Climate change poses significant challenges for Small Island Developing States (SIDS) in the Indo-Pacific, endangering their ecosystems, and increasing their vulnerability to economic and political disruptions. These states face rising sea levels, storm surges, and deteriorating marine environments, all of which threatening their way of life. Despite their negligible contribution to global carbon emissions, SIDS are disproportionately affected by climate change. However Yet, they receive only a fraction of the necessary climate financing. Effective climate financing is crucial for SIDS to adapt to and mitigate these impacts, but current financial flows are insufficient to meet the growing needs of these vulnerable states.

In this context, to commemorate World Environment Day, the Sustainable Finance in the Indo-Pacific (SUFIP) Development Network (DN) organised a webinar titled: “Climate Financing for Small Island Developing States in the Indo-Pacific: Institutions, Instruments and Imperatives.” This webinar focused on the urgent need for climate financing in SIDS, highlighting their unique vulnerabilities and the associated challenges. The event featured two- panel discussions with experts from various fields who shared their insights on accelerating climate finance and fostering resilience in the region.

The first panel centred on a just transition for SIDS and was moderated by Vikrom Mathur, Senior Fellow, Observer Research Foundation (ORF). The panel featured Emily Wilkinson, Director of the Resilient and Sustainable Islands Initiative (RESI) at ODI, UK. She emphasised the need for adequate climate finance allocation to SIDS and resilient health sector funding. She further pointed out the geopolitical challenges and the necessity of collective advocacy. This was followed by Labanya Prakash Jena, Senior Manager and Head of Center for Sustainable Finance, Climate Policy Initiative (CPI), India, who highlighted the significant financial challenges for the SIDS, due to high adaptation costs and public debt constraints. He proposed innovative financing methods like debt-for-climate swaps and the potential use of blue and sustainability-linked bonds to address these issues. Furthermore, Sourav Kumar Biswas, Director at Sponge Collaborative, stressed the importance of prioritising adaptation for SIDS, addressing issues like sea-level rise and fisheries decline, and spoke in favour of rapid mobilisation of loss and damage financing based on disaster intensity. Lastly, for the panel, Malshini Senaratne, Assistant Head, University of Seychelles, discussed Seychelles’ vulnerability to rising sea levels and the challenges in accessing concessional finance due to high-income status. She underscored the significance of the blue economy for promoting sustainable ocean practices and economic diversification.

The second panel focused on building resilient prosperity for SIDS and was moderated by Aparna Roy, Fellow, ORF. The panel began with Agathe Nougaret, International Technical Expert, Infrastructure Climate Change Adaptation, Coalition for Disaster Resilient Infrastructure (CDRI). She elaborated on the Infrastructure for Resilient Island States (IRIS) program at CDRI, which emphasises co-creation and regional consultation for infrastructure resilience. Further, she highlighted projects such as weather data collection, civil servant training, and infrastructure assessment across various SIDS regions, stressing the need for cross-sector coordination and global infrastructure resilience methodologies. This was followed by Wairimu Mwaniki, Medical Specialist Physician and Primary Healthcare Technical Advisor, Ministry of Defence, Kenya, who highlighted the need for resilient health infrastructure, like storm-proofing facilities and integrating solar panels for energy efficiency. She advocated for community-centered primary healthcare to manage patient surges and enhance preventive care. Furthermore, Inke Mathauer, Senior Health Financing Specialist at , World Health Organisation (WHO), stressed the importance of domestic health financing policies for SIDS to adapt to climate change. She also discussed the need for public finance reforms, progressive taxation, and the removal of fossil fuel subsidies to generate revenue, as well as stressed on increased investments in resilient health infrastructure. Lastly, Thomas Gonnet, Regional Task Team Leader for Asia and Southeast Asia, Agence Française de Développement (AFD), underscored the critical role of development partnerships in climate financing for SIDS. He highlighted the disparities in global investments and advocated for aligning financial systems with the Sustainable Development Goals (SDGs), to address environmental and social challenges effectively, specifically for the SIDS. 

The webinar highlighted the urgent need for innovative and integrated approaches to climate financing for SIDS. Key takeaways from the discussion include the necessity of adequate climate finance allocation to SIDS, the importance of collective advocacy in climate negotiations, and the potential of innovative financing methods like debt-for-climate swaps and blue bonds. Additionally, the integration of nature-based solutions within the blue economy, the development of resilient health infrastructure, and the alignment of financial systems with the SDGs were highlighted as crucial steps towards sustainable and resilient developmentgrowth in the Indo-Pacific. The inputs shared by the experts provide a potential roadmap for policymakers, development practitioners, and financial institutions to collaboratively work towards addressing the unique challenges faced by SIDS and enhances their capacity to adapt to and mitigate to the impacts of climate change.

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This event report is prepared by Srishti Bhadra, Intern, ORF Kolkata

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