Building Island Resilience Through Innovative Financing

Real innovation happened in Paris that highlights ways to help vulnerable communities adapt to climate change right now.

 

  At the COP 21 climate talks in Paris, the Government of the Seychelles announced the protection of a vast swath of Indian Ocean that surrounds this island nation off the coast of East Africa. This protection of their natural infrastructure – coral reefs, mangroves and coastal ecosystems which provide a buffer between the sea and their communities – is essential for Seychelles to increase their resilience to the impacts of climate change.     Seychelles’ commitment to a marine spatial plan for its entire exclusive economic zone, the first small island developing state to do so, will help the country plan where to focus their efforts most urgently.     These adaptation measures will be financed by an innovative financial deal, facilitated by The Nature Conservancy and supported by creditors in the Paris Club and South Africa, that restructures the country’s foreign debt. The deal has also brought together private investors and philanthropic foundations, creating a unique public-private-civil society collaboration. This new financial arrangement will ensure that Seychelles is able to fund these adaptation activities well into the future, through the creation of a new independent trust fund.     During a high profile event at COP 21, representatives from Seychelles, investors and supporters discussed what was required to make this happen, the conservation and adaptation benefits that were secured, and the potential for this model to be replicated elsewhere. Following Seychelles’ announcement of this historic debt deal for adaptation, several island nations from the Pacific, Indian Ocean and Caribbean regions have also expressed interest in exploring if such a mechanism could be crafted for them as well.       Watch the video above to learn more about this historic deal, and see how islands are innovating, adapting and helping one another to meet the challenges of climate change. http://bit.ly/2fVAyNn

Swapping national debt for action on climate change could be the solution we've been looking for

Last month’s global agreement on climate change was a remarkable gift to the world and to future generations.

One hundred and eighty-eight countries have submitted Intended Nationally Determined Contributions, setting out what they are prepared to do to reduce emissions and build climate resilience. Developed country governments have reaffirmed their commitment to raise $100 billion a year for climate action, with small and vulnerable countries first on the list for assistance. As the Prime Minister of Tuvalu - a Pacific nation threatened by catastrophic sea level rises - said during the Paris summit: "If you save Tuvalu, you save the world."

Now the New Year has arrived and it’s time to act on these resolutions. A rapid and sustained flow of climate finance for the vulnerable developing countries is central to managing the climate challenge. Thus far the flow of climate financing has been less than satisfactory. This must change. Climate financing should not lead to a reduction in traditional official development assistance.

That’s why global warming was a top priority of Commonwealth leaders at their recent meeting in Malta. Their Statement on Climate Change provided timely, important political impetus to the Paris Conference. And they generated some good ideas to free up funds for climate action.

Here’s one: swapping national debt for climate change action. Many vulnerable countries are so burdened by debt they simply can’t afford to address global warming. Jamaica, for example, is struggling with a public debt to GDP ratio of 140 per cent. For the Seychelles, it’s 65 per cent. Think what could happen if countries like these lowered their burden by taking action on climate change: they could expand marine protected areas, strengthen coastal defences, reform fisheries policies, promote water conservation, manage coastal zones, invest in renewable energy and create institutions to advance their plans — working their way out of debt at the same time.

The Commonwealth’s proposal for a Multilateral Debt Swap for Climate Action has been recognized by the United Nations as a promising option to address the twin challenges of unsustainable debt and climate change. Swaps could be supported by the Climate Finance Access Hub that’s just been launched by the Commonwealth to help small and vulnerable countries access climate finance and build institutional capacity.

It doesn’t end there. The Paris agreement has given markets the clear signal they need to scale up investments that will generate low-emission, climate-resilient development. With the ambitious results emanating from Paris, what was once unthinkable is now unstoppable. The private sector is already investing increasingly in a low-emission future. Climate solutions are increasingly affordable and available, and many more are poised to come, especially after the success of Paris. More

 

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