On June 13, the World Bank Group held the launch of the “Country Climate and Development Report for Armenia” in Yerevan. Welcoming remarks were delivered by Rolande Pryce, World Bank Regional Director for the South Caucasus; Ines Rocha, World Bank Regional Director for Europe; and Aram Meymaryan, Deputy Minister of Environment of the Republic of Armenia.
The report was presented by Julie Rozenberg, Senior Economist at the World Bank and co-author of the Country Climate and Development Report for Armenia. According to the report, Armenia’s electricity, heating, and transport sectors rely heavily on natural gas, and the country’s energy intensity relative to GDP is higher than the global average. Natural gas accounts for about 63% of Armenia’s total energy supply—one of the highest shares in the world—and all of it is imported, mainly from the Russian Federation, creating significant vulnerability to external shocks. Due to the large share of natural gas, Armenia’s greenhouse gas (GHG) emissions per capita are below the global average: in 2019, they amounted to 3.8 tCO₂e per person. The energy sector is the main source of emissions (two-thirds), followed by agriculture.
“The scenario where Armenia diversifies its gas imports and pays international gas prices would lead to a higher cost for the power system than a decarbonization scenario, in which Armenia transitions from a gas-based economy to a solar-powered economy and reduces emissions to reach a target of 2.07 tCO₂e per capita by 2050,” the report states.
According to the report, decarbonization would also improve air quality and help halt severe land and forest degradation. The annual cost to human health from air pollution due to fine particulate matter (PM2.5) reaches 10.6% of GDP.
Land degradation is high and is exacerbated by rapid deforestation. About 70% of Armenia’s forests are degraded due to mining, illegal logging, and the rural population’s heavy dependence on firewood for heating.
“Actions to decarbonize the energy sector would reduce PM2.5 concentrations by nearly 8 micrograms per cubic meter by 2060, or about 25% compared to 2020 levels. This corresponds to a 75% reduction in deaths attributable to fossil fuel–related air pollution and a 2% reduction in deaths caused by dust storms by 2060.”
Regarding the water sector, the report states that Armenia is already under “water stress.” In the Ararat Valley, groundwater extraction for industrial-scale fish farming and irrigation exceeds the annual natural replenishment rate. To meet irrigation demand, releases from Lake Sevan significantly exceed the historical natural outflow. The water supply system suffers significant losses: 20–67% during irrigation and, on average, 70% of water supplied to communities is lost due to leaks. Climate change will exacerbate these trends, reducing irrigation water availability (with unmet irrigation demand exceeding 50% in some basins by 2050) and decreasing agricultural production volumes. A dry/hot future could reduce rain-fed crop yields by 37%, irrigated crops by 25%, and livestock production by 20% by the 2050s. Climate change will also worsen land degradation, resulting in agricultural production losses of $363 million, more than double the current impact. It may also increase the intensity of floods, which already cost the country 0.8–2.3% of GDP annually due to damage to property.
Increasing resilience and productivity in the agriculture sector could help the country avoid an increase in poverty by 2.7 percentage points by 2030 compared to a baseline scenario with current gas prices.
The report provides climate risk projections by region. Vayots Dzor Region has the highest projected share of people falling into poverty due to climate impacts on water and agriculture by 2030, followed by Armavir.
According to the report, if Armenia does not undertake additional reforms, it will not reach its 2050 GHG emissions target as stated in its Nationally Determined Contribution (NDC). “To achieve this ambitious goal, Armenia should set a 2030 target to reduce GHG emissions by at least 65% compared to 1990 levels (up from the current 40%) and significantly raise its climate mitigation ambition in the near term,” the report emphasizes.
According to the report’s estimates, Armenia should invest about $3 billion in the energy sector to shift from a gas-based economy to one powered by solar energy. An additional $2.8 billion in phased investments in energy efficiency and electrification programs for industry, construction, and digitalization could significantly reduce energy demand by 2040. Improving water use efficiency, conservation, and water resource management will require an estimated $1 billion investment.
For a resilient, low-carbon development pathway, approximately $8 billion in investments will be needed between 2025 and 2060.
June 18, 2025 at 15:14