4th International Conference on Small Island Developing States (SIDS4) Side Event

Financial Resilience for Future Prosperity: Empowering Small Island Developing States Against Climate Change
Date: Tuesday, May 28th, 2024, at 10:00 AM – 11:30 AM AST
Location: Room 6, American University of Antigua, Antigua, and Barbuda
Thematic Area: Making Climate Finance Work for SIDS: Building on the Outcomes of UNFCC COP 28

 

Context

Small Island Developing States (SIDS) stand on the front lines of climate change, facing unprecedented challenges that threaten their sustainability and very existence. These nations are particularly vulnerable due to their geographical and climatic conditions, which expose them to severe weather events, rising sea levels, and other environmental impacts that jeopardize their economies, ecosystems, and communities. Climate risks and fiscal risks are closely related, as the costs of recovery and adaptation can strain limited resources, leading to increased debt and economic instability.

The financial sector plays a pivotal role in addressing these vulnerabilities. It has the power to drive significant change by allocating resources, shaping investment strategies, and fostering innovative financial solutions tailored to the unique needs of SIDS. The sector’s involvement is crucial for implementing climate adaptation and mitigation measures, ensuring sustainable development, and building economic resilience.

This side event will explore the various ways in which the financial sector is contributing to strengthen the resilience of SIDS in the face of climate change. It will provide a platform for dialogue among financial institutions, policymakers, private sector representatives, and community leaders from SIDS. The session aims to highlight successful case studies, discuss current challenges, and identify actionable strategies for enhancing financial resilience and support for SIDS in their battle against the impacts of climate change.

Agenda

Setting the stage: Beyond Correlation: Understanding the Causation between Fiscal and Climate Risks in Small Island Developing States 
5 minutes

  • Presentation 1: Building Resilience Through the Banking Sector  
    10 minutes 
    Speaker: TBA

  • Overview: This presentation will focus on the bank’s approach to identifying, assessing, and managing climate-related risks. The speaker will outline the implementation of comprehensive risk management frameworks that consider the potential impacts of climate change on loan portfolios, asset values, and overall financial stability. 

 

  • Presentation 2: Leveraging Blue Economy for Fiscal Sustainability 
    10 minutes

  • Speaker: TBA

  • Overview: This presentation will talk about how the Government of Saint Lucia is utilizing innovative blue financing mechanisms to bolster economic resilience against climate risks. The case study will highlight the government’s ambitious plan to design and market a blue bond to strengthen the resilience of the country’s blue economy. 

 

  • Presentation 3: Climate Risk Insurance as a Fiscal Buffer   
    10 minutes 
    Speaker: TBA

  • Overview: This presentation will explore the adoption of climate risk insurance schemes as a strategy to manage fiscal risks associated with natural disasters. The speaker will share insights on the development and implementation of these insurance mechanisms, their impact on reducing economic volatility, and how they have provided a financial safety net for vulnerable populations. The speaker will highlight the successful use of parametric insurance in Belize’s world famous debt for nature swap.

  • Presentation 4: Public-Private Partnerships for Climate Resilience  
    10 minutes
    Speaker: TBA

  • Overview: This case study will illustrate how Jamaica is fostering collaborations between the government and private sector to finance climate resilience projects. The presentation will focus on successful partnerships, funding models, and how these initiatives are integrated into the country’s broader economic strategy to mitigate climate and fiscal risks 

 

  • Presentation 5: Fostering Financial Inclusion for Climate Resilience 
    10 minutes

  • Speaker: TBA

  • Overview: Highlighting the link between financial inclusion and resilience, this presentation will showcase initiatives aimed at extending banking services to underserved communities affected by climate change. The speaker will discuss how improving access to finance supports economic empowerment and enables individuals and businesses to invest in climate adaptation measures. 

 

Panel Discussion: Guiding Questions  
30 minutes 

Innovative Financing Solutions: What innovative financing solutions have been successful in enhancing financial resilience in SIDS? What innovative financing solutions are you interested in replicating, and how are you planning to do so? What are the main obstacles? 

International Cooperation: what forms of cooperation have been least and most effective in building financial resilience in SIDS? What practices should we abandon? What practices should we scale up?