This is the first Climate Country and Development Report (CCDR) to cover a European Union member state and a high-income economy.
Key highlights
- Romania can simultaneously accelerate poverty reduction while decarbonizing its economy towards the climate objective to reach net zero emissions by 2050. The impactful use of EU funding, complemented by structural reforms, as well as effective public and private investments are instrumental for a successful green transition in Romania.
- Reaching 2050 targets will present substantial challenges, requiring political and population buy-in, as well as substantial funding. Green development investment needs in key decarbonizing sectors alone—electricity, buildings, and transport—are estimated at about 3% of cumulative GDP by 2050.
- With over 70% of Romania’s total energy usage dependent on fossil fuels, energy transition is paramount and so is electrifying the economy. Shifting from direct fossil fuel consumption to an electrified economy based on low carbon sources will require a major a massive electrification program.
- While decarbonization efforts are needed across the whole-of-economy, urgent attention is required in two areas—transport and water—that are critical to achieving net zero by 2050 and will prove significantly challenging. Romania’s transport sector remains underdeveloped, holding back growth. Water stands out as one of the most urgent emerging issues in both climate adaptation and mitigation agendas in Romania, due to evident development gaps. Rising temperatures and an increased frequency of heatwaves will pose additional threats to infrastructure in these and other sectors.
- Human capital and skills development will be critical to achieving economically and environmentally sustainable growth. The workers of today and the future will need to be upskilled, including through rethinking school education and leveraging Active Labor Market Policies to help vulnerable groups to adapt to the green economy and contribute to a new productive model.
A proposed pathway to achieve Romania’s net zero targets by 2050
While Romania is on track to achieving its 2030 climate targets, reaching net-zero by 2050 will present substantial challenges, requiring a whole-of-society approach.
Between 1990-2018, Romania reduced its emissions by 53.2%, leaving it only a further 3.9% reduction to meet the goals of “Fit for 55” in 2030. However, as the economy continues to expand and living standards increase, there is a real threat that current emissions could increase as well—as happened between 2020-2021, instead of going down.
To reach net-zero by 2050, Romania will have to reduce substantively emissions reductions in hard-to-abate sectors and expand carbon sinks, including through additional forests. Achieving this will require deliberated policy and regulatory interventions to rationalize land use and increase afforestation.
The Romania Country Climate and Development Report (CCDR) demonstrates a potential pathway to achieve 2050 targets, highlighting the need for substantially reduction of emissions in the near team in three areas - power generation, agriculture, and transport.
Additionally, the CCDR puts forward seven priority recommendations to help Romania in meeting the interim goal of Fit for 55, while putting in place the critical foundations for deeper decarbonization that will be needed to achieve net zero emissions by 2050. These are:
- Increase electrification and fuel switching
- Increase energy efficiency
- Increase strategic management of water resources
- Build and protect human capital
- Accelerate decarbonization of transport
- Improve fiscal incentives
- Deepen government collaboration and coordination
Video from the Launch of the Report
Executive Summary of the Report