A fair share of resilience finance for Small Island Developing States

Until now, it was unclear how much and which types of climate and development finance were being allocated to Small Island Developing States (SIDS) to build resilience. This paper provides clear evidence of the gap between vulnerability and allocation of finance.

SIDS have long argued that their unique condition, including their small populations and geographic location, makes them especially vulnerable to multiple climate impacts that they have had a negligible role in generating. Yet this vulnerability is barely accounted for in the allocation of development or climate finance, and only partially embedded in international organisations (IOs), including across the UN system, World Bank, and World Trade Organisation. This vulnerability will only increase, with climate change and disaster impacts driving higher and higher debt levels, which in turn undermine SIDS’ resilience and adaptation potential. Yet investments can and do increase SIDS’ ability to cope with external shocks, and to adapt and build resilience to future climate change impacts. This paper analyses finance flows for 38 SIDS between 2013-20 to quantify the gap between vulnerability and allocation of finance.

Key Messages

SIDS receive seven times less finance than least developed countries, 11 times less than lower-middle-income countries, and five times less than upper-middle-income countries. This means that the allocation of climate finance is not linked to levels of vulnerability.
Pacific SIDS, in particular, have high levels of vulnerability to climate change and disasters, followed by Caribbean SIDS and then Atlantic, Indian Ocean, Mediterranean and South China Sea SIDS.
Developing countries which receive the highest levels of resilience finance are not among the most vulnerable countries . Meanwhile, the most vulnerable countries including SIDS receive below-average resilience finance flows in relation to the developing country group as a whole.
This lack of finance effectively compounds the impacts of the climate crisis for SIDS.
Several practical steps can be taken by IOs to better meet the needs of SIDS, including: special consideration of SIDS in relation to ODA eligibility; the endorsement and uptake of an MVI for finance allocations of donors and MDBs; and a defined climate finance target for SIDS and other vulnerable countries.

Related data: Resilience finance flows to Small Island Developing States

The new dashboard, created by RESI as a supplement to the report A fair share of resilience finance, quantifies finance flows to Small Island Developing States over a seven-year period (2013-2020).

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