Bulgaria’s Green Future Faces a Poverty Test as Climate Hazards Hit Vulnerable Communities

A World Bank study warns that climate change, energy poverty, transport barriers and rising carbon costs could deepen poverty and regional inequalities in Bulgaria, particularly among vulnerable households. The report urges targeted financial support, affordable clean energy, better public transport and green job opportunities to ensure a fair and inclusive climate transition.

A comprehensive World Bank Group study highlights how climate change, energy poverty, transport difficulties, and economic inequalities could make Bulgaria's transition to a low-carbon economy more challenging. The report, Climate Vulnerability and Poverty in Bulgaria: Energy, Mobility, Geographic Disparities, and Distributional Impacts of Climate-Shock Policies, examines how environmental risks and climate policies affect vulnerable households, workers and communities. It warns that without targeted government support, efforts to reduce carbon emissions could increase living costs, deepen poverty and widen regional inequalities. The findings underline the importance of combining climate action with affordable energy, better transport, employment opportunities and stronger social protection.

Climate Change Threatens Bulgaria's Poorest Communities

Climate change is already creating serious economic and social risks across Bulgaria. According to the World Bank, about 47.4% of the population, or around 3.1 million people, lives in municipalities exposed to severe climate hazards, including droughts, floods, landslides, and extreme temperatures.

Agricultural drought is particularly widespread, affecting areas containing approximately 2.4 million people. These conditions threaten farming, food production, rural employment and household incomes.

Poor communities face greater exposure to environmental disasters. Around 56% of people at risk of poverty live in municipalities affected by severe climate hazards, compared with 45.4% of the nonpoor population.

Regional inequalities make these challenges more difficult. Rural poverty reached 30.9% in 2024, compared with 17.6% in urban areas. Meanwhile, GDP per capita in Sofia is nearly 4.5 times that of Haskovo.

The findings suggest that climate adaptation policies must prioritize poorer municipalities through improved infrastructure, agricultural support, disaster preparedness and stronger local economic opportunities.

Energy Poverty Raises Concerns Over Household Costs

Energy poverty remains one of Bulgaria's biggest obstacles to an inclusive green transition. Approximately three in ten Bulgarians experience energy poverty, while 19% of the population reported being unable to keep their homes adequately warm in 2024.

The situation is particularly difficult for low-income households, with 37.2% of people living in income poverty unable to maintain adequate indoor heating.

Households spent an average of 12.7% of disposable income on energy in 2021. The burden was higher among rural families and households with unemployed members.

Many rural households depend on wood for heating, while poorly insulated homes and inefficient heating equipment increase energy consumption and expenses.

The report recommends improving building insulation, expanding access to cleaner heating technologies and providing targeted financial assistance.

Cleaner household heating could also deliver major health benefits. The study estimates that residential heating decarbonization could generate more than $51 billion in benefits, including approximately $41 billion from reduced deaths associated with air pollution.

These findings show that affordable clean energy could improve household finances, public health and environmental outcomes simultaneously.

Transport Barriers and Green Jobs Expose Economic Inequalities

Transport poverty presents another challenge, particularly for rural residents, older people and low-income families.

Around one-quarter of Bulgarian households report no transport expenditure, reflecting limited mobility in some communities. Only 59% of rural households and 52% of elderly households use any form of transport.

Petrol and diesel account for more than 82% of household transport expenditure, leaving consumers vulnerable to fuel price increases.

Limited public transport also reduces access to employment, healthcare, education and markets. For businesses and traders, poor connectivity can increase operating costs and restrict customer access.

Employment changes linked to decarbonization could create additional pressures. Approximately 51.8% of Bulgarian workers are employed in carbon-intensive sectors, while 32.9% hold non-green jobs within these industries.

Although green-sector workers receive an estimated 3.6% wage premium, opportunities are unevenly distributed, often benefiting workers with stronger education and technical skills.

The World Bank recommends vocational training, green apprenticeships, improved transport services and economic diversification to help vulnerable workers participate in emerging industries.

Carbon Pricing Could Increase Poverty Without Government Support

Bulgaria's climate commitments require substantial changes in energy production, transport and industrial activity. However, policies designed to reduce emissions could increase household expenses unless appropriate safeguards are introduced.

World Bank simulations suggest that introducing the European Union's expanded emissions trading system alongside removing implicit energy subsidies could increase consumption-income poverty by 2.2 percentage points without compensation.

Higher energy and transport costs would disproportionately affect poorer households because essential expenses already consume a large share of their income.

The report argues that targeted cash transfers, energy vouchers and transport assistance could protect vulnerable consumers while supporting emissions reductions.

Bulgaria's anticipated allocation of approximately €2.5 billion under the European Union's Social Climate Fund offers an opportunity to finance such measures.

The study also emphasizes the importance of using climate-related revenues to improve housing, expand affordable mobility and support workers affected by industrial restructuring.

The World Bank concludes that Bulgaria's green transition must be socially inclusive. Climate policies can deliver environmental and economic benefits, but their success will depend on protecting poorer households, strengthening regional development and ensuring that vulnerable communities are not left behind.