Vulnerability of individual sectors to climate change
In terms of the amount of water available per person, the countries of the Western Balkans are the richest in water in Europe (10,600 cubic meters, which is twice the European average) (18). Most of this water comes from mountain springs, and some countries receive a significant share of their water from other countries across transboundary rivers. Water resources have always played an important role in the economies of the Western Balkans. Agriculture is largely dependent on water, where disturbances in the precipitation regime and a higher risk of drought and extreme weather conditions have significant implications for the stability of this sector. Water resources are also used to produce electricity. On average, about 37% of electricity produced comes from hydropower, although it is much higher in Albania (100%), Croatia (42%), and Montenegro (45.3%). Hydropower is affected by accelerated evaporation and drought, as well as changes in the time and volume of water flow. More frequent extreme events, such as floods, can also threaten energy infrastructure. In terms of water resources, the region faces several common problems, including weak transboundary cooperation and water pollution. After the break-up of the former Yugoslavia, there are more than 13 internationally common basins and four cross-border lakes. Most states share one or more basins. However, cross-border cooperation is generally weak, with low political priorities, insufficient institutional capacity, poor information exchange and joint monitoring, and in some cases conflicts that are some of the main factors (19). Water quality is also a cause for serious concern. Wastewater discharges are a major source of pollution for both surface and groundwater, and wastewater treatment is often poor or absent (20). In many areas of the Western Balkans, groundwater sources are at risk of agricultural runoff pollution - the biggest impact of nitrogen pollution (18). Climate change poses additional challenges in terms of water availability, quality and management. Climate change will exacerbate existing pressures on water resources and pose significant risks to sectors where water is a limiting factor. Almost all climate projections agree that countries in the region will experience a significant drop in rainfall in the twenty-first century, followed by increasing drought conditions and thus declining water availability (21). Higher temperatures will also move the snow line. By 2050, the snow cover is expected to decrease (22). Intense precipitation and increased snowmelt during the winter will increase the risk of floods across the region (14).
Land quality has widespread implications not only for agriculture but also for land production capacity, and the risk of land degradation is likely to increase with climate change. Rising temperatures, changing precipitation patterns, floods and droughts directly affect soil properties and processes, which can lead to accelerated erosion, soil degradation, and desertification (23). When drought is followed by periods of intense rain on steep, unstable terrain, the land is unable to absorb large amounts of water, resulting in the excessive runoff, landslides, and floods. Fires and overexploitation of resources can further contribute to desertification.
All countries in the region have extremely diverse natural potential for agricultural production, from fertile plains and river valleys to less productive karst, hilly and mountainous areas. The agricultural sector in the region generates an average of 11% of gross domestic product (GDP) (24). Eighteen percent of the population is employed in agriculture (25), which is often an economic and development driver for rural areas, where the share of employees in agriculture is much higher than the national average. Agriculture is a sector that can be considered the most vulnerable to climate change. Droughts in the Balkans have been identified as a key risk for agricultural production (26). Future projections of climate change and their impact on agriculture at the European level indicate that there will be more losses in the southern areas, including the Balkans. Key risks include reduced and increased yield variability, as well as reduced areas suitable for growing traditional crops (27). The negative effects of climate change on yields could be reduced if adaptation options were applied, but this would require 40% more water (28). Some alpine-mountainous regions, which today are characterized by lower average temperatures and shorter growing seasons than lowland areas, may benefit. For example, wheat yields in alpine areas are projected to increase significantly (29). The livestock sector is currently underrepresented in climate impact research in the region and there are only a few modeling studies (14).
