SPECIAL FEATURE
higher rates of food-borne and non- communicable diseases. In 2019, Cyclone Kenneth severely damaged the agricultural sector in the Comoros, wiping out 16 percent of its GDP, making the country dependent on humanitarian aid and exacerbating food insecurity. Economic growth in SIDS is relatively low compared to other developing countries and highly concentrated in a few sectors. For example, fish exports account for nearly 60 percent of GDP in Kiribati and the Marshall Islands, while tourism makes up 50-80 percent of GDP in the Maldives, Palau and Vanuatu. Compared to other groups, SIDS have significantly higher economic vulnerability, leaving them very exposed to external shocks and continuous economic decline. Just like LLDCs, Small Island Developing States are focusing their efforts on mobilizing external funding. Twenty-eight SIDS have fully costed Nationally Determined Commitments under the Paris Agreement adopted in 2015, which in total will require US$287 billion from multilateral climate funds and other sources to implement over the next decade, says ODI. Because SIDS are considered “particularly vulnerable” by the Green Climate Fund, a UN entity that assists developing countries in adaptation and mitigation, other climate funds should allow for greater access to climate finance. However, problems persist and SIDS receive on average far less finance for climate resilience than Least Developed Countries. Most finance has long been directed towards large-scale mitigation projects, which SIDS do not generally need. Furthermore, SIDS are generally seen as poor investments as they are small and generate low returns. A further issue for SIDS is that existing sources of climate financing are fragmented and have different application processes that make different demands of governments. The introduction of the “loss and damage” concept at COP27 recognizes that SIDS are disproportionally affected by climate change, while having contributed very little to the conditions that are threatening their existence. “SIDS are responsible for only 0.2 percent of the global carbon emission and yet
suffer most from the impact of climate change,” the UN says. In light of this, delivery of finance is an increasingly existential concern: Current disaster risk financing mechanisms such as insurance and other instruments do not cover more than 10 percent of losses. A possible complementary source of finance is ODA. But here SIDS face two problems. The first is eligibility and concessional financing: taking gross national income per capita as the key measure ignores the distinctive vulnerabilities of SIDS. The second is the allocation of development finance: SIDS receive less than 6 percent, mostly in the Pacific, of all ODA, according to the UNDP. The problem for multilateral development banks and international financial institutions is that SIDS in many ways are different from their usual clients: their financing needs are generally perceived as too small, yet also too risky and they are thought to lack capacity to manage large investments. A new approach is currently under discussion at the UN with the possible introduction of a Multidimensional Vulnerability Index (MVI) to help affected countries break free from their current “Catch-22”, as the UN-OHRLLS says: “Most SIDS are not the poorest nations: but their costs are so much greater – and accessing financing is more difficult.” The index will combine gross national income measurement with climate vulnerability, access to finance and debt relief support in order to reflect both economic and ecological vulnerability. Such a new index still needs to be fine- tuned and adopted by the UN General Assembly. Even then, only strong buy-in from governments and international development agencies will secure its success. Experts are cautiously optimistic. The think tank ODI writes: “The process to establish a MVI has given renewed hope and impetus. It could become a vital tool to help small island nations gain access to the concessional financing that they need to survive the climate catastrophe, to improve their long-term national planning, service their debts and sign up to insurance and compensation schemes that may be their last hope when the water rises.”
SIDS: Interconnected areas of vulnerability
Impact on energy, tourism and transport
Sea level rise, flooding and storm surges
Threat to water supply and risk of drought
Risk of extinction of birds, mammals and sealife
Photos (top to bottom): Nataliya Hora/Shutterstock.com; ChameleonsEye/Shutterstock.com; arrowsmith2/Shutterstock.com; Rich Carey/Shutterstock.com
9
Powered by FlippingBook