface water and groundwater, its physical and chemical quality, and access to drinking water and sanitation services, especially in urban settings. Digital data collection solutions, including GIS, satellite data, and remote sensing technologies, can be used to improve real-time disaster response and information dissemination, following the example of the World Bank’s activities in the Maldives.103 Finally, while not directly related to water management, improvement in the country’s health sector will also be key to limit impacts of water-borne diseases, while the necessary water, sanitation, and hygiene infrastructure investments are being implemented. Some such efforts are already underway with the government updating the El-Maarouf Hospital in Ngazidja, strengthening community healthcare services, and subsidizing treatment for low-income residents as part of a $90 million investment package. 103 https://blogs.worldbank.org/en/endpovertyinsouthasia/maldives-turning-digital-innovations-tackle-climate-change COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 53 Climate-resilient development in the water sector will ideally build on Integrated Water Resources Management principles, to spur the coordinated development and management of water, land, and related resources, which would maximize economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems. This is documented in the country’s Accelerated Growth and Sustainable Development Strategy for 2018–2021, which places significant emphasis on landscape restoration and sustainability-oriented management of basins, as an overall strategy to improve water security in the country within the context of managing the islands’ natural capital. 3.4. Increasing Renewable Energy Generation Capacity The Comoros’ energy sector is vulnerable due to the country’s dependence on imported fossil fuels for electricity generation. The International Renewable Energy Agency estimated that non-renewable energy sources, primarily oil, contributed to 62 percent of the total energy supply in Comoros with only 38 percent from renewable energy sources104. Moreover, the volume of oil and gas imports in Comoros increased by roughly 24.5 percent between 2018 and 2023105 due to the growing demand for fuel. The potential electricity generation capacity on the three islands is estimated to be about 39.6MW, of which only 18.81MW (or 47.5 percent) has been developed, including 6MW of solar energy from Independent Power Producers and 607 kW of hydropower. The current installed capacity does not meet the peak national demand of 26.2 MW, and thermal production represents 95 percent (106 GWh) of electricity generated, with only 5 percent (6.2GWh) from renewable energy. The high cost of service translates into high average end-user electricity tariffs that are still below cost recovery levels. The average end user electricity tariff of $0.43 per kWh does not cover the cost of production estimated at $0.76 per kWh106. This is largely driven by high generation costs due to the country’s dependence on diesel-based thermal generation. As a small archipelago, the Comoros’ access to commodity markets is constrained by limited economies of scale and inherent difficulties in the country’s fuel supply chain. The National Electricity Company of the Comoros, SONELEC’s inability to recover its costs through electricity tariffs has made it dependent on government subsidies. The government allocates an estimated US$ 22 million annually to SONELEC for fuel and budget subsidies, and purchase of equipment such as generators. Yet SONELEC continues to incur substantial supplier and tax debts. SONELEC has high losses due to dilapidated infrastructure, and electricity services continue to be poor despite a relatively high access rate. Cumulative technical and commercial losses are estimated at 31 percent. This is due to a poor information management system, lack of remote monitoring, increased downtime due to localized network overloads, and unavailability of alternative transmission and distribution lines to facilitate routine maintenance. This results in long scheduled or unscheduled outages. Moreover, the absence of institutional frameworks, including an active energy regulatory body, present additional challenges to sector governance. The energy access rate is around 94.7 percent on Ngazidja, 48.8 percent on Ndzuwani, and 86.8 percent on Mwali. Despite a relatively high access rate, electricity services continue to be poor. While the Comoros has a strong potential for renewable energy development, especially solar, these resources remain underdeveloped. Solar photovoltaic and storage systems have tremendous potential to contribute both to reducing SONELEC’s cost of generation and improving the utility’s service quality. Despite this potential, the use of renewable energy is limited to less than 970 kW of (micro-) hydropower installations 104 IRENA. 2024. Comoros: Energy Profile. https://www.irena.org/-/media/Files/IRENA/Agency/Statistics/Statistical_Profiles/Africa/ Comoros_Africa_RE_SP.pdf 105 IMF. 2024. State-Owned Enterprises: Oil and Gas in Comoros. https://doi.org/10.5089/9798400263125.002 106 IMF, 2024. IMF Country Report No. 24/5. Union of the Comoros. 54 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS in Ndzuwani and Mwali, and 6 MW of solar energy developed by two independent power producers. An additional 3MW of solar power are under construction, as are early-stage efforts for long-term development of geothermal energy. The World Bank-financed Comoros Solar Energy Access Project is also supporting the development of an additional 9MW of solar photovoltaic in the country, with battery energy storage systems of 19MWh, to be completed in December 2025. Infrastructure assets, such as electricity generation facilities as well as transmission and distribution lines, are vulnerable to climate hazards, emphasizing the need for resilient electricity infrastructure design. Flooding, landslides, tropical storms,107 and extreme heat are expected to increase due to climate change, increasing the risk of damage to infrastructure. Given this context, it will be key for the Comoros to integrate resilience and adaptation considerations into plans to achieve a low-carbon energy sector. To this end, the government has finalized its Least Cost Development Plan for 2024– 2043, with targets to increase renewable energy (solar, hydroelectricity, and geothermal) to 33MW by 2030 to counter local dependence on fossil fuels. 108 The Karthala Volcano, located on Ngazidja, has been identified as a site for geothermal exploration. While previous surface studies were conducted, lack of technical expertise and high costs of exploration are barriers to developing geothermal projects. The average growth rate of total energy production over the whole Plan is 7.5 percent for Ngazidja, 10 percent for Ndzuwani, and 8.7 percent for Mwali. However, despite the falling costs of renewable energy generation globally, Comoros will need to maintain some fossil fuel-based generation to meet peak demand, as the intermittent nature of renewable energy make them poorly suited to supply base load. Optimization simulations were conducted to identify an optimal production plan for the three islands, balancing future power requirements with maintaining grid stability and resilience (Figure 31). For Ngazidja, the optimal strategy emphasizes the adoption of geothermal energy as a key component of the energy framework, with a phased shift towards solar energy supported by battery storage systems. Additionally, thermal power generation infrastructure would ideally be upgraded to cutting-edge technology that can dynamically align power generation with consumer demand, as well as handle the rapid fluctuations associated with solar energy. For Ndzuwani, the optimal strategy involves a step-by-step integration of solar photovoltaic systems with battery storage, along with an expansion of thermal generation capacity. This includes transitioning thermal plants to utilize bioliquids and/or solid biomass, predominantly sourced from imports, as these technologies mature. In Mwali, the optimal strategy calls for a substantial enhancement of solar installation (accounting for 55 percent of total capacity and 30 percent of energy production), coupled with the deployment of storage solutions. However, thermal generation remains a critical component for both Mwali and Ndzuwani to ensure reliable power supply in the short term to counteract high levels of intermittent power supply. Surplus electricity from renewable energy that may exceed fifty percent of the demand at any given time would need to be either stored or capped to avoid constraints on the power system. Upgrading electricity transmission infrastructure will be crucial to bolstering investments in production. In Ngazidja, it is advisable to replace existing conductors, strengthen the 20 kV network, construct seven new 63/20 kV substations, and establish a 63 kV transmission network to enhance electricity transmission efficiency, maintain consistent voltage across the island, and minimize losses. In Ndzuwani, the transmission network will ideally be improved with new conductors, a 63 kV transmission network, and the establishment of new 63/20 kV substations at key locations. For Mwali, the current electrical transport system is deemed sufficient for the island’s consumption. Division into two feeders would facilitate efficient distribution of electricity. Construction of a 63 kV transmission network is not considered necessary, as relatively low peak consumption is projected in both the short and long term. 107 Cyclone Kenneth in 2019 caused significant damage to SONELEC’s infrastructure, with the recovery budget estimated at approximately $3.5 million. The implications of an energy transition for resilience require further study. 