1.3.2.1 The Theory of Climate Justice

1.3.2.2 Theory of Change

1.4.1.1 Abstract of Chapter 2

1.4.1.2 Chapter 2 Methodology

1.4.1.3 Chapter 2: Summary of Key Findings

1.4.2.1 Abstract of Chapter 3

1.4.2.2 Chapter 3: Methodology

1.4.2.3 Summary of Key Findings of Chapter 3

1.4.3.1 Abstract of Chapter 4

1.4.3.2 Methodology of Chapter 4

1.4.3.3 Summary of Key Findings of Chapter 4

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population, land-area, or weighted vulnerability. The PSIDS, on the other hand, tend

to exhibit a significant degree of variation in finance flows when allocation is done on

the same 3 bases. The PSIDS average allocation, when determined by land area, is

USD 24 million. This amount decreases by 57% if allocation is done on the basis of

vulnerable population, and 65% if allocation is done on the basis of weighted

vulnerability. It is important to also note that the PSIDS overall data is heavily skewed

by PNG which has a total population of 8.4 million.

The ratio of finances as per the 3 allocation basis increases significantly for PSIDS and

the wider SIDS grouping if allocation were done on a per country basis. For SIDS, the

per country allocation amount is on average 10 times more than the amount if

allocation were to be done on the basis of vulnerable population, land area, or

weighted-vulnerability. However, the range of increase varies significantly for PSIDS,

with the per country rate allocation being 23 times more than the amount prescribed

by the vulnerable population criteria, 10 times more than that of the land area criteria,

and 29 times more when compared to weighted vulnerability.

Figure 3.1 Average allocations by vulnerable country grouping

At the regional level, the impact of the four allocation criteria within the PSIDS is also

quite significant across countries (Figure 3.2). If the GCF allocations were made on

the basis of vulnerable population, PSIDS categorized as Pacific Smaller Island States

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Article

Assessing Climate Finance Readiness in the Asia-Pacific Region Jale Samuwai 1,* and Jeremy Maxwell Hills 21 Pacific Centre for Environment & Sustainable Development, The University of the South Pacific, Laucala Campus, Private Mail Bag, Suva, Fiji Islands 2 Institute of Marine Resources, The University of the South Pacific, Laucala Campus, Private Mail Bag, Suva Fiji Islands; jeremy.hills@usp.ac.fj * Correspondence: jalecuruki5@gmail.com; Tel.: +679-994-5586 Received: 3 February 2018; Accepted: 11 April 2018; Published: date

Abstract: Readiness is the current mantra in the climate finance discourse and is a key determinant for accessing climate finance. This study develops and applies an analytical 3-dimensional framework to appraise climate finance readiness in selected Asia-Pacific countries. Three dimensions of readiness are identified: (1) Policies and Institutions, (2) Knowledge Management and Learning, and (3) Fiscal Policy Environment. Using the Climate Public Expenditure and Institutional Review as the basis for such framework, the study uncovers a massive readiness gap between countries in the Asian sub-region and those in the Pacific sub-region. The study also found that readiness has a predictable, yet small, impact on the magnitude of climate finance accessed. This suggests that improving readiness alone is not sufficient to unlock climate finance, as access to climate finance is to a larger extent determined by other factors; this is critical to shaping readiness endeavors for the Pacific Small Island Developing States (PSIDS), as well as for donors. This study argues for a re-think in the PSIDS current readiness approach, reducing emphasis on multilateral and private flows and diversifying through practical and uncomplicated bilateral and remittance sources. These two sources of finances have a good track record of consistently mobilizing external finance to PSIDS despite their climate finance readiness status. Broadening readiness efforts towards these two alternative funding sources extends the feasibility of the current readiness approach. The present direction of climate finance readiness offers a continuing access dilemma to many of the PSIDS, especially the poorest and most vulnerable.

Keywords: Climate Finance; Readiness; Asia-Pacific; Small Island States; Bilateral; Remittances; CPEIR; PSIDS; Climate Change

1. Introduction

Access to climate finance remains an on-going negotiation issue within the United Nations Framework Convention on Climate Change (UNFCCC). Precisely determining how much climate finance has been mobilized so far is challenging, as estimates differ depending on definitions and accounting procedures. Donors tend to

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7. A national climate financing policy has been developed with international development partners.

8. Special market conditions have been created to incentivize private sector to invest in CC-related investments.

9. Constant budgetary support from donors for CC activities has been received.

10. A pipeline of national priority climate change projects exists.

11. Innovative financing options have been developed to respond to the challenges of CC.

12. There is sufficient financial resource mobilization for CC projects aligned to national priorities.

13. A functioning financial management and reporting systems are in place for CC financing.

14. Partnerships have been established between public and the private sector for CC programming.

15. MRV system for domestic climate finance exists. 16. MRV system for international climate finance

exists. 17. Government budget allocation at the local level

reflects CC priorities. 18. Non-traditional stakeholders including CSOs and

private sector participate in CC program planning, implementation, and M & E.

19. Key fiscal information can be easily accessed by the public.

20. National audit reports are scrutinized by legislative bodies.

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Figure 1. Average allocations by vulnerable country grouping

At the regional level, the impact of the four allocation criteria within the PSIDS is also quite significant across countries and allocation criteria (Figure 2). Within the PSIDS, if the GCF allocations were made on the basis of population, those PSIDS categorized as Pacific Smaller island States (PSIS)28 will be the most disadvantaged

PSIDS if allocations are to be done on a population basis, because its total of population is less than 2000. Timor-Leste, Fiji, Solomon and to some extent Vanuatu will experience small but significant climate finance flow due to their high population. PNG, the most populous PSIDS (~64% of Pacific population), stands to gain the chunk of adaptation finance in the region.

PNG will again, benefit the most, should the GCF decides to allocate adaptation finance on the basis of land area as it accounts for more than 85% of the total land area in the Pacific. While other larger PSIDS such as Timor-Leste, Fiji, Solomon and Vanuatu, might also receive significant inflow of adaptation finance, the difference in the ratio between the amounts they receive with that of PNG under such allocation is quite significant (~ 25 times). The PSIS whose combined land area only accounts 0.01% of the total land area in the Pacific will be the most penalized under this allocation criterion. Moreover, the ratio of the aggregated allocation amount of PSIS when compared to that of other bigger PSIDS is also quite substantial. Larger PSIDS could receive up to 28 times more adaptation finance under such allocation when compared to PSIS. This difference increases exponentially when compared with

The impact of a possible allocation based on weighted vulnerabilitysignificantly varies amongst PSIDS when compared against their possible allocations

28 This grouping is exclusive to six Pacific Smaller Island States (PSIS); Cook Islands, Marshall Islands, Nauru, Niue, Palau and Tuvalu. These islands are made up of low-lying atolls.

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