SOUTHASIA MALDIVES WOrldBankGrOup June2024 ©2024TheWorldBankGroup 1818HStreetNW,Washington,DC20433 Telephone:202-473-1000;Internet:www.worldbank.org ThisworkisaproductofthestaffoftheInternationalBankforReconstructionandDevelopment(IBRD),theInternationalDevelopmentAssociation(IDA),theInternationalFinanceCorporation(IFC),andtheMultilateralInvestmentGuaranteeAgency(MIGA),collectivelyknownasTheWorldBank,withexternalcontributors. TheWorldBankdoesnotguaranteetheaccuracy,reliability,orcompletenessofthecontentincludedinthiswork,ortheconclusionsorjudgmentsdescribedherein,andacceptsnoresponsibilityorliabilityforanyomissionsorerrors(including,withoutlimitation,typographicalerrors,andtechnicalerrors)inthecontentwhatsoeverorforreliancethereon.Theboundaries,colors,denominations,links/footnotes,andotherinformationshowninthisworkdonotimplyanyjudgmentonthepartofanyoftheorganizationsofTheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries.ThecitationofworksauthoredbyothersdoesnotmeanTheWorldBankendorsestheviewsexpressedbythoseauthorsorthecontentoftheirworks.Thefindings,interpretations,andconclusionsexpressedinthisvolumedonotnecessarilyreflecttheviewsofIBRD/IDA,IFCandMIGA,theirrespectiveBoardsofExecutiveDirectors,andthegovernmentstheyrepresent. Thecontentsofthisworkareintendedforgeneralinformationalpurposesonlyandarenotintendedtoconstitutelegal,securities,orinvestmentadvice,anopinionregardingtheappropriatenessofanyinvestment,orasolicitationofanytype.SomeoftheorganizationsofTheWorldBankortheiraffiliatesmayhaveaninvestmentin,provideotheradviceorservicesto,orotherwisehaveafinancialinterestin,certainofthecompaniesandpartiesnamedherein. NothinghereinshallconstituteorbeconstruedorconsideredtobealimitationuponorwaiveroftheprivilegesandimmunitiesofanyofIBRD/IDA,IFCandMIGA,allofwhicharespecificallyreserved. RightsandPermissions Thematerialinthisworkissubjecttocopyright.BecauseTheWorldBankGroupencouragesdisseminationofitsknowledge,thisworkmaybereproduced,inwholeorinpart,fornoncommercialpurposesaslongasfullattributiontothisworkisgivenandallfurtherpermissionsthatmayberequiredforsuchuse(asnotedherein)areacquired.TheWorldBankGroupdoesnotwarrantthatthecontentcontainedinthisworkwillnotinfringeontherightsofthirdparties,andacceptsnoresponsibilityorliabilityinthisregard.AllqueriesonrightsandlicensesshouldbeaddressedtoWorldBankPublications,TheWorldBankGroup,1818HStreetNW,Washington,DC20433,USA;e-mail:pubrights@worldbank.org. TableofContents Acknowledgementsiv Abbreviationsvi ExecutiveSummaryvii 1.Maldives’IntertwinedDevelopmentandClimateChangeChallenges1 1.1.OverviewofMaldives’developmenttrajectoryinachangingclimate1 1.2.ClimatechangeimpactsinMaldives3 1.2.1.ImpactsfromSLR,flooding,andcoastalerosion3 1.2.2.Impactsfromoceanheating7 1.2.3.Otherhazardsandclimatechangeimpactsonpeopleandcommunities10 2.InstitutionsandPoliciesforClimateChange13 2.1.Climatechangecommitmentsandpolicies13 2.2.Climatechangeinstitutionsandgovernance14 3.TowardClimate-ResilientEcosystems17 4.TowardClimate-ResilientIslandsandInfrastructure21 4.1.Adaptationoptions21 4.1.1.Protectioninfrastructure21 4.1.2.Nature-basedsolutions22 4.1.3.Accommodationmeasures24 4.1.4.Islandraisingandlandreclamation27 4.1.5.Relocationandmigration28 4.2.Integratedadaptationplanning:Islandtypologyandadaptationpathways30 5.TowardClimate-ResilientLivelihoods33 5.1.Aclimate-resilienttourismsector33 5.2.Aclimate-resilientfisheriessector37 5.3.Socialprotection,people,andskillsforclimateresilience40 6.TowardaGreenTransitioninKeySectors44 6.1.Theenergytransition45 6.2.Themobilitytransition50 6.3.Thewastetransition52 7.MacroeconomicsandFinancingforClimateResilience55 7.1.Macro-fiscalchallengesandclimatechangeinvestments55 7.2.AdaptationcostsandmacroeconomicimpactsfromSLR58 7.2.1.CostsofadaptingtoSLR58 7.2.2.MacroeconomicimpactsfromSLR60 7.3.Climatefinance63 7.3.1.Publicclimatefinance64 7.3.2.Privateclimatefinance65 7.3.3.Concessionalclimatefinance68 7.3.4.Carbonmarkets69 7.4.Managingfinancialimpactsofclimateanddisasterrisks70 7.4.1.Disasterriskfinancingandinsurance70 7.4.2.Financialsectorrisks71 8.FromAnalysistoAction73 Annex178 Figures,Tables,andBoxes FigureES.1:ConceptualframeworkforclimatechangeanddevelopmentinMaldivesxi Figure1:Maldives’publicdebthasreachedunsustainablelevels1 Figure2:ProjectedaccelerationinmeansealevelinMaldives3 Figure3:Capitalstockdamagedfromcoastalfloodinginrelativeandabsolute(US$)terms4 Figure4:Assetsexposedtoinundationfromcoastalfloodingunderdifferentclimatescenarios5 Figure5:Shareofislandareasexposedtoatleast0.5mofinundationfromcoastalflooding6 Figure6:Seasurfacetemperatureandseverecoralbleachingthresholds(1997and2020)7 Figure7:Coralmortalityduetooceanwarmingshocksinpreviousyears8 Figure8:Developmentofthedistributionofcoralcoveramongreefsunderdifferentclimatescenarios9 Figure9:Predictedcoralcovercategoriesamongreefs(2030,2050,and2070)10 Figure10:ArchetypicalDynamicAdaptivePolicyPathwaysforMaldivianislands33 Figure11:Thebiggestclimatechange