108 Comoros NDC Registry. United Nations Framework Convention on Climate Change. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 55 Figure 31. Optimal Deployment of Energy Produced under the Least Cost Development Plan NGAZIDJA 500 450 400 350 Gwh GAP 300 FUTURE DIESEL EXISTING DIESEL 250 FUTURE HFO SOLAR 200 FUTURE GEOTHERMAL 150 DEMAND 100 50 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 NDZUWANI 250 200 Gwh 150 GAP RENEWABLE 100 FUTURE DIESEL EXISTING DIESEL TRATINGA 50 LINGONI MARAHANI DEMAND 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 MWALI 40 35 30 25 Gwh GAP 20 FUTURE DIESEL EXISTING DIESEL 15 SOLAR DEMAND 10 5 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Source: World Bank calculations 56 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS The implementation of the Least Cost Development Plan in the Comoros requires an estimated investment of $902 million between 2024-2043.109 Total electricity generation costs are projected at $822 million between 2024-2043, with electricity generation reaching 4,520 GWh, and the average cost of 18.2 cents per kWh. Over this period, transmission costs are estimated at $80 million, with electricity demand forecasted at 4,295 GWh, resulting in a levelized transmission and distribution cost of 1.9 cents per kWh.110 Increasing the share of renewable energy in the energy mix could reduce the average cost of electricity generation, currently at 35 cent USD/kWh, thereby decreasing government transfers to SONELEC. The projected CO2 emissions linked to power generation under the Least Cost Development Plan are estimated to be 1,148 tons of CO2 for Ngazidja, which is roughly 197 gCO2eq/kWh based on anticipated demand. For Ndzuwani, the emissions are estimated at 1,018 tons of CO2, or 448 gCO2eq/kWh, and for Mwali, emissions are around 221 tons of CO2, or 526 gCO2eq/kWh. Despite the Comoros’ significant renewable energy potential, several barriers hinder its deployment. Currently, the country has only two 3MW solar plus battery energy storage systems operated by Independent Power Producers (IPPs): one in Ngazidja by Innovent, and another in Ndzuwani by Vigor. While these projects signal initial private sector involvement, their high tariffs are unsustainable, stemming from limited competition among IPPs, risks associated with SONELEC’s weak financial position, and the lack of robust institutional and regulatory framework to attract new investors. In addition, utilities lack the resources to invest in new generation capacity due to recurrent technical and commercial losses.111 To overcome these challenges, the Comoros could explore cost-effective renewable energy alternatives like geothermal energy, prioritizing transmission and distribution infrastructure upgrades to facilitate renewable integration, and address capacity gaps in specific skillsets and knowledge required for the Comoros to scale up renewables. Additionally, the expansion of renewable generation will ideally go hand-in-hand with a phasing out of fossil fuel subsidies, with price subsidies on petroleum products representing 2.5 percent of the GDP in 2022112, and SONELEC receiving the highest share of the subsidies. Furthermore, exemption from domestic tax resulting in tax subsidies represent close to 1 percent of the GDP.113 A detailed options analysis of phasing out fossil fuel subsidies in the Comoros would ideally be conducted in the future. Such an analysis would address issues on how future reductions in fossil fuel subsidies will affect the economics of renewable energy, help identify feasible pathways for reforming fossil fuel subsidies, and discuss options of compensation to households, especially low-income and vulnerable households. The transition to low-carbon development in Comoros is a long-term objective that could bring tangible benefits, notably by reducing dependence on imported fossil fuels. By reducing fossil fuel imports, this transition could improve the balance of trade by alleviating financial pressures due to energy import costs, thereby freeing up national resources for local climate actions. If this transition were accompanied by the promotion of renewable energies, this would not only help to reduce greenhouse gas emissions, but also create local economic opportunities. However, given the economic context and urgent climate resilience challenges, this change could not be an immediate priority. Nevertheless, a phased approach to renewable energy deployment could be considered, in parallel with building community resilience, by maximizing the leverage effect of international funding and energy transition programs. So, while the immediate focus remains on resilience and disaster response, long-term strategic planning towards low-carbon development would be beneficial for the country’s financial and environmental sustainability. 109 For 2024-2030, the Least Cost Development Plan estimates US$ 318 million of investment will be needed, with total capacity reaching 110 MW, including 48 MW photovoltaic solar with battery energy storage, 15MW of geothermal, and 47MW of thermal. 110 Costs were calculated using a 6 percent discount rate, and generation and transmission costs do not consider the costs associated with new infrastructure and network upgrades. 111 AfDB, 2018. Comoros Power Sector Master Plan. 112 IMF, 2024. State-Owned Enterprises: Oil and Gas in Comoros. https://doi.org/10.5089/9798400263125.002 113 IMF, 2024. State-Owned Enterprises: Oil and Gas in Comoros. https://doi.org/10.5089/9798400263125.002 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 57 58 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS © Sachiko Kondo 4. Macro-fiscal Considerations for Climate Change: Steering the Economy towards Resilient Growth 4.1. Macro-Fiscal Modeling and Development Scenarios The impacts of climate change on the economy are analyzed in this chapter through the Comoros Climate Change Macro-Fiscal Model (CC-MFMod). The macroeconomic modeling conducted focuses on analyzing the impact of climate change and adaptation policies on economic and poverty outcomes, considering the real, fiscal, and external sectors. Two development scenarios were examined in the macroeconomic modeling. Under the “no-reform” scenario, no major reform is implemented, and the economy grows along its former or business-as-usual trajectory. In the alternative “reform” scenario, the Comoros implements reforms which boost GDP growth and realize more inclusive growth according to their development plans and strategies. Neither of these two development scenarios directly incorporate impacts of climate change or adaptation policies, with these effects layered on to these development scenarios through eight individual channels of climate impact, described in Chapter 4.2. The no-reform scenario (Business-as-usual or BAU) is based on the country’s historical growth performance. In this scenario, productivity remains low or negative, labor force participation remains below 50 percent, and private investment is limited as the business environment does not improve. In addition, the Comoros is not able to enhance its domestic resource mobilization. As a result, GDP growth averages 3.2 percentage points between 2025 and 2050—just above the population growth rate—and GDP per capita is projected to grow by an average of 1.5 percent during the same period. GDP per capita would reach $1,891 by 2050 and the poverty rate would reach about 27 percent by 2050. The reform scenario (REC) provides a pathway that allows the country to get closer to the aspirations laid out in the Plan Comores Emergent, the national development strategy. This scenario assumes that the necessary reforms are implemented, and private investment increases substantially. Furthermore, it is assumed that the Comoros increases its capacity to mobilize domestic resources. The creation of such fiscal space provides an opportunity to finance new investments while access to concessional financing could lower the investment cost. Under this scenario, it is assumed that the Comoros starts its economic transformation with a decline in the share of agriculture value added to the GDP, the expansion of fisheries and tourism activities, and an increase in productivity. As a result, GDP growth averages 4.6 percentage points between 2025 and 2050, and GDP per capita grows by 2.9 percent annually. Under this development path, the poverty rate is projected to be about 13 percent by 2050. Changing the Comoros’ development trajectory requires action in three key areas: unlocking private investment, strengthening institutions, and enhancing economic resilience. Unlocking private investment includes improvement of the business environment, enhancement of financial intermediation with the aim of improving access to credit, attracting foreign direct investment inflows, and designing and implementing pro-competition regulations for state-owned enterprises and private firms. Strengthening institutions includes enhancing the accountability framework for senior public officials to foster program results, improving public expenditure efficiency, implementing regulations and mechanisms to ensure consistent funding for tourism development and regular access to market-intelligent data, developing domestic capabilities to assess fisheries resources, and implementing commitments under World Trade Organization agreements. Enhancing economic resilience is related to the need to invest in basic services and waste management infrastructure, increase human capital, sustainably manage natural resources or restore ecosystems and biodiversity, and increase financial inclusion. An essential element of enhancing economic resilience is improved fiscal management, particularly enhanced domestic resource mobilization and public debt management and policy.114 114 For additional policy options to support economic transformation, refer to World Bank (2023). Country Economic Memorandum: Boosting Growth for Greater Opportunities. Washington DC: World Bank. