Suva, Fiji, 17 May 2023 – Climate-related challenges are increasingly recognized in the financial sector globally, and collective approaches are a key solution according to a new regional study.
The study was part of discussions during a Pacific Islands Forum (PIF), Global Green Growth Institute (GGGI) and Agence Français de Développement (AFD) regional meeting this week with Pacific Island central banks, development banks and development partners. The workshop on Pacific Financial Sector Climate Resilience discussed how the Pacific financial sector can meet the challenges of the climate crisis to be responsive and resilient. The International Monetary Fund, (IMF) estimates annual costs of climate adaptation in the Pacific range from 6.5 to 9% of Gross Domestic Product.
To further understand the resilience of the financial systems in the Pacific, GGGI and AFD carried out a regional study. Completed earlier this year, the study titled Prefiguration study for an integrated financial system in the Pacific Region points to financial institutions preference to use a regional approach when addressing climate related financial responses. The purpose of the study was to understand opportunities for regional financial cooperation to meet the challenges of climate change.
Covering all six central banks and 22 development financing institutions in 14 Pacific countries and territories, the study brought to light some of the challenges for the financial sector in the Pacific including low awareness of climate change impacts, low capacity, delays in international climate finance access and fragmentation of Pacific financial systems. The preference for a regional cooperation approach to address challenges was consistently noted by respondents. Joint trainings and capacity building, as well as sharing knowledge and experience between countries and institutions was highlighted as opportunities.
“Through this study we see clear directions and preferences of Pacific countries and territories, particularly the central banks, on mobilizing capital markets, applying green finance taxonomies and learning from the experience in other jurisdictions,” said GGGI’s Deputy Director General Helena McLeod. “The Global Green Growth Institute supports regional cooperation across our work and from this study we see a lot of potential.” Ms. McLeod added. The study will be published after further review by key stakeholders.
At the event Mr Philippe Orliange, Executive Director Geographies of AFD and Ms. Helena McLeod, Deputy Director General of GGGI signed a regional partnership agreement. The partnership agreement formally recognises cooperation across individual projects and paves the way for future cooperation on regional climate change priorities.
“I am grateful for today’s event and for the very good collaboration we have had with GGGI in the Pacific. I am happy to sign with Helena McLeod, Deputy Director General of GGGI, this new partnership which will bring our collaboration to a new phase,” Philippe Orliange noted. “Climate change actions will be at the heart of our work together in the coming years to support Pacific Island Countries and territories in implementing their own solutions.”
For the Pacific Islands Forum, acting Director of Programmes and Initiatives Denton Rarawa welcomed the discussions blending climate, finance, and adaptation. “Climate change impacts are taking their toll on our developing Pacific economies, and our Leaders have been very clear in their desire to see responses that reflect the vision of the 2050 strategy, and the realities of our region,” he said. “This collaboration is timely and takes an exciting step in an important direction.”
He extended thanks to the France Development Agency and the Global Green Growth Institute for the partnership supporting regional climate change priorities.
The Agence Française de Développement (AFD) Group funds, supports, and accelerates the transition to a fairer and more sustainable world. Focusing on climate, biodiversity, peace, education, urban development, health, and governance, AFD conducts more than 4,800 projects in France’s overseas departments and territories and another 150 countries. In this way, we contribute to the commitment of France and French people to support the Sustainable Development Goals (SDGs).
Contact: Kim-Lou Cargnelli, Project Officer, AFD Pacific, cargnellikl@afd.fr
The Pacific Islands Forum (PIF) is the premiere political and economic policy organisation representing 18 members: Australia, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Kiribati, Nauru, New Caledonia, New Zealand, Niue, Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. The Forum’s Pacific Vision is for a region of peace, harmony, security, social inclusion, and prosperity, so that all Pacific people can lead free, healthy, and productive lives.
Contact: Lisa Williams-Lahari, Public Affairs Adviser, media@forumsec.org