Are Small Island Developing States Prioritized in Adaptation Finance?

In October 2016, Hurricane Matthew devastated Haiti. Months earlier, Tropical Cyclone (TC) Winston, the strongest cyclone recorded in the South Pacific basin, ripped through Fiji. Although single events like these natural disasters cannot be attributed to climate change with certainty, climate change does make such weather extremes more frequent and more intense. The world already feels the effects of a changing climate, and nowhere more so than in small island developing states (SIDS) such as Haiti and Fiji. SIDS are at the “front lines” of climate change and figure prominently in climate change discussions. A diverse category that comprises around forty islands, from Vanuatu and Singapore to Suriname and the Comoros, SIDS share a common vulnerability when it comes to the adverse effects of climate change. Their relatively long coastlines, and the concentration of their population and infrastructure along the coast, puts small islands at risk from sea-level rise. Although the SIDS must adapt to and cope with climate change, climate change must also be included in “traditional” aid given to these nations. Investments in these SIDS must be made climate-proof and must be cognizant of changing climate conditions.

Many of the resources necessary to implement these and other measures in SIDS must come from abroad—not only because SIDS themselves have limited financial capacity, but also because they are jointly responsible for less than half a percent of global greenhouse gas emissions. From a climate justice perspective, it is only fair that industrialized states, whose emissions caused climate change, should offset the adaptation expenses incurred by SIDS and other developing nations.

Industrialized countries have repeatedly pledged to provide support on paper, especially for “particularly vulnerable” countries such as the SIDS. In the 1992 UN Framework Convention on Climate Change (UNFCCC), industrialized states agreed to assist “particularly vulnerable countries” to meet adaptation costs. In the 2009 Copenhagen Accord, industrialized countries pledged $30 billion for 2010–2012 and $100 billion per year by 2020 for adaptation and mitigation, with adaptation funding prioritized “for the most vulnerable countries,” such as the least developed countries, SIDS, and African states. The 2015 Paris Agreement called on Parties to increase their adaptation finance and again recognized particularly vulnerable states’ needs. Lack of baselines and clear definitions make tracking adaptation aid flows difficult. According to OECD data on bilateral adaptation aid, 70 percent of funding commitments made between 2010 and 2015, or just over $41 billion, were disbursed.

Overall, however, donors do fulfill their pledge to assist SIDS, as particularly vulnerable countries, in their adaptation efforts. The SIDS receive above-average levels of support per capita from both multilateral and bilateral sources. As exemplified by the Adaptation Fund and the Green Climate Fund (GCF), both large multilateral funds set up under the UNFCCC, SIDS receive more multilateral aid for adaptation projects, such as flood management or disaster risk reduction. According to data from Climate Funds Update, the Adaptation Fund has approved projects worth $348 million in 48 different countries.

Ten of these projects were in SIDS, which then received $73 million. This amounted to giving islanders three dollars per capita on average, while non-SIDS beneficiaries of Adaptation Fund projects only received eleven cents per capita. The GCF reserves fifty percent of its funding for adaptation and fifty percent of its adaptation funding for SIDS. Accordingly, of the fourteen adaptation projects approved as of September 2016, three are in SIDS. The GCF gave these SIDS $91 million, or $71 per islander, significantly more than the 53 cents per capita for adaptation projects in other developing countries.

Aid data from the Organization for Economic Co-operation and Development (OECD) suggests that SIDS also receive significantly more bilateral adaptation aid than other countries. The top recipients of bilateral per capita adaptation aid from 2010-2014 are almost all SIDS. The largest recipients, Tuvalu and Niue, each received over $2,000 per capita for adaptation, while the third largest recipient, Nauru, received $183 per capita – still far above the average amount of aid developing countries receive for adaptation. Although there is much variation within SIDS, SIDS on average receive up to twenty percent more adaptation aid than other developing states.

This discrepancy in bilateral and multilateral funding for SIDS as compared to other developing countries partly reflects SIDS’ higher adaptation costs due to their higher level of vulnerability. It also results from SIDS’ small size. Adaptation projects, such as flood management or water supply systems, often have similar costs regardless of the number of beneficiaries, and SIDS often have a significantly lower number of beneficiaries, leading to much higher per capita costs. A GCF-funded flood management program in Senegal, for instance, benefited 2.2 million people. In contrast, another, more expensive GCF-funded flood management program in Samoa had only 37,000 beneficiaries. Samoan beneficiaries received much more support per capita, but this does not mean they are better protected than the Senegalese beneficiaries.

Three fundamental adaptation aid problems remain, however. First, donors mislabel and re-label their aid as adaptation aid. A recent analysis of the OECD data found that only a small subset of projects marked as relevant for adaptation truly addressed adaptation. Japan, for example, marks its loan for upgrading a wharf in Vanuatu as relevant for adaptation in the OECD dataset, but how this wharf helps Vanuatu cope with climate change remains unclear. On paper, donors fulfill their pledges, but on the ground, developing countries are not necessarily more resilient to climate impacts. Funding labeled as "adaptation funding must truly be about adapting to climate change. International aid agencies, then, must create and enforce clearer definitions and better reporting guidelines.

Second, even if all funding labeled as adaptation funding truly addressed adaptation, the overall level of adaptation aid would still be too low. As the damage from TC Winston and Hurricane Matthew suggest, the current aid level is unlikely to meet demand. Funds for adaptation are also rarely “new and additional” as pledged in Copenhagen. Rather, donors double-count their aid and re-brand it as climate finance. Climate change poses an additional development challenge, and adaptation support should therefore be additional to foreign aid.

Third, and most importantly, even funds that are new, additional, and truly address adaptation may support ineffective measures. Seawalls, for instance, are a popular measure against sea-level rise and flooding, but are often short-lived and provide locals with a false sense of security. There is no single solution to dealing with climate change impacts. Seawalls may adequately protect critical infrastructure in one place, but replanting mangroves or relocation may be more effective and sustainable elsewhere.

However, because available adaptation funding will not be enough for the near future, SIDS must spend their limited funding as wisely as possible. To this end, donor agencies must involve local populations, build capacity, think long-term, and document and share their experiences. Donor agencies must spend more time and money on monitoring and evaluating adaptation projects. Moreover, they must address what has worked and why, identify what they can learn from their mistakes, and identify best practices.

These problems and solutions are not new for the development community. Donor agencies must implement these policies so as not to continue making these mistakes in the context of climate change adaptation. Not addressing climate change impacts threatens food and human security in many parts of the world, and in the worst case may disrupt entire communities or even countries. It may be the end of the SIDS as we know them.