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 59 4.2. Assessing the Impacts of Climate Change and Climate Adaptation on the Economy The effects of climate change are evaluated through different channels of climate impact, which are layered on to the no reform and reform development scenarios described above. The impact channels evaluated cover four thematic categories: § Human health and development: These channels focus on the impact of climate-related shocks on labor productivity and labor supply. The first channel assesses the negative impact of increasing temperatures on workers’ ability to do work and hence on labor productivity. The second assesses how increases in temperature affect the incidence and mortality of water-borne diseases and how investments in water, sanitation, and hygiene infrastructure can limit these impacts to labor supply. § Water, agriculture, and land: This category of channels focuses on the climate change impact of crop production through changes in yields or topsoil erosion. Crop production is based on crop-specific yield response functions which are determined by water availability and heat stress. Changes in rainfall affect topsoil erosion (erosivity) which in turn affects crop production. § Infrastructure: Climate change can result in infrastructure deterioration through an increase in the frequency, intensity, duration, and scale of extreme events, which can result in inland flooding, sea level rise, and asset damage, including to roads and bridges. These damages cand increase infrastructure repair and maintenance costs, as well as cause labor supply effects from delays. § Natural capital: Climate change is likely to impact natural marine capital and associated fish production, with this channel estimating changes in maximum catch potential from ocean temperature increases. Modeling outcomes demonstrate that reform implementation measures will somewhat lower the magnitude of climate impacts as compared to a scenario without reforms, but residual impacts remain significant by mid-century. Without adaptation, under BAU, average annual changes to GDP and household consumption per capita range between -4.8 and -6.6 percent by the 2040s, with larger impacts under the Dry/Hot climate (pessimistic) scenario (left panel of Figure 32). Poverty rates would increase by up to 5.4 percentage points under the Dry/Hot climate scenario without adaptation and reform measures (left panel of Figure 33). Without adaptation, the Reform (REC) scenario shows average annual changes to GDP and household consumption per capita of between -4.3 and -5.8 percent by the 2040s, a more limited impact than under BAU (right panel of Figure 32). With only development reform measures, poverty in Comoros is projected to increase by about 2.7 percentage points by 2050 under the pessimistic climate scenario (right panel of Figure 33). A comparison between the BAU and REC scenarios suggests that development reforms can help the Comoros to be more resilient to the impact of climate change, but recurrent and more frequent climate impacts by 2050 remain sizeable even under REC, especially under a most pessimistic Dry/Hot climate future. The different impact channels vary in their relative contribution to the total economic losses (Figure 34). Across both BAU and REC, the most sizeable economic losses from climate change are projected to occur from declines in labor productivity due to heat stress (the labor heat stress impact channel), and from a decline in agricultural productivity (the crop yield and soil erosion channels). 60 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 32. Current Climate Change Policies: Annual Average Changes from BAU and REC Scenario Baselines BAU REC 0.0 0.0 -1.0 -1.0 -1.1 -1.1 -1.0 -1.0 -2.0 -1.7 -2.0 -1.6 -1.6 -1.7 -3.0 -3.0 -2.7 -2.7 -3.1 -3.2 -4.0 -4.0 -3.7 -3.6 -4.1 -4.3 -4.4 -4.3 -5.0 -4.8 -5.0 -5.1 -6.0 -6.0 -5.7 -5.8 -6.3 -7.0 -6.6 -7.0 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S Dry and hot Wet and warm Dry and hot Wet and warm Real GDP Household Consumption per Capita Real GDP Household Consumption per Capita Source: World Bank projections Figure 33. Current Climate Change Policies: Poverty Rate Changes from BAU and REC Scenario Baselines BAU REC 6.0 4.0 5.4 3.6 3.5 5.0 4.6 4.1 3.0 2.7 4.0 2.4 2.5 3.1 2.2 1.9 3.0 2.0 2.2 1.5 1.5 2.0 1.7 1.0 1.0 0.5 0.0 0.0 2030 2040 2050 2030 2040 2050 Dry and hot Wet and warm Dry and hot Wet and warm Source: World Bank projections Figure 34. Current Climate Change Policies: Cumulative Economic Losses due to Climate Change by Impact Channel Dry/Hot climate scenario Wet/Warm climate scenario 22 20 17 15 12 10 7 5 2 0 2024-30 2024-30 2031-40 2031-40 2041-50 2041-50 2024-30 2024-30 2031-40 2031-40 2041-50 2041-50 BAU REFORM BAU REFORM BAU REFORM -3 BAU REFORM BAU REFORM BAU REFORM Crop Yield Soil Erosion Crop Yield Soil Erosion Fishery Labor Heat Stress Fishery Labor Heat Stress Flooding Coastal Flooding Flooding Coastal Flooding Wash Wash Source: World Bank projections COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 61 As discussed in Chapter 3, adaptation measures can help to substantially reduce the impact of climate change on the Comorian economy. As shown on Figure 32 above, without further investment in adaptation, the impact of climate change on GDP by the 2040s is estimated to be -6.6 percent under BAU and -5.8 percent under REC for the pessimistic Dry/Hot climate future. Investment in adaptation measures sees this loss reduced to -2.8 percent under BAU and to -2.1 percent under REC by the 2040s under the pessimistic Dry/Hot climate future (Figure 35). Under the optimistic Wet/Warm climate scenario, adaptation measures help to limit the GDP loss to -1.2 percent under BAU and -0.8 percent under REC. Poverty rate increases are limited to between 0.5 and 1.1 percentage points by 2050 as a result of implementing reform and adaptation measures as compared to a baseline without such interventions (Figure 36). While adaptation limits climate change impacts, some residual economic losses are still anticipated, with the greatest proportion of losses again projected to occur from declines in labor productivity due to heat stress, and from declines in agricultural productivity (Figure 37). Figure 35. Enhanced Adaptation Capacity and Policies to Climate Change: Annual Average Changes from BAU and REC Scenario Baselines BAU REC 0.0 0.0 -0.5 -0.5 -0.7 -0.7 -0.6 -0.7 -1.0 -0.7 -0.8 -0.8 -1.1 -1.1 -1.0 -0.8 -1.2 -1.5 -1.3 -1.2 -1.3 -1.3 -1.3 -1.5 -2.0 -1.7 -1.7 -2.1 -2.1 -2.5 -2.0 -2.1 -2.2 -2.8 -2.7 -3.0 -2.5 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S 2024-2030 2030S 2040S Dry and hot Wet and warm Dry and hot Wet and warm Real GDP Household Consumption per Capita Real GDP Household Consumption per Capita Source: World Bank projections Figure 36. Enhanced Adaptation Capacity and Policies to Climate Change: Poverty Rate Changes from BAU and REC Scenario Baselines BAU REC 2.5 2.3 1.6 1.5 2.2 1.4 1.4 2.0 1.2 1.1 1.5 1.5 1.4 1.0 1.0 1.1 0.8 1.0 0.7 1.0 0.6 0.5 0.4 0.5 0.2 0.0 0.0 2030 2040 2050 2030 2040 2050 Dry and hot Wet and warm Dry and hot Wet and warm Source: World Bank projections 62 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS Figure 37. Enhanced Adaptation Capacity and Policies: Cumulative Economic Losses due to Climate Change by Impact Channel Dry/Hot climate scenario Wet/Warm climate scenario 20 12 15 10 7 5 2 0 2024-30 2024-30 2031-40 2031-40 2041-50 2041-50 2024-30 2024-30 2031-40 2031-40 2041-50 2041-50 BAU REFORM BAU REFORM BAU REFORM -3 BAU REFORM BAU REFORM BAU REFORM Crop Yield Soil Erosion Fishery Crop Yield Soil Erosion Fishery Labor Heat Stress Flooding Coastal Floading Labor Heat Stress Flooding Coastal Floading Source: World Bank projections Note: The losses are cumulated by decade over the periods 2023-30, 2031-40, and 2041-50 and shown as percent of GDP in 2022, average GDP during the 2030s, and average GDP during the 2040s respectively. A discount rate of 6 percent was used to discount future losses. 4.3. Macro-Fiscal Considerations in Managing Climate Change Impact With adaptation to climate change having a potential cost of over $100 million over the next 25 years, public debt may increase by up to 4 percent of GDP, and a macro-fiscal reform agenda would be necessary to maintain macroeconomic stability (Figure 38). Even with the implementation of such reforms, public debt could still increase by 2.9 percent of GDP by 2050. In addition, as of 2024, Comoros has limited fiscal space due to low domestic resource mobilization, fiscal rigidity, and a high risk of debt distress. This will require innovative approaches to financing adaptation, including through enhanced domestic resource mobilization including creating fiscal space and integrating environmental aspects in public financial management; increased private sector participation by enabling private sector development; financing and managing climate change risks; addressing residual risks; and mobilizing concessional financing. However, building government capacity to implement the underpinning solutions is essential in increasing the country’s resilience to climate change. Figure 38. Enhanced Adaptation Capacity and Policies: Change in Public Debt from BAU and REC Scenario Baselines (Percentage of GDP) 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2024-2030 2030S 2040S 2024-2030 2030S 2040S Wet and Warm Dry and Hot BAU REC Source: World Bank projections COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 63 The Comoros’ fiscal space is narrow, characterized by low tax revenues, a high risk of debt distress, and poor performance of state-owned