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Promoting Transformative Climate Innovations in SIDs: COP28 Recap 

Writer's picture: Sohailia SaywackSohailia Saywack

Source: ADB

As the impacts of climate change continue to intensify, small island developing states (SIDs) are at the forefront of finding impactful climate solutions to manage the existential threats posed by rising sea levels, ocean acidification, and more extreme weather events. However, the rate of change needs to be faster, and SIDs still face significant challenges in promoting transformative change. 


During COP28, the UN Climate Change Global Innovation Hub hosted a panel event focused on opportunities and challenges to promoting more climate innovations in SIDs. The session featured key leaders—Racquel Moses, CEO of the Caribbean Climate-Smart Accelerator, James Ellsmoor, CEO of Island Innovation and Co-Founder and Director of Solar Head of State, and Sefanaia Nawadra, Director General of the Secretariat of the Pacific Regional Environment Programme (SPREP)—who shared their experiences pushing innovation forward in the regions. They discussed the growing need for new financing instruments, climate technologies, and institutional capacity-building for SIDs. 


It is clear that both Caribbean and Pacific SIDs face limits to accessing climate finance. The scale of climate finance often fails to meet regional needs, and there are significant disparities in access to finance between regions. This 2023 study published by the UN Economic Commission for Latin America & the Caribbean outlines that meeting climate commitments requires investments of ~3.7% to ~4.9% of regional GDP annually until 2030. There is still a long way to go as, in 2020, climate financing totalled just 0.5% of regional GDP. This November 2023 report by the Overseas Development Institute estimates that annual US$1.7 billion in economic losses, representing 0.8% of collective yearly SIDs’ GDP, can be attributed to climate change. 


Of course, the scarcity of food and fuel and rising prices adversely affect the fiscal situation of these SIDS and their ability to access cross-cutting funding. As highlighted by Racquel Moses, a key lever to overcome for many SIDs is that their funding is determined by GDP per capita instead of their unique vulnerability to climate disasters. Blended finance, patient capital, and increased private-public partnerships (particularly as it relates to regional insurance) can facilitate sustainable solutions to address climate challenges and contribute to the economic development of SIDs. As the growing gap in funding climate action continues to be acknowledged, the recent operationalisation of the Loss and Damage Fund, which totalled US$792 million in pledges from developed nations, presents a new pathway for developing countries. Moreover, enhancing investments in digital skills among youth, technological innovations, and data availability are vital avenues to promote climate resilience and sustainable development goals (SDGs).


While there is much to be done to finance climate innovation, a key takeaway from this session is that transformative work is already underway. In the Caribbean, the Dutch islands are facilitating a robust and sustainable energy mix; Bermuda has achieved domestic water security by mandating roof-top rainwater collection; Barbados is an exemplar in solar water heating; and Jamaica is leading the way in opening markets for investments in the energy transition. 


In the Pacific, Sefanaia Nawadra spotlighted that innovation relies on home-grown solutions, context, and ownership. This is because, although there are similarities with the Caribbean, the Pacific is remote and less accessible to significant markets or technical assistance. To combat this, strategic regional partnerships have been established for knowledge brokerage and capacity building, including the development of the Pacific Climate Change Centre via cooperation agreements between Samoa and Japan, and additional funding support from New Zealand. Additionally, the creation of the Niue and Ocean Wide (NOW) Trust under New Zealand law in late 2023 represents a fund to bolster Niue’s sustainable management of their exclusive economic zone and preserve the marine areas integral to the nation’s heritage.  Another noteworthy consideration from the Pacific SIDs is the use of technology to address existential climate challenges; Tuvalu, a narrow island expected to be one of the first nations to be lost to rising sea levels, is utilizing digital technology to create a digital twin of the island in the cloud, safeguarding its statehood and cultural memory.


Climate innovation involves developing financing and technological solutions to close the gap on mitigation and adaptation, building more resilient economies, and accelerating the energy transition. This panel stressed that new approaches are needed to build new systems. Economic new colonialism—or reliance on the global north as the “provider of solutions” and the global south as the “purchaser”—must shift. To achieve this, speakers mentioned the export of green hydrogen from SIDs and climate-smart mapping as potential opportunities for project developers to take an economy-of-scale approach.


James Ellsmoor emphasized that SIDS experience the impacts of climate change firsthand and most severely. Innovation is not an option but a necessity for these nations. Through a decarbonization lens, innovations must pay specific attention to the nation’s state of development, economic structure, and fuel resource endowments. As we know, despite contributing the least to greenhouse gas emissions, low-income SIDs face developmental challenges that limit their ability to invest in clean energy opportunities without access to affordable financing. Middle-income SIDs with manufacturing and service-oriented economic bases must increase their focus on decarbonization, while those focused on silviculture and agriculture may prioritize deforestation issues. 


Across both low and middle-income SIDs, depleted public savings from the COVID-19 pandemic exacerbate climate financing challenges. At the same time, dependencies on fossil fuel imports necessitate clean energy investments for overall energy security. It was highlighted that SIDs with lower carbon electricity exports earn revenues while easing foreign exchange bottlenecks as they have cheap energy due to abundant hydro resources. This enables greater flexibility to accelerate emission reductions because they do not have stranded fossil fuel asset costs. As such, SIDs with heavy reliance on fossil fuel exports could benefit from greater economic diversification to avoid locking into future stranded assets and price volatility. 


As COP28 concluded with the commitment to “transition away” from fossil fuels to achieve a 2050 net-zero goal, we marked a pivotal moment in addressing both the financing and technological needs of SIDs to make even more significant strides in climate innovation. In reflecting on transformative work accomplished by individual SIDs, regional partnerships, and private-public investments, the panel discussion underscored the need for the global north to advocate better and step up for SIDs’ innovation needs. Engaging policymakers, private sector actors, research and education institutions, and progressive national assistance programming continues to be the central avenue for SIDs to anticipate and manage the climate risks that threaten their very statehood. 

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