1. Climate Change Financing: Selected Issues Track 6 Contribution

2. Climate Change Impacts The world is already 0.8° degrees warmer than 1950. 4.0° degree warming by 2100 without significant policy change – “Existential threat” to atoll countries – Sea level rises of 0.5 – 1 meter – Extinction of coral reefs, ocean acidification Warming of 1.5 ° degree by 2100 will be irreversible in 7-10 years on current emission trends. Source: Turn Down the Heat, World Bank 2012

3. Pacific Infrastructure Needs Built infrastructure assets in the Pacific islands about US$ 40 billion US$ 650 million per year needed just to maintain current assets (3% GDP) Millions of people still without access to mobile phones, electricity grid, transport network Private sector (over US$ 1 billion already invested in telecoms, scope for US$2 billion in renewable energy) But public investment critical

4. Additional Adaptation Costs Costs for developing countries world wide to adapt to climate change: US$70 - $100 billion every year If a 4° warmer world by 2100, the Pacific will need – US$ 18 – 31 billion between 2010 and 2050 – US$ 450 - 775 million every year If warming kept to 1.5°, the Pacific will need – US$ 6.0 billion (US$ 150 million per year) between 2010 and 2050 Estimates are minimums: – US$ 70m just to ensure current water and sewerage system in Suva resilient to climate change (new water intake to avoid salt water intrusion, relining of pipes less than 1 meter above sea level) Source: The Economics of Climate Change in the Pacific, Asian Development Bank 2013

5. Disasters already cost the Pacific US$300m on average – every year 10 of the 25 most vulnerable countries are in the Pacific Cyclone Pam: damage and losses of $450m in a single event equal to 65% of Vanuatu’s GDP Intensity of cyclones likely to increase with climate change Almost 60% of total infrastructure assets in the Pacific within 500 meters of the coast

6. Adaptation Financing $3 billion annual development assistance to the Pacific incorporating climate change resilience Limited “new and additional” funding – Pacific received about US$200 million in past 5 years – Climate Investment Funds, Global Environment Facility – Complex to access Insurance: – Limited coverage for households – New Pacific insurance scheme (PCRAFI) provides coverage for Governments, but only for immediate needs (TC Pam payout $2m to Vanuatu)

7. Green Climate Fund Great opportunity US$10 billion pledged, and US$ 6 billion paid 50% for adaptation (compared to about 15% of current climate funds) At least 50% of adaptation funds for vulnerable countries – $2.5 billion for LLDCs and SIDS First funding round: November 2015 – Proposals being prepared for Kiribati, Fiji, Samoa (among others) 20 accredited entities so far: – ADB, SPREP, UN, World Bank in Pacific – Scope for national accreditation Key Question: Terms – Decisions to be made on a case by case basis

8. Suva Declaration: 2 Financing Recommendations Developed countries should honour 2010 Copenhagen agreement to mobilize US $100 billion in adaptation funding – Still an adaptation financing gap of over $70 billion per year - about equal to global aid flows (World Bank) – Meeting $10 billion GCF pledges a good start…but only a start New and additional adaptation funds for SIDS should be 100% grants – SIDS are at the forefront of adaptation, but insignificant contributors to climate change – Loans, even if concessional, will require SIDS to increase debt or divert resources from other priorities