enterprises, and expanding the fiscal space will be needed to realize greening of public financial management. The Comoros’ capacity to provide public services and goods is constrained by its limited fiscal space which mirrors its low tax revenues, averaging 8 percent of GDP in 2020–23, in comparison to the required minimum level of 12.8 percent. Low tax revenues are driven by weaknesses in the tax administration related to integrity of the registered taxpayer base, risk management, voluntary compliance, timely filling of tax declarations, accurate reporting declarations, revenue management, accountability and transparency. As a result, the efficiency of different tax instruments is low. Given existing tax instruments, Comoros could explore options for generating carbon-based revenues. Furthermore, poorly performing state-owned enterprises both receive subsidies and weigh on tax revenues as these firms are partially exempted from tax payments, and they face revenue collection issues. Finally, with public debt at high risk of debt distress, the Comoros can only use concessional financing to fund development projects. Integrating public procurement in budget execution and improving cash-flow management could generate fiscal savings while additional public financial management reforms could increase public spending efficiency. Despite the enactment of a new procurement law in 2023 which provides for the digitalization of public procurement, there is a need to strengthen public procurement and to better integrate this function in budget execution. An e-government procurement platform is being finalized, and its deployment could help improve public expenditure efficiency. In addition, enhanced public investment management could generate fiscal savings by mainstreaming climate change in project selection and improving project execution to reduce cost overruns.115 Furthermore, public investment management, for instance through the Comoros Public Investment Program (2016–2020), could better integrate climate change measures. The absence of climate change considerations and screening of risks in project selection highlights shortcomings in infrastructure investment processes. This oversight could lead to higher costs and reduced effectiveness in addressing climate-related challenges. Similar climate change consideration could also be extended to the maintenance of public assets. There are opportunities to integrate climate change into public financial management processes, and to advance green budgeting, budget tagging, or green procurement. Such an approach would entail assessing the suitability and feasibility of available green public financial management tools and preparing them throughout the budget cycle. For instance, the government could prepare green planning documents, climate-sensitive macroeconomic frameworks, circular green budgeting, green spending reviews or monitoring of climate change expenditures, and ex-post green audits. Budget tagging and green procurement are considered well suited to low-income countries and help attract international funding. Budget tagging enables governments to track and allocate funds specifically for climate-sensitive interventions. Green procurement incentivizes the adoption of environmentally friendly products and services, aiding in the decarbonization of public operations and infrastructure. The private sector has a critical role in financing the Comoros’ transition to a more sustainable and climate-resilient economy. Given the limited fiscal space for public investment, private sector engagement will be essential for adaptation efforts. The successful implementation of these strategies will require not just new investment, but also coordination and execution of effective policies and regulations to stimulate private sector development.116 Those policies include raising awareness on climate risks and opportunities, improving the overall investment climate, developing a national adaptation investment plan, implementing climate-oriented regulatory reforms (including through an adequate public-private partnership framework), and providing incentives for private sector investment that support its green transition goals.117 115 Factors such as the existence of substantial financing gaps at project inception which affect project implementation, or weaknesses in project design have contributed to the occurrence of cost overruns, in addition to exogenous factors such as the COVID-19 pandemic or inflationary shocks in 2022. 116 https://www.greenclimate.fund/document/support-union-comoros-increase-access-climate-finance-under-green-climate-fund-gcf. 117 https://www.un.org/africarenewal/magazine/march-2023/comoros-has-huge-untapped-investment-potential. 64 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 65 © Tim Kelly 5. Financing Climate Transition in Comoros 5.1. Key Sources of Climate Finance for Comoros The financial sector in the Comoros is developing yet vulnerable, with significant participation from microfinance and remittance. The financial system comprises nine financial institutions of which four commercial banks, and four microfinance institutions, as well as a government-owned financial institution, the Société Nationale des Postes et des Services Financiers. While the sector is being restructured, the government remains the main shareholder in two commercial banks and less than half of financial institutions meet the prudential ratio. The largest financial entity is a microfinance institution whose total outstanding loans account for more than a third of the credit to the economy. Given the large share of remittance from Comorian diaspora to the country (13 percent of GDP), international money transfer agencies (e.g., Western Union) operate in Comoros and act indirectly through partnerships with banks or licensed microfinance networks. These agencies are complemented by a local money transfer and exchange entity, the Maison Comorienne de Transfert des Valeurs and two mobile money operators. The financial sector provided credit to the private sector equivalent to only 18 percent of GDP, with many non-performing loans and high exposure to state-owned enterprises. Domestic financial institutions are yet to introduce climate-finance related instruments. There is no domestic T-Bills market, and the current regulatory framework does not allow formal issuance of Treasury bonds. The lack of long-term resources for banks also constrains their ability to finance long-term investments. Currently, none of the financial institutions in the country issue any climate finance related instruments. In addition, the insurance sector is unregulated and underdeveloped with only six companies with activities primarily limited to vehicle insurance and travel insurance policies operating in the informal sector. At present, the majority of climate finance and green growth funding comes from the public sector and is primarily allocated to adaptation. Between 2019 and 2020, Comoros leveraged up to $163 million per year (almost 12 percent of GDP), 96 percent of which came from the public sector. 68.2 percent of climate funds received are in the form of grants, while 25.3 percent are debt-financed projects, in concessional terms, and only 4 percent comes from the private sector. Public sector financing comes from multilateral financial institutions (69 percent of the total) including the World Bank, 20 percent bilateral funding, 9 percent government funding and 2 percent from climate funds. The country’s NDC estimates that between 2020-2030, the need for climate finance will total around $1.7 billion, with an average cost of $154 million per year, of which 53 percent is for mitigation, 24 percent for adaptation, and 23 percent for loss and damages. It is likely that a lack of data combined with limited local technical expertise on how to calculate adaptation costs result in these values being an underestimate of the true costs of adaptation. To begin to meet this financing need, the Comoros has mobilized several concessional financing programs with development partners to support green and blue programs for environmental resilience, as well as projects aimed at conserving island ecosystems and inclusive territorial institutional governance integrating climate issues. One such example is the World Bank’s Regional Climate Resilience Project for Eastern and Southern Africa, which will promote multisectoral climate governance and crowding in of climate financing from different resources. The Comoros may also benefit from capitalizing on regional-level technical assistance to strengthen its capacity to access financing for mitigation and adaptation mechanism, for example accessing funds from Global Public Goods, or benefit from carbon market opportunities. 