Djibouti Country Climate and Development Report

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Table of Contents

• Table 1. Priority Areas for Adaptation Defined by the 2017 NSCC and the Draft Revised NDC 28
• Table 2. Migrant groups in Djibouti 36
• Table 3. Modeled Effects of Migration on Growth, Fiscal Balance, and Expenditure 38
• Table 4. Groundwater Use of Djibouti Benchmarked Against Neighboring Countries. 43
• Table 5. Losses in the Urban Water Network 44
• Table 6. Damages in Past Urban Floods in Djibouti City 54
• Table 7. Additional Priority Investment for Resilience and Green Growth Modeled in the CCDR 78
• Table 8. Investment and Policy Priorities 85
• List of Figures 5
• List of Tables 6
• Acknowledgements 7
• Acronyms and Abbreviations 8
• Executive Summary 11
• Chapter 1 – Climate and Development 19
• A. Development context 19
• B. Risks and opportunities from climate change and natural hazards 22
• 1. Current climate risks 22
• 2. Climate change projections 22
• 3. Climate change risks to development and green growth opportunities 24
• C. Challenges and opportunities for a low‑carbon growth path 25
• Chapter 2 – Country Climate Commitments, Policies, and Capacities 27
• A. Summary 27
• B. Recommendations 31
• Chapter 3 – Selected Climate and Development  Priorities 33
• A. Leveraging regional integration 33
• 1. Regional integration – Climate challenges and green growth opportunities 33
• 2. Regional integration – Policy options 39
• B. Safeguarding livability for the people of Djibouti in a marginal climate 41
• 1. Safeguarding livability – Climate challenges and green growth opportunities 41
• 2. Safeguarding livability – Policy options 51
• C. Advancing diversification and job creation 53
• 1. Diversifying an urban services economy – Climate challenges and green growth opportunities 53
• 2. Diversifying an urban services economy – Policy options 61
• Chapter 4 – Macroeconomic and Welfare Implications of Climate Change 65
• A. Opportunities and threats to macroeconomic performance from climate change 65
• B. Poverty and distributional impacts of climate change 68
• C. Private sector and financial sector issues 71
• 1. Current landscape of climate finance 74
• 2. A strategy to spur climate investment 75
• D. Fiscal considerations in managing climate change considerations. 77
• 1. Structural reforms to expand the fiscal scope for climate investments. 79
• 2. Prioritizing concessional financing for sustainable development 79
• 3. Building a climate-resilient economy by reforming Djibouti’s state-owned enterprises 80
• Chapter 5 – Conclusion and Recommendations 83
• References 88
• Figure ES.1. Modeled Cumulative GDP Losses due to Climate Change through 2050 (percent of estimated 2024 GDP) 13
• Figure ES.2. Policy Goals and Investment Strategy for Development and Resilience 17
• Figure 1. Djibouti’s Two-Decade Economic Expansion Has Raised it to Lower-Middle-Income Status 19
• Figure 2. Contributors to Djibouti’s Growth 20
• Figure 3. Projected Change in Temperature and Precipitation in Djibouti 24
• Figure 4. Climate Change Governance Functions in Djibouti 29
• Figure 5. Modeled Climate Impacts on Road Transport 34
• Figure 6. Change in Water Resources and Income Per Capita in Developing Countries with Low Initial Water Resources 42
• Figure 7. Impact of Heat Stress on Livestock Production (average 2041-2050) 46
• Figure 8. Labor Productivity Losses Due to Heat Relative to Baseline, 3-Year Moving Average 48
• Figure 9. Vegetation Cover in Djibouti Ville and Comparator Cities 49
• Figure 10. Malaria Incidence and Mortality 49
• Figure 11. Disease Mortality and Morbidity for Historical Baseline and for 2041-2050, under Different Climate Futures 50
• Figure 12. Estimated Current and Future Water Supply Mobilized for Urban Consumption 51
• Figure 13. Expected Annual Capital Loss from Urban Flooding 55
• Figure 14. Inundation Depth from Storm Surges Following Sea-Level Rise 55
• Figure 15. Example of Informal Construction in the Bed of the Langobaleh Wadi, Djibouti City 56
• Figure 16. Expected Losses to Potential Fisheries Catch Relative to Baseline 57
• Figure 17. Electricity Tariff Comparison with MENA and Peers 58
• Figure 18. Power Supply Cost Reduction and its Implication for End-Users 58
• Figure 19. Power Demand Estimates 59
• Figure 20. Power Generation Projections by Source 60
• Figure 21. CGE Modeling of Climate Impacts on Real GDP at Market Prices (Relative to Baseline) 65
• Figure 22. Cumulative Losses of GDP Relative to Baseline 67
• Figure 23. Simulated Poverty Impact of Climate-Induced GDP Losses 69
• Figure 24. Key Challenges to Starting a Business in Djibouti 73
• Figure 25. Sources of Climate Finance in Djibouti, 2020 (in US$ million) 74
• Figure 26. Policy Goals and Investment Strategy for Development and Resilience 84