Climate Adaptation and Energy Reform: Strengthening Botswana’s Macroeconomic Resilience
Selected Issues Papers, December 30, 2025
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- Climate Adaptation and Energy Reform: Strengthening Botswana’s Macroeconomic Resilience
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Bibliographic details
- Authors: Emanuele Massetti, Danielle N Minnett, Filippos Tagklis
- Published: December 30, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229035446.018
Overview
- Authors: Emanuele Massetti, Danielle N Minnett, Filippos Tagklis
- Date: December 30, 2025
- Summary findings:
- Botswana faces mounting macroeconomic risks from intensifying climate trends and fiscal strain from electricity subsidies.
- Rising temperatures, more frequent extreme heat, and longer droughts threaten agricultural yields, labor productivity, and long-term growth.
- Electricity subsidies compound these risks by limiting the government’s capacity to respond effectively.
- The paper examines macroeconomic and fiscal implications of climate shocks, outlines priorities for adaptation measures, and proposes energy sector reforms to reduce subsidy burdens.
- Aligning climate resilience and energy security with fiscal sustainability is critical to safeguard development.
Key Macroeconomic and Fiscal Risks
- Climate-related risks identified:
- Rising temperatures.
- More frequent extreme heat.
- Longer droughts.
- Economic channels affected:
- Agricultural yields.
- Labor productivity.
- Long-term growth prospects.
- Fiscal constraint:
- Electricity subsidies increase fiscal strain and limit the government’s capacity to respond to climate shocks.
Priorities for Climate Adaptation
- Principal adaptation priorities (as outlined in the paper):
- Measures to protect and stabilize agricultural yields under longer droughts and higher temperatures.
- Interventions to preserve labor productivity amid more frequent extreme heat.
- Actions that enhance long-term growth resilience to climate trends.
Energy Sector Reforms
- Core reform objectives:
- Reduce electricity subsidy burdens to free fiscal space.
- Strengthen energy security while supporting fiscal sustainability.
- Integrate renewable energy and renewable resources considerations in energy sector planning.
Policy Recommendations and Alignment
- Strategic emphasis:
- Align climate resilience priorities with energy security goals and fiscal sustainability.
- Intended outcomes:
- Safeguard development by reducing vulnerability to climate shocks and by alleviating subsidy-driven fiscal constraints.
Content in this bundle
- Sipea2025162