66 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS While the country has yet to mobilize private sector financing to complement public financing, public-private partnerships can play a crucial role in financing climate action in the Comoros by maximizing limited public resources, mobilizing private capital, expertise and innovation, and unlocking climate finance.118 They can also provide well-informed and well-balanced risk allocation between public and private stakeholders, offering long-term visibility and stability for the duration of a contract. This contractual predictability can compensate for the uncertainty of climate change. Establishing an appropriate public-private partnership framework is critical to attract private investments in key sectors exposed to climate-related risks. Furthermore, while the Plan Comores Emergent has identified priority sectors (e.g., agriculture, tourism, and fisheries) and key catalysts (e.g., energy, transport, central administration, and information communication technology connectivity) (Table 4), the country does not have a green growth strategy. This constitutes another obstacle to the mobilization of financing for green growth and climate action by the private sector, alongside the lack of basic infrastructure, weak technical, human and institutional capacity, the small size of the domestic market and disruptions caused by recent external shocks. While hampered by a lack of sectoral data, 23 percent of climate finance is allocated to the energy sector119, mainly for renewable energies, particularly solar, with the transport sector receiving 14 percent and agriculture, forestry, fisheries and other land use financing accounts receive only 8 percent of the total formal financing, noting that most agriculture, fisheries, and forestry activities are informal. A range of green growth and climate related activities that can pave the way for increased private sector investment are described in Table 4 below. Table 4. Opportunities for Private Sector Involvement120 FOCUS OPPORTUNITIES FOR PRIVATE SECTOR INVOLVEMENT Developing tourism will embrace all tourism segments, including ecotourism. Sustainable blue economy projects will be pursued in sectors such as aquaculture, coastal tourism, Elevating Comoros to biotechnology, marine energy, etc. Priority projects identified so far include: the rank of a tourist § the development of an ecotourism zone around the Nioumachioua Park in Mwali and destination in the development of tourism around Karthala and the coelacanth Indian Ocean Area and § niche promotion projects based on products for which the country has comparative promoting blue economy advantages such as seafood, essential oils (cloves, ylang-ylang), and natural cosmetics projects § climate shield projects which involve measures to enhance, preserve, restore and improve coverage and representativeness of biodiversity and ensuring sustainable management of protected areas. Comoros is striving to be energy independent by expanding renewable energy generation, Supporting Comoros including solar energy, hydroelectric and geothermal energy, with this initiative promoting energy circle private sector investment in renewable energy technologies and incentivizing industries to adopt green technologies.121 The country aims to connect all the primary ports on the three islands to facilitate free Uniting the Comoros circulation of passengers and goods in safer conditions, at lower prices and more regular islands by sea frequencies. This project will help facilitate the implementation of other green growth projects and attract private investment. 118 World Bank. 2021. Unlocking Private Investment in Climate Adaptation and Resilience. https://www.worldbank.org/en/news/ feature/2021/03/04/unlocking-private-investment-in-climate-adaptation-and-resilience. 119 Climate Policy Initiative, 2022. The State of Climate Finance in Africa: Climate Finance Needs of Africa Countries. 120 All of the focus areas discussed here, with the exception of those focusing on the water sector, are taken from the Plan Comores Emergent. 121 https://ppp.worldbank.org/public-private-partnership/climate-smart-ppps-further-reading-and-resources. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 67 FOCUS OPPORTUNITIES FOR PRIVATE SECTOR INVOLVEMENT The ambition of making Moroni a digital administrative district will reduce its carbon footprint by concentrating administrative services in one place and reducing transport operations. Increasing efficiency of information sharing through increased communication and whole-of-government approach enabled by advanced real-time data collection, sharing Developing Moroni into a and analytics, will in turn increase inter-departmental collaboration in the government financial smart city and for greater efficiency of the public administration and better services for individuals and digital administrative businesses. Moreover, the Moroni “financial smart city” project aims at making Moroni district a hub for Arab private investment in Africa and the leading platform for finance in Africa. This financial center will cover a wide range of financial services, including cross-border investment services, international banking, management services for individual’s cross- border assets, as well as services for international fintech insurance companies. Promoting agri-business This will involve improving productivity by reorganizing rural production, promoting irrigation, including value chain using improved inputs and mechanization, strengthening of agribusiness and fisheries development value chain, and improving agriculture and blue finance. This can be done through § rehabilitating and extending distribution networks to reduce water losses, improve efficiency and guarantee sustainable access to drinking water for populations whose initiatives create opportunities for private investment under public-private partnerships § setting up rainwater collection and reuse systems, as well as wastewater treatment and management infrastructure, and promote the reuse of wastewater in the agricultural sector where investments in innovative collection technologies, can be co-financed by companies specializing in water infrastructure § developing desalination plants using renewable energies, such as solar energy, to Bridging the financing guarantee a sustainable source of fresh water, particularly for coastal areas. Private gap in the water sector investors may find this an opportunity to combine desalination technology with green energy solutions § investing in the protection and management of catchment areas to prevent erosion, limit flooding and recharge groundwater. This includes the restoration of wetlands and forests, which are essential for the regeneration of water resources, with opportunities for private sector investment in reforestation and ecological conservation § promoting the installation of efficient irrigation systems (such as drip irrigation) and agricultural water management technologies to optimize water use. Private investment can be mobilized as part of agritech solutions and technical services for farmers. 5.2. Managing Climate-Related Financial Risks The financial sector’s exposure to climate risk is significant, both from physical risks as well as transition risks associated with the process of transitioning to a lower-carbon economy. In terms of physical risks, the financial impact of climate change in the Comoros is driven by damage from weather and climate events, with the country one of the most exposed to physical risk in the world (i.e., storms, floods, sea level rise, volcanic eruptions, cyclones etc.). While the main transmission channel of these physical risks is through agriculture (35 percent of total employment),122 there is no data to assess the exposure of financial institutions to physical risk - this could be limited as much of the agricultural sector is subsistence farming with no access to financial services. Transitioning to a lower-carbon economy may also pose transitions risks, especially in light of the country’s current reliance on imported fossil fuels and the stated greenhouse gas reduction target of 84 percent by 2030. While there is no sectoral data to assess the exposure of financial institutions to this transition risk, the likely risk transmission channels include direct impacts to the national petroleum product importer, impacts to the national utility company (SONELEC), and high dependency on imports (55 percent of basic needs), with the state-owned rice enterprise, ONICOR, contributing to the increased level of non-performing loans, exacerbating financial instability. 122 International Labour Organization. “ILO modelled estimates database” ILOSTAT. www.ilostat.ilo.org/data 68 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS The Comoros has started to embark on a journey of financial preparedness to climate shocks that could be sustained and integrated into a national development policy. While the country has recently subscribed to tropical cyclone insurance, it currently has no other instruments to respond to shocks. Moreover, the Comoros is part of the World Bank initiative, Regional Emergency Preparedness and Access to Inclusive Recovery (REPAIR),123 which seeks to provide countries with a comprehensive menu of prearranged financial instruments to respond quickly to disasters. This regional instrument will provide access to reserves for moderate shocks and contingent credit for severe shocks, so the country does not have to resort to extreme budget measures. It will also build the preparedness of country systems to respond to disasters and increase the opportunity to access peer-to-peer learning. Utilizing such a regional platform to respond to both financial and operational shocks will help the Comoros access better catastrophe insurance through risk pools, and benefit from appropriate guarantees, a more diversified portfolio, and stronger governance. For the Comoros, REPAIR is linked to country distribution channels such as the National Resilience Fund and the Social Security Project. A national fund for strengthening financial resilience would provide the Comorian government with a sustained financing instrument to support disaster management actions. The World Bank and other development partners are supporting the government in setting up such a National Resilience Fund, which will be available to respond to emergencies, thereby overcoming the difficulties of lack or speed of mobilization of funds. The fund will help in financing of immediate preparedness, response and actions to strengthen the Comoros’ resilience in the event of disasters as defined by the national contingency plan. Through the National Resilience Fund, the government will centralize all funding that can be quickly mobilized to respond to emergencies attributed to natural hazards. The institutional framework of the National Resilience Fund is yet to be defined, which could allow flexibility and accountability. While still under discussion, the current proposal puts the National Resilience Fund as a sub-account of the Treasury Single Account, namely a Special Purpose Account (Compte d’ Affectation Speciale). The fund is attached to the General Directorate of Civil Security, the entity in charge of emergency preparedness and response, and is governed by public expenditures procurement. 