Forests cover a large part of the land area of the Western Balkans (25) and play a significant economic and social role in all countries, both in terms of national economies and in terms of livelihoods. The wood industry significantly contributes to the development of local economies. In some countries, the contribution of forestry to GDP is high, such as in Montenegro (8%), while in other countries it ranges between 0.5 and 2.5% (30). Forests also provide several ecosystem services, including maintaining biodiversity, mitigating and adapting to the effects of climate change, and regulating soil and water regimes. The mountainous areas of the Western Balkans covered with forests are very rich in biodiversity, both in terms of flora and fauna, whether of global or European importance for conservation (7). There are vast areas of still preserved, natural, and semi-natural ecosystems that benefit both nature and humans through ecosystem services on which most local communities still depend heavily. Rainforest relics still exist in remote areas, mountains, and swamps, representing the last refuge of these forests in Europe (31). The reduction of the rural population and migration from rural to urban areas, especially from mountainous areas, has resulted in fewer and fewer young people engaging in forestry and exerting less pressure on cutting firewood for households. However, there are still concerns in the region about the quality of forests due to inadequate management of state-owned and privately owned forests (30), while factors such as illegal logging and corruption hinder the forestry sector from reaching its full potential. Climate change is also a risk to forests and their management. A significant increase in the number and intensity of forest fires across the region is associated with higher summer temperatures, prolonged droughts, and earlier melting of snow in the mountains. (32). In the future, the probability of an increase in forest fires, the length of the fire season, the frequency and intensity of fires will increase in the Mediterranean (33). Furthermore, the increase in CO2 concentration in the atmosphere, higher temperatures, changes in precipitation, floods, and the duration and frequency of drought will have significant effects on tree growth. These changes will have consequences on the frequency of pest and disease outbreaks (7).
The Western Balkans is a hotspot of biodiversity in Europe and contains a great diversity of ecosystems. The territory of the former Yugoslavia is one of the six European centers of biodiversity, containing 40% of vascular plants in Europe, 51% of fish, 74% of birds, and 68% of mammals (34). There is a high level of endemism in the Balkan countries due to the extremely diverse geology, soil, climatic ranges, and altitude. The number and size of protected areas in the region are increasing, although the share of protected land is still low compared to the share in the EU. Biodiversity in the region faces several threats, including deforestation, soil erosion, uncontrolled land use and pollution, as well as unsustainable hunting, fishing, and grazing (7). Climate change is expected to affect all ecosystems in the region, but ecosystems with limited species migration opportunities are particularly at risk. Large reductions in snow cover will lead to a decrease in alpine flora and fauna, as the vegetation of the foothill regions will be replaced by the vegetation of temperate zones (7).
In the Western Balkans region, achieving efficient and modern internal transport networks and infrastructure and communication networks between the countries of the region will be a key driver of economic growth and transition. This is a political priority of the countries themselves and the EU because it is an important tool for improving ties across the region and the integration of neighboring countries into the political and economic flow of Europe (7). A series of infrastructure projects are planned, including funding from the Instrument for Pre-Accession Assistance (IPA), which will connect capitals, major cities, and airports in the region, enabling faster economic progress by 2030. Although the transport system of the Western Balkan countries has improved over the years, the standards are significantly lower than European ones. Road congestion in and around cities, aging vehicles, poor vehicle maintenance, and changing road conditions all contribute to poor air quality. Pressure on road networks has also increased, between 2001 and 2006 freight transport has almost doubled, and public transport within and between cities is considered inadequate (34). Transport accounts for almost a quarter of the world's CO2 emissions. Although this figure is lower for the Western Balkans region, at approximately 14%, the share of emissions in the transport sector is growing in line with socio-economic developments. However, despite all the benefits that air transport provides, airplanes are also large emitters of GHGes and contribute significantly to climate change. The number of emissions that occur during one continental flight in Europe is many times higher than the use of other means of transport. At the moment, the aviation industry is responsible for about 2% of total global emissions, and although there are initiatives and measures to reduce them, it is the sector in which emissions are currently growing the fastest. An even bigger problem is the fact that the emissions of international aviation are increasing from year to year, currently, the emissions are 70% higher on an annual level compared to 2005. It is predicted that, if measures are not introduced to reduce emissions, emissions will increase by an additional 300% by 2050. There are no available studies on GHG emissions resulting from air traffic in the region, but they are certainly significant, as the Balkan region is a transit route for a large number of flights. An additional problem is the relatively old airport infrastructure, air pollution, as well as the lack of key competencies of staff engaged in the air transport sector, as well as related companies (35). Air transport must be transformed into a zero-emission sector. There are few studies on the effects of climate change on transport networks in the region (7). For road infrastructure, time stress already represents 30 to 50% of the current cost of road maintenance in Europe. Ten percent of these costs (0.9 billion euros) are related to extreme events, and floods are taking the lead. Significant additional costs for road transport infrastructure are projected due to more frequent extreme rainfall and floods (50-192 million euros per year between 2040-2100). Climate change in combination with transport has a strong impact on air quality. Emissions from transport contribute to air pollution and GHGes that cause climate change, whose effects - especially higher temperatures - worsen human health reactions to air pollution. An efficient transport sector would reduce GHG emissions and reduce the health effects of air pollution.
