Climate Finance and Adaptation Needs In Pacific Island Countries

Fabien Gonguet, Xuehui Han, Choonsung Lim, To-Nhu Dao and Saraf Nawar

No 2026/083, IMF Working Papers from International Monetary Fund

Abstract: Pacific Island Countries (PICs) face acute and rising climate adaptation needs due to high exposure to sea‑level rise, natural disasters, and structural vulnerabilities associated with small size and geographic remoteness. This paper develops a unified framework to produce the first region‑wide, internally consistent estimates of climate adaptation financing needs for PICs. A metadata analysis harmonizes country‑level assessments into comparable annual measures, while a complementary machine‑learning approach generates synthetic estimates for data‑deficient countries using economic, geographic, and climate‑vulnerability indicators, subject to differences in sectoral definitions and coverage embedded in the underlying source studies. The results show that adaptation needs are large, highly uneven across countries, and exceptionally high relative to GDP, particularly for atoll nations where physical risks dominate. The paper also examines climate adaptation finance flows to PICs over the past decade, distinguishing between commitments and estimated disbursements, and finds that current financing levels fall well short of projected needs. Disbursement ratios vary substantially across financing channels, reflecting differences in institutional capacity and project implementation. Taken together, the findings highlight substantial adaptation financing gaps in PICs and underscore the importance of strengthening institutional capacity and improving the effectiveness and accessibility of climate finance mechanisms.

Keywords: Climate Adaptation; Pacific Island Countries; Financing Needs; Climate Finance Flows; Meta-data Analysis; Machine Learning (search for similar items in EconPapers)
Pages: 38
Date: 2026-04-24
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