COP28 delivers too little too late for Pacific Islands

COP28 delivers too little too late for Pacific Islands

Fri, 05th Jan 2024

Article tagsForecastingPoliticsAsiaCountry Analysis

What's happened?

COP28, the annual UN climate change conference that was held in December 2023 in Dubai, offered a disappointing outcome for Pacific island countries, where climate change is an existential threat. The event was attended by most Pacific heads of state and hundreds of senior officials. However, the final consensus document, which called for the phase-out of fossil fuels, was adopted when most small states were out of the room and addressed few of their concerns. Although new funding initiatives for mitigation and adaptation were announced, they fell short of what is needed to keep global warming below 1.5 degrees Celsius.

Why does it matter?

The Pacific Islands are at the forefront of advocating for urgent climate action because they face an immediate and severe impact. The region is already experiencing severe droughts, food insecurity due to reduced arable land, and more frequent and destructive storms. In some countries, these challenges are causing significant population loss and economic strain, with environmental damage and limited economic opportunities driving emigration.

Climate change will place additional strain on government budgets across the region. For many Pacific governments, sales of fisheries licenses are a key source of revenue. The impact of ocean temperature changes on tuna migration patterns is expected to reduce fisheries licence revenue by 20% by 2050. Tourism, another critical source of revenue, is also under threat, as climate change threatens marine ecosystems and coastal infrastructure.

Despite some new funding commitments, financing for climate adaptation still falls far short. The Loss and Damage Fund capitalised in Dubai remains a small fraction of the annual cost of climate-related damages, which the IMF estimates at about US$1bn annually. Moreover, accessing and effectively using available climate finance remains a major challenge, given high administrative and compliance burdens. As a result, Pacific countries are increasingly seeking more flexible and risk-tolerant approaches to financing, hoping to attract philanthropic donors and government support to match the scale and urgency of climate impact. For example, at COP28, the Pacific Community, a regional organisation, secured US$225m in flexible, "catalytic" funding from the Bezos Earth Fund and Global Environment Facility for an innovative "Unlocking Blue Pacific Prosperity" regional initiative.

What next?

Pacific island countries will continue to advocate for enhanced global climate action and funding. Wielding around 15 UN votes, the unified Pacific Islands exercise significant clout in international organisations. They also have a compelling "climate justice" narrative: they have made virtually no contribution to global warming, but will suffer most and soonest from climate change. However, the lack of adequate financing commitments and failure to reform funding mechanisms, bolster public finance institutions and implementation capacity will limit the success of climate adaptation in the Pacific.

The analysis and forecasts featured in this piece can be found in EIU's Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.

Fri, 05th Jan 2024Article tagsForecastingPoliticsAsiaCountry Analysis

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