The region has a long history of mining. Exploitation includes aluminum, chromium, cobalt, copper, iron, lead, magnesium, manganese, nickel, and zinc, and of precious metals gold, palladium, and platinum, and hydrocarbon fuels coal (lignite), natural gas, and oil (34). By the 1990s, mining, mineral processing, and exploitation had established the region as a major European source of copper, lead, and zinc, and the mining industry was one of the leading industrial sectors (7). After the collapse of the common Yugoslav market in the 1990s, industrial production declined significantly, resulting in reduced pollution, but also many abandoned mines scattered throughout the region. Within the region, approximately one-third of the 180 sites identified are considered significant environmental issues, and one-fifth pose cross-border risks. Environmental problems include waste generation, air pollution, adverse effects on land and biodiversity, water pollution, hazardous substances, noise and vibration, energy use, and visual/aesthetic impacts (7). The dominant route of exposure to pollutants is rivers, which poses a critical transboundary pollution risk for countries in the region. Climate change may exacerbate the above-mentioned existing environmental problems. The risk is increased by a combination of natural disasters such as floods (as a result of more intense precipitation expected in the winter and spring months) and poor infrastructure.
The Western Balkans have huge potential for sustainable tourism due to its rich cultural heritage and diversity, attractive coastlines and historic cities. Tourism is one of the largest and fastest-growing economic sectors in the region, and most countries are expected to grow significantly in terms of both contributing to GDP and creating jobs. Similar to agriculture, tourism depends on natural conditions, especially in coastal and mountainous regions. Climate change is projected to have a significant impact on the sensitive mountain environment, with implications for the attractiveness of the mountain environment for tourism and the occurrence of natural hazards (7). Mountain ski resorts are among the tourist sectors that are considered to be the most endangered because it is expected that the duration of the snow season will be significantly reduced in the future. The concentration of activity on a smaller area and a shorter period during the year could also put more pressure on sensitive mountain ecosystems. Coastal regions are also considered very sensitive to climatic conditions, and the Mediterranean region as a whole is expected to become less attractive due to drought and higher temperatures. On the other hand, higher temperatures in the coastal region may favor tourism in hilly and mountainous areas. There are other broad, potential indirect impacts of climate on tourism in the region (changes in freshwater quality, changes, and losses in biodiversity, changed agricultural production - wine tourism, landslides and forest fires, higher incidence of vector diseases). Mitigation policies aimed at reducing GHG emissions will increase transport costs and may have an impact on tourists' travel patterns. In the region the tourism industry will undoubtedly continue to be a growing sector regardless of the climate change challenges.
