Climate And Disaster Resilience Financing In Small Island Developing States

Storms, hurricanes, and cyclones have been a feature of life on Small Island Developing States (SIDS) for centuries. But climate change is now increasing the intensity of these disasters, as well as creating new developmental challenges - like rising sea levels and increasing ocean acidity - ...

Small Island Developing States (SIDS) stand at a critical juncture on their paths to sustainable development. Economic growth, human development and vulnerability indicators point to specific challenges facing SIDS, and suggest that new development solutions...

Small developing states are disproportionately vulnerable to natural disasters. On average, the annual cost of disasters for small states is nearly 2 percent of GDP—more than four times that for larger countries. This reflects a higher frequency of disasters, adjusted for land area, as well as greater vulnerability to severe disasters. About 9 percent of disasters in small states involve damage of more than 30 percent of GDP, compared to less than 1 percent for larger states. Greater exposure to disasters has important macroeconomic effects on small states, resulting in lower investment, lower GDP per capita, higher poverty, and a more volatile revenue base.

This book explores how vulnerable and resilient communities from SIDS are affected by climate change; proposes and, where possible, evaluates adaptation activities; identifies factors capable of enhancing or inhibiting SIDS people’s long-term ability to deal with climate change; and critiques the discourses, vocabularies, and constructions around SIDS dealing with climate change. The contributions, written by well-established scholars, as well as emerging authors and practitioners, in the field, include conceptual papers, coherent methodological approaches, and case studies from the communities based in the Caribbean Sea and the Indian, Atlantic, and Pacific Oceans. In their introduction, the editors contextualise the book within the current literature. They emphasise the importance of stronger links between climate change science and policy in SIDS, both to increase effectiveness of policy and also boost scholarly enquiry in the context of whose communities are often excluded by mainstream research. This book is timely and appropriate, given the recent commission by the Intergovernmental Panel on Climate Change (IPCC) of a Special Report that aims at addressing vulnerabilities, “especially in islands and coastal areas, as well as the adaptation and policy development opportunities” following the Paris Agreement. Coupled with this, there is also the need to support the policy community with further scientific evidence on climate change–related issues in SIDS, accompanying the first years of implementation of the United Nations Sustainable Development Goals.

Small Developing States (SDS) face substantial challenges in achieving sustainable development. Many of these challenges relate to the small size and limited diversification of their economies. SDS are also among the most vulnerable countries to the impact of climate change and natural disasters. Meeting SDS sustainable development goals goes hand-in-hand with building their climate resilience. But the additional costs to meet development and resilience objectives are substantial and difficult to finance. This work adapts the IMF SDG Costing methodology to capture the unique characteristics and challenges of climate-vulnerable SDS. It also zooms into financing options, estimating domestic tax potential and discussing the possibility of accessing ‘climate funds.’

We present a dynamic small open economy model to explore the macroeconomic impact of natural disasters. In addition to permanent damages to public and private capital, the disaster causes temporary losses of productivity, inefficiencies during the reconstruction process, and damages to the sovereign's creditworthiness. We use the model to study the debt sustainability concerns that arise from the need to rebuild public infrastructure over the medium term and analyze the feasibility of ex ante policies, such as building adaptation infrastructure and fiscal buffers, and contrast these policies with the post-disaster support provided by donors. Investing in resilient infrastructure may prove useful, in particular if it is viewed as complementary to standard infrastructure, because it raises the marginal product of private capital, crowding in private investment, while helping withstand the impact of the natural disaster. In an application to Vanuatu, we find that donors should provide an additional 50% of pre-cyclone GDP in grants to be spent over the following 15 years to ensure public debt remains sustainable following Cyclone Pam. Helping the government build resilience on the other hand, reduces the risk of debt distress and at lower cost for donors.

This book explores how vulnerable and resilient communities from SIDS are affected by climate change; proposes and, where possible, evaluates adaptation activities; identifies factors capable of enhancing or inhibiting SIDS people's long-term ability to deal with climate change; and critiques the discourses, vocabularies, and constructions around SIDS dealing with climate change. The contributions, written by well-established scholars, as well as emerging authors and practitioners, in the field, include conceptual papers, coherent methodological approaches, and case studies from the communities based in the Caribbean Sea and the Indian, Atlantic, and Pacific Oceans. In their introduction, the editors contextualise the book within the current literature. They emphasise the importance of stronger links between climate change science and policy in SIDS, both to increase effectiveness of policy and also boost scholarly enquiry in the context of whose communities are often excluded by mainstream research. This book is timely and appropriate, given the recent commission by the Intergovernmental Panel on Climate Change (IPCC) of a Special Report that aims at addressing vulnerabilities, "especially in islands and coastal areas, as well as the adaptation and policy development opportunities" following the Paris Agreement. Coupled with this, there is also the need to support the policy community with further scientific evidence on climate change-related issues in SIDS, accompanying the first years of implementation of the United Nations Sustainable Development Goals.

The fragile and conflict-affected situations (FCAS) and small island developing states (SIDS) approach represents a new way of doing business for the Asian Development Bank (ADB) in its most vulnerable developing member countries. FCAS and SIDS face unique development challenges such as a greater need for governance and institutional capacity building, geographic isolation, small populations, narrow asset bases, and armed conflict. The FCAS and SIDS approach—or FSA—introduces flexible processes and procedures that will allow ADB to tailor interventions to the specific challenges of these countries, with the goal of improving project results, and ultimately improving livelihoods.