Two Clouds on the Horizon: Averting a Combined Climate and Debt Crisis in the Pacific with Local Climate Finance – Fiji

Two Clouds on the Horizon: Climate Change and Debt in the Pacific

Climate change in the Pacific

The Pacific region is currently facing a perfect storm of climate change-induced disasters and soaring debt burdens. The Pacific Islands region is on the front lines of global climate change, and our neighbors in the region are facing rising sea levels and more frequent and extreme weather events than ever before. Pacific island nations are being hit by one disaster after another, often while rebuilding from the last, pushing many countries into debt.

Caritas Oceania and the Jubilee Australia Research Center have published a report on climate finance entitled: “Twin clouds on the horizon: averting a combination climate and debt crisis in the Pacific through Locally-delivered climate finance”. This is the first report to examine in detail debt, climate change and their combined impacts on the Pacific region.

After listening to the needs of Caritas Oceania members and communities across the Pacific, climate adaptation and financing were chosen as key areas for research and advocacy.

The report calls on Australia to lead the international community in building the capacity of Pacific countries to withstand the shocks of climate change, by restructuring debt, improving climate finance and funding the Pacific Resilience Facility.

What is Climate Resilience in the Pacific?

• Make sure the money gets to those who need it most at the local level.
• Provide better options for debt relief – especially after natural disasters – and restructure the regional financial system to make it more robust and able to withstand climate shocks.
• Ensure that funding is provided in the form of grants rather than loans to avoid increasing the debt of Pacific island countries.
• Ensure that climate finance commitments in the Pacific cover adaptation costs estimated at almost $1 billion a year – currently they receive less than half that amount for adaptation.
• Commit to sending climate finance through options such as the Pacific Resilience Facility which gives control to Pacific governments and institutions.

How is climate change affecting the Pacific?

As climate change-induced disasters continue to drain the resources and finances of Pacific countries, these challenges, combined with the shocks of COVID-19 and the international cost of living crisis, could lead to economic instability without precedent in the neighborhood of Australia.

In developing the report, Caritas Oceania and the Jubilee Australia Research Center engaged with communities on the frontlines of climate change in the Pacific, so that we can better represent the challenges local communities face in accessing funding climatic.

The communities told us that there was:

• Lack of awareness about what climate finance may be available to support local adaptation and how to apply for it – particularly a problem for women and vulnerable groups.
• Lack of funding mechanisms specifically focused on grassroots, local and traditional solutions.