The energy sector is considered extremely important for the economic growth of the Western Balkan countries. There is great potential for the development of this sector primarily in new investments. High dependence on oil and natural gas (imported energy) raises concerns about the security of energy supply and the need to diversify new sources of renewables such as biomass, solar, and wind energy, as well as the introduction of energy efficiency. Current patterns of energy use in the Western Balkans lead to significant environmental impacts. The region as a whole has a high carbon intensity due to the high dependence and use of coal (lignite). Other environmental problems include pollution from energy combustion (e.g., indoor and local air pollution from inefficient and improperly used stoves) and deforestation and land degradation (from excessive use of wood for fuel). Taking into account all these characteristics, the energy sector in the region is the main source of GHG emissions, pollutants, and oil spills. The main domestic sources of electricity production in the region are lignite and hydropower. Serbia, Bosnia and Herzegovina, and North Macedonia are mainly dependent on lignite (coal) thermal power plants to generate electricity. Albania draws almost all its electricity from hydropower. Bosnia and Herzegovina, Croatia, and Montenegro also have significant hydropower capacity (7). The energy intensity (energy efficiency indicator) of the Western Balkans is high. This can be attributed to the degraded state of energy infrastructure, large energy losses during transformation, transmission, and distribution, and inefficiencies in the end-use sector. Energy systems in the region are considered to be very sensitive to extreme events and temperature changes (14). The extent and nature of the impact depend on the degree to which countries rely on different energy sources. Thermal energy production is sensitive to climate change due to the availability of water and temperature, due to the high dependence of these power plants on cooling water. Lower levels in lakes and rivers, reduced runoff, accelerated evaporation, and warmer water can also reduce the amount of cooling water or cause restrictions on cooling water intake or discharge, limiting production capacity (40). Taking into account the effects of climate change on river water temperature and river flows, the capacity of nuclear and fossil fuel power plants in Southern and Eastern Europe could face a decline of 6–19% for the period 2031–2060 compared to 1971–2000 (40). More frequent extreme events, such as floods, will also jeopardize all types of energy infrastructure and lead to increased maintenance costs (34). In the Western Balkans much of the energy infrastructure requires extensive rehabilitation and replacement, given that it was built in the 1960s and 1970s (7). Climate change is expected to pose risks to electricity transmission network functions and reduce efficiency or change structural integrity, especially for older, poorly maintained facilities (34). Following the expected decline in annual river water levels and the changing seasonality of river flows, total hydropower production in Europe, including the Western Balkans, is expected to fall by 1.66 TWh, or 1.43%, compared to 2005 production levels (40). On the demand side, the trend of warmer winter temperatures and even warmer summers is expected to align the electricity consumption profile, as the demand for cooling energy increases and the thermal energy decreases (34). Electricity systems can be burdened to meet more stringent air conditioning requirements, especially if they rely on hydropower (40). Energy consumption in the Western Balkans has already increased by 53% between 1995 and 2005, and demand is expected to grow by an additional 34% from 2006 to 2030 (23). Economic development, population growth and climate impacts (reduced production and interruptions in electricity production) can together contribute to rising electricity prices and the risk of electricity shortages in the region (40, 41).
Adaptation to climate change
Adaptation is a risk management strategy that intends to respond to the inevitable effects of climate change and increase resilience - the ability to respond to a change in function or condition in the environment by resisting damage and recovering quickly. The countries of the Western Balkans face several challenges in terms of their adaptability. Countries with well-established, efficient governance and strong, stable economies have a distinct advantage in their adaptable capacities. Croatia has the largest adaptive capacity of the five countries covered by the index. North Macedonia has the lowest adaptive capacity, while Albania, Bosnia and Herzegovina, and Serbia are in the middle (9). There is not enough data for Montenegro.
