Climate and disaster resilience financing in small island developing states
Natural disasters and climate change severely affect the growth trajectory of Small Island Developing States (SIDS) and their ability to achieve sustainable development. SIDS are located in some of the most disaster-prone regions in the world and comprise two-thirds of countries with the highest relative annual losses due to disasters. With the effects of climate change compounding the intensity of these disasters, this trend is set to continue, creating new developmental challenges for SIDS. Natural disasters and climate variability severely impact major economic sectors in SIDS, hinder economic growth and affect the most vulnerable populations. Lacking relatively stable and strong fiscal revenues and domestic savings, SIDS governments often need to divert scarce public resources from essential social and economic development investments to address disaster-related needs, compromising the pace and scope of future growth. Development in SIDS, therefore, is subject to a range of interconnected and mutually reinforcing economic, social and environmental challenges.
This report illustrates the positive steps that SIDS are taking and in many cases leading to ensure that climate and disaster resilience is addressed as an integral part of their development. In addition, it shows how concessional financing can positively support resilience actions, for example by helping to establish adequate intitutional and budgetary arrangements. The report points to some financing mechanisms and modalities that providers could make greater use of, particularly by pooling resources in support of programmatic approaches and strengthening country systems.
The report calls for the international community to consider financing for climate and disaster resilience that is appropriate for the challenges that SIDS face, less fragmented, easier to access, predictable and long-term. It essentially calls for a more consistent, comprehensive and coordinated financing architecture that is better tailored to the needs of SIDS. It also calls on SIDS to create enabling policies and institutions to ensure more effective use of funds, and for the sustained effort needed to ensure their development is climate and disaster resilient.