5.3. Insurance, Risk Management Products, and Diaspora While the Comoros is ranked 163 out of 191 countries in terms of its vulnerability and adaptation capacity index, the country currently has few insurance and risk management products.124 The country has registered 39 major incidents between 1980-2022, cumulatively affecting 839,721 individuals, accounting for 944 deaths. The insurance market is quasi-nonexistent with only six companies whose primary activities are limited to vehicle insurance and travel insurance policies, with these products used on an ad-hoc basis. While new products are emerging thanks to the support of development partners, there is no sustainable risk financing policy. Through the African Development Bank, Comoros has subscribed to parametric insurance against flooding with African Risk Capacity and with the support of the World Bank, the country benefits from the parametric insurance portion under the REPAIR framework as part of the risk financing program that is offered to the country. The United Nations Development Program is also developing inclusive insurance, which requires an appropriate regulatory framework, and the implementation of a financial literacy program focused on the insurance market. Comorian diaspora helps to overcome market and government failures at the community level and play a crucial role in managing risks for communities. The Comoros receives transfers totaling almost 13 percent of GDP from its diaspora. This diaspora not only serves as a safety net during catastrophes but plays an 123 REPAIR will be managed by a regional African financial institution, African Risk Capacity, to lower the cost of mobilizing disaster risk finance for countries, increase the volume available with private capital, and strengthen country systems to respond quickly to climate shocks. 124 Notre Dame Global Adaptation Index, 2022. The NDD-GAIN Matrix: Comoros. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 69 important role in supporting local communities and villages’ economic and social activities. These dynamics at the community level are, however, not well quantified as most transfers are not captured by the formal financial sector. Almost every Comorian household has a family member abroad, sending transfers to the family, which can help them adapt and mitigate existing risks. Remittances are typically used for small damage repair, local consumption, paying electricity bills and education. That said, there are well-organized communities of diaspora that finance local infrastructure such as community roads, school construction, healthcare, dams, dikes, farming activities, informal commerce, rural electrification, and water supply. 5.4. Leveraging Carbon Markets and Climate Finance Opportunities The Comoros has a promising opportunity to secure funding through carbon markets. The country has declared its intention to become a carbon sink, reducing its net CO2 emissions125 by 23 percent and increasing its net CO2 absorption by 47 percent by 2030. Achieving these targets could enable the country to access international mechanisms for trading carbon credits. The government has defined near-term mitigation measures including (i) Consolidation of the electricity network; (ii) Improvements in waste collection; (iii) Reduction of firewood and industrial wood by promoting alternative energy sources and protecting forests; (iv) Reduction of residential firewood consumption using efficient wood stoves; (v) Promotion of composting of organic waste. Medium- and long-term mitigation priorities include: (i) Continuation of photovoltaic power plant development projects; (ii) Launch of geothermal use; (iii) Afforestation, reforestation, agroforestry and arboriculture; (iv) Increased effective management of protected areas. A preliminary assessment of the Comoros’ readiness for carbon market participation revealed some important gaps. The Comoros is still in the process of developing a carbon framework that enables access to carbon finance at scale, and such a legal framework is required to bring carbon credits to the market. Through the Regional Climate Resilience Project for Eastern and Southern Africa initiative, the World Bank has undertaken an assessment of the country’s sectoral potential and attractiveness for carbon projects.126 Comoros readiness is characterized as low, including limited knowledge of the market, the lack of an institutional framework, as well as the lack of expertise to assess the country’s potential.127 The Comoros’s experience in carbon markets to date is limited to the energy sector.128 While safety net instruments are well-established and operational, their main constraint is the availability of financing to increase coverage of the programs. The Comoros spends around 0.7 percent of its GDP on safety nets, compared to an average of 0.9 percent of GDP for all low-income countries, and 1.3 percent of GDP for fragile African states.129 Safety nets are predominantly financed from external sources, largely the World Bank. In the face of climate change, other global sources of uncertainty, and frequent recent shocks to the country, the Comoros would benefit from strengthening its ability to mobilize financing to address future shocks that can derail economic growth and poverty reduction. Social protection systems could be able to respond to current and future risks, reducing the need for humanitarian responses. As such, there is a need to develop a sustainable social protection financing strategy that promotes increased domestic financing, donor harmonization, and contingency financing in support of a shock-responsive social protection system. In addition, the Comoros is in the early stages of exploring finance options for blue carbon ecosystems – mainly linked to valorization of coastal fisheries and revenue generation through fisheries and aquaculture. Potential models for revenue activation for the protection and restoration of blue carbon ecosystems are 125 Comoros’ greenhouse gas profile shows the following breakdown of emissions: energy (9 percent), agriculture (28 percent), and land use, land use change, and forestry (63 percent). 126 Participating countries are Mozambique, Malawi, Madagascar, Comoros, and South Sudan. 127 Neyen, Capril. 2024. 128 Neven, 2024. 129 ASPIRE, 2018. 70 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS expanding, with these leveraging both existing channels (e.g., fisheries sales, fees) as well as emerging channels (e.g., nature markets like blue carbon and biodiversity). Significant capacity and know-how are needed to trial these revenue opportunities through nature markets. To date, efforts to build carbon accounting capacity are limited to a forestry pilot in Mwali National Park.130 Financial instruments such as blended finance and conservation trust fund have potential to unlock blue financing in the Comoros. Blended finance is a strategy gaining traction among impact investors, private finance, and government. It involves the strategic use of philanthropy, development assistance and government investment to attract private capital for sustainable development. It combines capital with different levels of risk to catalyze risk-adjusted, market-rate-seeking capital into investments that deliver environmental, social, and governance impacts. It can support activities at different scales and levels of profitability, scale up piloted projects, finance start-ups and projects at different stages of investment and deploy the capital using other instruments (debt, patient equity, guarantees/first loss, technical assistance, risk underwriting etc.). There are numerous platforms for investment in the blue economy using blended finance approaches as a preferred model for raising capital, including the Sustainable Ocean Fund managed by Mirova, the Meloy Fund for Sustainable Community Fisheries and the Global Fund for Coral Reefs. Establishing a Conservation Trust Fund can provide a systematic method for channeling financial resources into environmental initiatives and protected areas, focusing on the conservation and sustainable management of coastal and marine ecosystems. As part of the National Parks Strategy approved in 2017, the government established a trust fund with the objective of raising funds for the new national parks planned for marine and coastal areas. However, the fund is not yet functional and dialogue on a possible collaboration with the Foundation for Protected Areas and Biodiversity of Madagascar131 has not progressed. Platforms for increasing investment readiness for scaling up multi-species mariculture, or securing carbon / biodiversity revenue are needed, with a focus on early-stage investment alongside capability building and technical support in community-based projects. 