Vanuatu Climate Finance
Vanuatu, like most Small Island Developing States (SIDS), bears little responsibility for climate change, but its geographical, socioeconomic and climate profiles makes it particularly vulnerable to its impacts. Despite this, Vanuatu remains poorly funded, and approved finance fulfils only a small part of actual needs. With the majority of finance focused on adaptation, the Pilot Program for Climate Resilience (PPCR) and the Least Developed Countries Fund (LDCF) are the biggest contributors. Vanuatu is gearing up to access transformational development finance from the Green Climate Fund (GCF), but substantial scaling up both climate adaptation and mitigation finance to Vanuatu is vital - both to address the vulnerability of its inhabitants by making agriculture, biodiversity and infrastructure sectors more resilient to climate impacts, and to shift the energy mix away from fossil fuels. The scale of financing needed to cope with climate change in Vanuatu and its impacts is will likely be in the billions of Vatu.
Vanuatu currently faces several challenges in regards to mobilizing climate finance:
- Access to climate finance is difficult because the different requirements of different sources are complex and cause duplication of efforts. Access modalities and associated processes are not always easily understandable, making reliance on development partners and financial intermediaries standard practice. Traditionally, multilateral and bilateral financing intermediaries, such as the World Bank, UN Agencies, and multilateral development banks (MDBs), have played an important role in distributing and channeling climate finance to Vanuatu, while direct access is limited by Vanuatu’s inability to currently meet the strict fiduciary standards required by international funds.
- Coordination of climate finance is also challenging due to the proliferation of climate finance mechanisms, and Vanuatu’s newly developing NAB governance structures. Ensuring country ownership has been difficult. It is difficult for Vanuatu to monitor, report, and verify (MRV) climate finance, as well as to account for its effective and equitable use. Because dedicated climate funds (i.e. those that only invest in climate activities) and climate - relevant funds (i.e. where climate - relevant activities are part of the investment, even though they are not explicitly identified or labelled as mitigation or adaptation activities as such) are labelled as climate finance, Vanuatu finds it difficult to track flows. Additionally, much climate finance flows through civil society agencies without being official reported through Government tracking processes. Even those flows that are reported to Government cannot be tracked adequately due to diverse climate finance accounting processes.
- Making detailed climate finance investment plans is still challenging, as the Vanuatu , NDC and other climate policy frameworks only indicate broad finance goals, but not targets, what will be financed and how. There are gaps in national and sectoral policies and strategies that should direct the mobilization of climate resources. Vanuatu does not yet have a concrete climate investment pipeline. This is due in part to a lack of predictability of finance from various sources.
UNFCCC, The Paris Agreement & International Climate Finance Context
The United Nations Framework Convention on Climate Change (UNFCCC), The Paris Agreement and the Kyoto Protocol require that developed country Parties (Annex II Parties) shall provide financial resources to assist developing country Parties in implementing the Convention. To facilitate this, the Convention established a Financial Mechanism to provide funds to developing country Parties. Read more...
Governance of Climate Finance in Vanuatu
Vanuatu’s National Advisory Board on Climate Change & Disaster Risk reduction (NAB) is the supreme policy making and advisory body for all disaster risk reduction and climate change programs, projects, initiatives and activities.
The NAB develops DRR and CC policies, guidelines and positions, Advises on international and regional DRR and CC obligations, Facilitates and endorses the development of new DRR & CC programs, projects, initiatives and activities, Acts as a focal point for information ‐ sharing and coordination on CC/DRR, as well as Guides and coordinates the development of national climate finance processes.
Vanuatu’s society, environment and economy are highly vulnerable to climate change and disaster risks. The NAB seeks strong collaboration with climate finance partners to plan and prepare for, and respond to, these challenges.