This report summarises the types of financial instruments as well as specific products and arrangements that are available to support climate and disaster risk management objectives in Pacific island countries (PICs). For Pacific island countries (PICs), the impacts and implications of climate change and disaster events threaten the wellbeing and livelihoods of Pacific people, continue to erode national development gains, and present long-term risks to the foundations of Pacific economies. Current trends and climate change projections suggest that the interactions between the dynamics of climate change and hazard events in the Pacific will continue to increase the likelihood of disaster events occurring and drive up the potential for more extreme slow onset risks, such as drought.
As a result, PICs are increasingly required to consider short and immediate strategies for addressing their risk exposure alongside longer-term resiliencebuilding efforts such as infrastructure hardening. The confluence of environmental changes and hazards with other transboundary threats such as pandemics, localised health crises, and economic volatility, further increase the rationale for small vulnerable economies to put in place pre-emptive financing arrangements to manage increasing risks. Climate and disaster risk financing instruments are now being employed and developed by PICs to help buffer shocks and complement existing risk reduction efforts. This report summarises the types of financial instruments as well as specific products and arrangements that are available to support climate and disaster risk management objectives in PICs.