5.5. Policy Recommendations for Financing the Comoros’ Climate Transition Increasing awareness and capacity for both financial sector authorities and industry are essential to develop a green finance agenda and expand climate change adaptation mechanisms. Survey data has revealed that none of the banks and microfinance institutions in the Comoros, even those with foreign participation, has developed any financial instrument related to green finance. Moreover, the government’s exposure through the energy, oil, and rice sectors increases the risk of contingent liability which makes the entire system more fragile. From the institutional side, the Ministry of Finance, Budget, and Banking has started to integrate climate risk in its governance, strategy, risk management and operations by creating a special unit in charge of climate change, adaptation and mitigation at the General Directorate of Budgets. However, the Central Bank of the Comoros, which supervises banks and microfinance institutions, has not yet integrated climate risk in its strategy, nor in formulating financial and monetary policies. The Central Bank has no assessment or monitoring of exposure to climate risk across financial institutions and has no supervisory guidelines or dialogue with the financial industry. Insurance is limited, and the country is not a member of any international networks from which it could benefit, including the Network for Greening the Financial System, or the Sustainable Banking and Finance Network. 130 Personal communication, Mousa Ben Anthoy, Mohéli National Park. 131 The Foundation for Protected Areas and Biodiversity of Madagascar is a trust fund dedicated to the conservation of Madagascar’s biodiversity. COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 71 The Comoros could adopt a framework that merges climate change risk categories (physical risk, transition risk, and liability risk) with the risk categories commonly assessed by financial markets (market risk, credit risk, liquidity risk, and operational risk).132 This would involve understanding and measuring climate- related risks, promoting their transparent disclosure by financial institutions, and strengthening frameworks for their forecasting and analysis.133 The country could also explore the potential of insurance mechanisms to manage disaster risks. This could include parametric (index) insurance, which provides payouts not based on actual loss but on the occurrence of a triggering event (like a cyclone reaching a certain category). The Comoros could explore debt-for-nature swaps with its creditors, potentially freeing up resources for climate resilience and adaptation efforts.134 Debt-for-nature swaps involve reducing a country’s debt burden in exchange for the country making commitments to environmental conservation. A coordinated mechanism will be needed to implement and coordinate a climate finance agenda, as well as sector policy and financing. Climate finance policy is complex and requires strong coordination. While the Ministry of Finance, Budget, and Banking has created a climate and resilience unit under the General Directorate of Budgets, a coordinating mechanism is currently virtually non-existent. Such a coordinating mechanism could be institutionally well anchored by both public and private entities, which requires strong links with individual sectors, as well as a keen assessment of which aspects of public financing can be complemented by private financing. Taking the energy sector as an example, a coordination mechanism could assess and establish the connection between improvement of the power utility’s performance and private sector participation in promoting renewable energy development, thereby supporting the energy sector to identify financing gaps and opportunities. The coordination mechanism can also identify and help to eliminate any barriers that limit private sector participation, for instance by enhancing the creditworthiness of off-takers and mitigating off-taker risks. Finally, financing the Comoros’ climate transition will rely on the country having a strong commitment to improved governance and public financial management systems to mobilize private sector financing in key sectors. An accountability mechanism that demonstrates good use of public funding through good governance and efficient public finance management will increase private sector confidence to mobilize financing for key sectors. Transparency and efficiency in public operations and policies will increase the appetite for private financing for priority sectors such as energy and water, and provide a foundation for raising, coordinating and implementing private sources of finance and private sector investments. 132 https://www.chicagofed.org/publications/chicago-fed-letter/2020/448 133 https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2024/02/12/Preparing-Financial-Sectors-for-a- Green-Future-Managing-Risks-and-Securing-Sustainable-540602 134 https://www.theguardian.com/environment/2023/jun/21/are-debt-for-nature-swaps-way-forward-for-conservation-aoe 72 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 73 © Steve Loris Gui-Diby 6. The Way Forward: Prioritized Policy Packages and Financing Action A wide array of investments, policy reforms, and other interventions are needed in the Comoros to strengthen resilience to meet development goals in the face of challenges from climate change. The analysis presented in this report shows climate change may have significant implications for development in various sectors in the country. It is thus critical to identify and prioritize the needed interventions, particularly given the country’s fiscal constraints. Table 6 below presents proposed priority measures in an Action Plan that covers four focus areas: 1. Improve the Productivity and Resilience of Agriculture and Fisheries to expand and enhance the productivity of these sectors, supporting livelihoods and food security in the face of uncertain future climate conditions. 2. Invest in a Climate-Resilient Infrastructure Network that both serves the needs of the people and economy, and is resilient to the uncertain impacts of climate change, be they from sea level rise, storm surge, flooding, increasing precipitation, or more frequent extreme events. 3. Safeguard Water Supply in the face of Growing Demand and a Changing Climate to achieve safe and reliable access to water resources, including the need for sustainable resource use in the face of a changing climate that may reduce water quantity and quality. 4. Increase Renewable Energy Generation Capacity to become more energy self-sufficient, meet the country’s NDCs and mitigate climate related impacts. Table 5. Action Plan of Priority Actions for Resilient, Low-Carbon Development in the Comoros PRIORITY ACTIONS BENEFITS URGENCY FOCUS AREA 1: IMPROVE THE PRODUCTIVITY AND RESILIENCE OF AGRICULTURE AND FISHERIES Irrigation / Knowledge: Enhance agricultural resilience by assessing irrigation potential, Growth ++ improving data accuracy, and prioritizing cost-effective irrigation expansion. With Mitigation Medium term estimates suggesting irrigation potential beyond current 259 hectares, a reliable Adaptation assessment could guide effective, climate-adaptive investment. +++ Irrigation / Investment: Enhance physical capital by rehabilitating agricultural infrastructure, especially water harvesting and storage infrastructure in support of Growth +++ irrigated agriculture. Rehabilitating and expanding rainwater harvesting and storage Mitigation Medium term systems to address climate-driven water scarcity will support irrigation expansion. Adaptation A wastewater and rainwater pipeline system, as outlined in the national strategy, is +++ estimated to cost $4.3 million. Nature-Based Solutions / Investment: Apply a broader blue economy approach and incorporate nature-based solutions to promote sustainable and inclusive economic growth. Adopting such an approach can foster sustainable growth by enhancing soil, Growth + water recharge, and coastal resilience. Interventions such as contouring, tree planting, Mitigation + Medium term and coastal restoration support agriculture, fisheries, and erosion control, while climate- Adaptation ++ smart agriculture practices can further conserve soil and mitigate crop losses in the face of extreme weather. Agriculture / Investment: Enhance climate-smart agriculture, agricultural knowledge and innovation. Enhancing climate-smart agriculture and farmer capacity can improve Growth + productivity, resilience, and food security. Agroecology, including intercropping, Mitigation Long term agroforestry, and natural farming, supports carbon sequestration, ecosystem Adaptation + conservation, and climate adaptation. Developing local seed production and resilient crop varieties will reduce import reliance and strengthen climate resilience of crops. 74 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS PRIORITY ACTIONS BENEFITS URGENCY Fisheries / Institutions: Improve climate resilience in the fisheries sector through governance reforms, and by exploring alternative livelihoods and economic activities including coastal ecotourism. To promote sustainable fisheries, enhanced scientific Growth +++ capacity will be needed, as well development of Monitoring, Control, and Surveillance Mitigation Short term to ensure compliance with sustainable practices. With the Fisheries Transparency Adaptation ++ Initiative underway, Comoros can build on experiences from other small island states by establishing marine protected areas, restoring coral reefs, and improving post-harvest methods. Fisheries / Investment: Improve the country’s fisheries sector through expanded supply- chain infrastructure. Investing in fisheries infrastructure, standards, and certification Growth +++ can enhance productivity and open new markets, while modernizing production and Mitigation Short term distribution will strengthen the sector’s resilience. A comprehensive “blue economy” Adaptation ++ approach, integrating renewable energy and transport infrastructure, supports sustainable growth while safeguarding ocean health. Social Protection / Institution: Enhance economic inclusion and community resilience by promoting climate-sensitive food systems and green jobs. Existing social protection Growth + systems can be leveraged to align policies and foster cross-sectoral collaboration Mitigation +++ Long term between