State and Trends of Climate Adaptation Finance in Small Island Developing States

International public adaptation finance for Small Island Developing States (SIDS) averaged just over $2 billion annually in 2021–2022, representing only 0.2% of global climate finance. This is significantly below the estimated annual need of $11.7 billion required between 2023 and 2035. The report highlights a critical reliance on debt, which accounted for 44% of flows, and a lack of correlation between finance volumes and climate vulnerability. It advocates for replacing ODA eligibility criteria with a multidimensional vulnerability index to improve access to concessional funding.

• International public adaptation finance flows to SIDS are critically low, averaging just over $2 billion annually in 2021–2022, which constitutes only 0.2% of all global climate finance.
• There is a substantial adaptation funding gap; SIDS are estimated to require at least $11.7 billion in average annual finance flows between 2023 and 2035, meaning current flows are nearly six times lower than assessed needs.
• Debt represents a significant portion of adaptation finance, accounting for 44% of flows in 2021–2022, which poses a risk to macroeconomic stability as 40% of SIDS face unsustainable debt levels.
• Multilateral development finance institutions (DFIs) are the primary providers of adaptation finance, contributing 60% of tracked flows, though 65% of their finance to SIDS was provided as debt.
• Adaptation finance is highly concentrated and poorly aligned with vulnerability; 67% of tracked finance went to only 10 SIDS, and there is no significant correlation between finance volumes and ND-GAIN country vulnerability scores.
• ODA eligibility criteria based on gross national income (GNI) per capita create disparities in access to finance, with ODA-eligible SIDS receiving $1.9 billion annually compared to only $181 million for ODA-ineligible SIDS.
• Regional distribution of finance varies: the Caribbean received the highest aggregate funding ($987 million), while the Pacific received the highest per capita funding ($59 per person).
• Sectoral needs are dominated by water and sanitation (26%), food, agriculture, and forestry (19%), and infrastructure (18%), yet many SIDS fail to specify needs for the blue economy, coastal resilience, or sustainable tourism.
• Tracking adaptation finance is hindered by a lack of domestic budget tagging, inconsistent definitions of adaptation finance, and a lack of standardized impact metrics.

APA

Climate Policy Initiative (n.d.). State and Trends of Climate Adaptation Finance in Small Island Developing States. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/State-and-Trends-of-Climate-Adaptation-Finance-in-Small-Island-Developing-States.pdf

Chicago

Climate Policy Initiative. State and Trends of Climate Adaptation Finance in Small Island Developing States. n.d. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/State-and-Trends-of-Climate-Adaptation-Finance-in-Small-Island-Developing-States.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=State and Trends of Climate Adaptation Finance in Small Island Developing States |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/State-and-Trends-of-Climate-Adaptation-Finance-in-Small-Island-Developing-States.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiativendstate, author = {{Climate Policy Initiative}}, title = {{State and Trends of Climate Adaptation Finance in Small Island Developing States}}, institution = {Climate Policy Initiative}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/State-and-Trends-of-Climate-Adaptation-Finance-in-Small-Island-Developing-States.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }