Climate Finance for Small Island Developing States

Written by Alvin Leong (LLM, JD), an energy and environmental policy consultant and fellow at the Pace Center for Environmental Legal Studies.  He can be contacted at

The Third International Conference on Small Island Developing States (SIDS) in Samoa, 1-4 September 2014 (the SIDS Conference) was an ambitious undertaking with substantive dialogues on the numerous challenges to sustainable development in SIDS.  In particular, there was much discussion of the challenge of climate change, and expressions of hope for the upcoming United Nations Climate Summit to be held in New York on 23 September 2014.

At the SIDS Conference, Conference President Malielegaoi, UN Secretary-General Ban Ki-moon, and UN General Assembly President John Ashe urged countries to take bold action at the UN Climate Summit.  The Foreign Minister of the Marshall Islands hoped that the UN Climate Summit would serve as a ‘clarion call’ to the ‘greatest climate alliance in history.’  While the power of rhetoric is undeniable, the question of whether rhetoric can be translated into concrete action remains as probative and pressing as ever.

The United Nations Framework Convention on Climate Change (UNFCCC) remains the primary international forum for negotiating the global response to climate change; as such, SIDS, acting through the Alliance of Small Island States (AOSIS), is dependent on large, powerful countries arriving at consensus and agreement on self-imposed restraints on greenhouse gas emissions.  Given the current emerging political realities, it is highly unclear as to what extent these self-imposed restraints would be ‘legally binding’ and even if they were ‘legally binding’ what real-world consequences would result from any noncompliance.  It is also likely that there will remain a ‘pre-2020 gap’ between the aggregate effect of mitigation pledges by parties in terms of global annual emissions of greenhouse gases by 2020 and aggregate emission pathways consistent with having a likely chance of holding the increase in global average temperature below 1.5 or 2 degrees Celsius above pre-industrial levels.

The inescapable reality is that climate change will remain a multidimensional (terrestrial, oceanic and atmospheric) risk and threat multiplier for SIDS in the coming years and decades  As such, for SIDS, long-term climate finance to build resilience and foster adaptation will be of critical importance to their sustainable development.

The term ‘climate finance’ lacks an internationally or consistently agreed definition. It can encompass a variety of sectors, such as infrastructure, energy, agriculture, forests and oceans; can take the form of grant-based assistance, development finance, export credit finance and public-private partnerships; and can be provided by a multiplicity of institutions such as multilateral development banks (MDBs), bilateral development finance institutions (DFIs), export credit agencies (ECAs), multilateral climate funds and bilateral aid agencies. For SIDS, the lack of a consistent definition of ‘climate finance’ and the diversity of programs and institutions generally leads to a fragmented approach and a lack of policy coherence, at subnational, national and regional levels, as well as challenges in monitoring and evaluation.

In terms of policy coherence, adaptation strategies and plans should take into account the different levels of exposure, sensitivity and capacity to adjust to climate change impacts in individual SIDS. In particular, adaptation policies and projects should consider the indigenous ‘adaptive capacities’ of individual SIDS and avoid a rush to ‘solutions’ that may end up being economically inefficient, ecologically unbalanced or socially inappropriate.

Also, there is no clear pathway for coordination and cooperation on climate finance across the intergovernmental mechanisms of the Post-2015 Development Agenda and the UNFCCC. These global mechanisms have the potential to be complementary, leverage off each other and become mutually reinforcing.  SIDS should consider advocating for the building of a strong and effective platform within the High-level Political Forum (HLPF) for engagement on SIDS sustainable development issues, including (but not limited to) long-term climate finance, to achieve greater policy coherence, greater accountability in monitoring and evaluation, and greater co-benefits from complementary processes under the UNFCCC.

As UN Economic and Social Council President Martin Sajdik indicated at the SIDS Conference, the international community bears a ‘special responsibility’ to SIDS. This special responsibility should include, as a principled and pragmatic imperative, a robust and effective climate finance regime that is coherent and accountable, and complements the broader sustainable development pathways of SIDS.







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