agriculture and the labor market. By promoting climate-sensitive food systems Adaptation + and green jobs, the country can support vulnerable households in transitioning to greener sectors while preserving natural resources and addressing gender disparities. Finance / Institutions: Improve the enabling environment for agriculture and agribusiness development. To unlock agriculture’s potential for job creation and Growth ++ investment, the government could consider simplifying regulations for inputs, finance, Mitigation Medium term and market access, and implementing its existing food law to enhance food safety and Adaptation competitiveness. FOCUS AREA 2: INVEST IN A CLIMATE-RESILIENT INFRASTRUCTURE NETWORK Roads / Investment: Increase investment in climate resilient infrastructure and measures to reduce vulnerability including prioritizing the maintenance of key national Growth +++ roads and relocating vulnerable assets. A comprehensive national road program that Mitigation + Short term consolidates resources and focuses on sustainable investment, will require an estimated Adaptation $17.5 million per year, and will help mobilize both internal and external resources more +++ effectively. Roads / Institution: Fully operationalize the Road Fund. Confirm the Road Fund’s managerial and financial autonomy by ensuring a full transfer of the fuel levy collected Growth ++ and adjusting the fixed-amount fuel levy transfer mechanism to account for inflation and Mitigation ++ Short term actual fuel consumption. This will enable a more predictable revenue stream, allowing Adaptation for the implementation of a holistic road asset management approach that prioritizes +++ climate resilience and network connectivity. Early Warning System / Knowledge: Enhance climate resilience in infrastructure management by creating climate services for effective early warning systems. Growth + Establishing a robust early warning system will reduce vulnerability and enhance Mitigation disaster response capabilities by improving contingency planning, deploying a national Medium term Adaptation control room, and developing local action plans for preparedness. This system could +++ integrate and disseminate climate data across ministries, ensuring effective decision- making for climate-related emergencies and long-term planning. Port and Airport / Investment: Enhance adaptive capacity through improved inter-island Growth + and mainland Africa connectivity by climate-smart transportation network expansion. Mitigation Medium term This approach will strengthen the adaptive capacity of the population and economy Adaptation against climate disruptions, supporting the country’s development goals. +++ COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS 75 PRIORITY ACTIONS BENEFITS URGENCY Coastal Management / Institution: Strengthen implementation and management of nature-based solutions by setting clear guidelines and standards for projects that Growth promote soil health, groundwater recharge, and coastal protection while ensuring Mitigation +++ Short term coordination of efforts across sectors. Together, these can contribute to climate Adaptation ++ resilience goals and biodiversity targets. Coastal Management / Investment: Support traditional grey infrastructure services with coastal nature-based solutions, including protecting and restoring blue carbon Growth + ecosystems like mangroves, seagrasses, and coral reefs, which can enhance coastal Mitigation Medium term resilience and reduce the need for expensive infrastructure. These measures will help Adaptation protect coastlines from storms and erosion while increasing carbon sequestration and +++ supporting livelihoods and economic development. Coastal Management / Knowledge: Develop a monitoring and evaluation framework to Growth + quantify the benefits of nature-based solutions that, when integrated with governance, Mitigation Medium term would enable policymakers to measure impacts on groundwater recharge rates, soil Adaptation quality, and coastal resilience, providing data to guide future investments and policies. +++ Education / Investment: Develop education infrastructure that is resilient against climate shocks. Reconstruction of damaged schools could be prioritized rehabilitating affected Growth ++ infrastructure and securing land for climate- resilient construction. Implementing Mitigation +++ Short term disaster-resistant building methods and maintaining health infrastructure, particularly Adaptation + WASH facilities, will create resilient learning environments that safeguard the future of Comorian students. Health / Investment: Strengthen climate-resilient health systems and infrastructure. Growth +++ Developing and enforcing climate-resilient norms for healthcare and water, sanitation, Mitigation + Short term and hygiene infrastructure while retrofitting existing facilities to mitigate the impact of Adaptation climate risks on health will contribute to climate-resilient health systems. +++ FOCUS AREA 3: SAFEGUARD WATER SUPPLY IN THE FACE OF GROWING DEMAND AND A CHANGING CLIMATE Water Supply / Investment: Increase investments in water supply, storage, and distribution to ensure a secure water supply amidst climate change risks. This includes Growth +++ rehabilitating the aging water network in Moroni and addressing water insecurity in Mitigation Medium term rural areas by supporting diverse uses such as drinking water, agriculture, fishing, and Adaptation ++ hydropower. Water Quality / Investment: Improve water quality by enhancing water quality control, expanding water, sanitation, and hygiene programs, and improving environmental Growth +++ protection measures. This will require constructing and equipping new laboratory Mitigation Short term facilities for regular water quality analyses in collaboration with health authorities, Adaptation ++ including a laboratory under the Institut National de Recherche pour l’Agriculture, la Pêche et l’Environnement. Water Resources Management / Institution: Develop water masterplans at the island Growth +++ level, incorporating principles of Integrated Water Resources Management and building Mitigation + Short term on the SCA2D action plan. This will help identify and prioritize investments for resilient Adaptation drinking water supply and water resource development across the three islands. +++ Health / Knowledge: Strengthen health strategies and enhance health personnel Growth + capacity by training health personnel on climate-related health risks including water- Mitigation borne disease, developing contingency plans for health facilities, and creating a Medium term Adaptation dedicated budget line for climate adaptation activities. This will ensure sustained focus +++ and resources for improving health outcomes in the face of climate change. 76 COUNTRY CLIMATE AND DEVELOPMENT REPORT COMOROS PRIORITY ACTIONS BENEFITS URGENCY Health / Knowledge: Strengthen disease surveillance and detection capabilities by establishing a national multi-hazard early warning system that integrates existing Growth + disease surveillance systems and enhances resource allocation. Improving the Mitigation Medium term connection between climate data and health decision-making processes, along with Adaptation fostering multi-sectoral collaboration and a strategic risk communication plan, will +++ enhance preparedness and response to health risks. FOCUS AREA 4: INCREASE RENEWABLE ENERGY GENERATION CAPACITY Renewable Energy Generation / Investment: Expand renewable energy generation in the country, in line with achieving the country’s Least Cost Development Plan. Transitioning Growth +++ from fossil fuels to renewable energy sources will enhance climate resilience and reduce Mitigation +++ Medium term dependence on costly imports, while leveraging international partnerships for funding Adaptation + and capacity building. Renewable Energy Generation / Institution: Implement the transition plan by strengthening institutional roles. Establishing a dedicated technical and financial committee under the Growth ++ Ministry of Energy will ensure effective monitoring and implementation of the transition Mitigation ++ Short term plan, strengthen regulatory frameworks, and foster domestic innovation in clean energy Adaptation + technologies. Electricity Tariff / Institution: Conduct electricity tariff reforms. Prioritizing electricity tariff reform will help address high energy subsidies, improve affordability, and ensure Growth ++ the reliability of service, while focusing on vulnerable households and small/medium Mitigation ++ Medium term enterprises. Conducting a detailed assessment of electricity generation costs and Adaptation engaging key stakeholders in consultations will be essential for creating consensus and successfully implementing the necessary tariff changes. Finance / Institution: Improve the legal and regulatory framework governing the energy sector. Updating the legal and regulatory framework will ensure cost-effective integration and foster transparency and competition in the electricity sector. Implementing Growth ++ regulations under the recently approved renewable energy law and developing an Mitigation ++ Long term Independent Power Producer framework with standardized power purchase agreements Adaptation will attract both domestic and foreign investors, encouraging private sector participation in renewable energy projects. Electricity Cost / Knowledge: Develop a national energy sector strategy. Development of Growth ++ a well-coordinated energy strategy, supported by a shared vision among key stakeholders Mitigation ++ Short term will be crucial to promote the expansion of lowest-cost electricity in a way that is mindful Adaptation of local conditions and constraints, as well as being sustainable and equitable. 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