Small Island Developing States (SIDS) are facing significant hurdles in accessing global climate finance, not due to a lack of urgency, but because international funding systems perceive them as too small, fragmented, and high-risk, according to a new report. The publication, titled “Financing SIDS’ Blue Development: An Assessment of Regional Delivery Frameworks,” was launched by Back to Blue, a global ocean research initiative from Economist Impact and The Nippon Foundation.
The report underscores that despite their critical frontline position in the battle against climate change, SIDS are often seen as unattractive investment opportunities by financial backers. It estimates that these island nations require approximately $12 billion each year in climate finance but currently receive only a small fraction of that amount.
SIDS, which span the Caribbean, Pacific, and Indian Oceans, contribute less than 1% of global greenhouse gas emissions yet are already experiencing severe effects from climate change, including rising sea levels, extreme weather events, and ocean degradation. Peter Thompson, the UN Special Envoy for the Ocean, remarked that the findings reveal a fundamental injustice within the global financing framework. He emphasized that SIDS should be prioritized for climate finance, arguing they are impacted by a crisis they did not create and that their unique size and vulnerabilities hinder their access to necessary adaptation funds.
Thompson warned that without significant reforms in the global financing systems, SIDS will continue to be at risk. “Until the system radically improves, SIDS will remain dangerously exposed,” he stated.
To counter these challenges, the report outlines practical strategies to enhance financial access, including strengthening regional delivery mechanisms, pooling projects to mitigate perceived risks, and establishing funding models that are better tailored to the needs of small and vulnerable economies. By implementing these recommendations, there is hope for more equitable and impactful support for SIDS, allowing them to strengthen their resilience against climate threats.