In Albania, hydropower sources produce more than 95% of the country's electricity. In 2007, the total supply of the country was only 12% while in 2000 it was 25%. Overall, the share of total demand for renewable energy including hydropower fell from 42% in 2000 to 22% in 2007. The expected increase in long-term mean annual and seasonal air temperatures in Albania and a decrease in mean annual and seasonal rainfall will reduce long-term mean annual and seasonal water runoff. It is predicted that a 20% reduction in runoff will cause a 60% reduction in production. This means that while hydropower may be good for reducing GHG emissions, relying on hydropower can increase a country’s vulnerability to climate change. The precipitation regime is also important for agriculture, which is still the backbone of the Albanian economy. In the transition from communist rule to multi-party democracy, Albania has undergone major political, institutional, and socio-economic changes, and governments have struggled with high unemployment, widespread corruption, poor infrastructure, and powerful organized crime networks, all in a disputed political environment. The transition from a centrally planned state to a more modern open-market economy has been difficult, but the government has adopted a package of fiscal reforms aimed at reducing the large gray economy and attracting foreign investment (9).
In Croatia, concerns about water resources are widening as to whether water supply can continue to meet growing drinking water needs. The main issues in agriculture relate to water availability and elevated temperature and focus on the prospects of reduced water supply and higher frequency of droughts. Although Croatia has largely achieved macroeconomic stabilization, deep public resistance and weak political support have inhibited structural reforms. The long-term outlook for growth remains strong, but difficult problems - high unemployment, growing trade deficits, and uneven regional development - remain. The global financial crisis will create significant pressure, and Croatia's high external debt weakened the export sector, tight state budget, and excessive reliance on tourism revenues will result in a greater risk to economic stability in the medium term.
In North Macedonia industry and agriculture are the two most important sectors of the economy, but the services sector has recently gained in importance. Agriculture is a priority sector that accounts for a significant share of GDP and employment and contributes to social security and poverty reduction. North Macedonia expects very different effects from changes in temperature and precipitation: projections for reducing effective rains vary from 15 to 40%. Of the country's available water resources, 84% is formed within its borders, so the country is particularly sensitive to the overall reduction of effective rainfall. Agriculture will bear the greatest burden of negative consequences, and the greatest effects are expected in the central and southeastern parts of the country. North Macedonia has limitations at the systemic, institutional, and individual levels. Lack of resources and staff is evident in the ministries of environment and spatial planning, economy, transport, health, and industry. The main economic problems of North Macedonia are low living standards, high unemployment, and relatively modest economic growth (9).
Montenegro's vulnerability to climate change is greatest for forest ecosystems. Most Montenegrin forests are established by natural regeneration, and due to their climate and terrain, it is characterized by high biodiversity. They are important producers of biomass and are sources of fruits, herbs, and mushrooms. They provide habitat for wild plant and animal species, maintain and regulate the hydrological regime, protect against landslides and erosion, and absorb significant amounts of carbon. The extremely diverse ecosystems of Montenegro are characterized by rich flora and fauna - about 3,250 plant species, with the highest ratio of vascular flora and surface in Europe. Of the 526 European bird species, 297 can be found regularly in Montenegro, while about 29 other species are occasionally present. The country's small national economy was hit by the 2009 recession, which was significantly caused by negative global economic trends. Unemployment and regional disparities in development remain key political and economic problems (9).
Like most of its neighbors in the Western Balkans, Serbia faces dangers associated with rising temperatures. Increasingly frequent and intense droughts during the last two decades have already caused great damage to Serbian agriculture, and it is expected that field production will fall by as much as 10% in the second half of this century. The Serbian agricultural sector is an important part of the national economy and thus increases the country's vulnerability to climate change. Serbian agriculture employs 10% of the workforce and accounts for 26% of export earnings. With incomplete privatization and incomplete structural reforms, Serbia's economy remains in transition. The country's economic challenges include high government spending on wages, pensions, and unemployment, outdated technologies, degraded infrastructure, and low levels of domestic investment. Other problems include the growing need for new government borrowing combined with growing public and private external debt and stagnant levels of foreign investment. An inefficient justice system, high levels of corruption, and an aging population add to the difficulties. Serbia's strategic position, relatively cheap and skilled labor, and a generous package of incentives for foreign investment are factors conducive to economic growth (9).