Small Islands on the Frontlines of Climate Change
Rotterdam, the Netherlands – On October 7, 2025, the Global Center on Adaptation (GCA) unveiled its most comprehensive report to date: State and Trends in Adaptation 2025: Small Island Developing States (SIDS). The report presents a sobering analysis of the climate risks, economic implications, and actionable adaptation solutions for the world’s 39 island nations.
Without swift and widespread adaptation, the cumulative climate-related damages to these vulnerable economies could reach an alarming US$476 billion by 2050. This figure equates to multiple years of national output for some SIDS. Despite the urgency, current international adaptation finance for SIDS averages just over US$2 billion annually—barely 0.2% of global climate finance.
The Call for Scaled-Up Climate Finance
GCA is advocating for a significant increase in funding, urging the global community to raise contributions to at least US$12 billion per year. This amount reflects the needs identified by SIDS themselves in their National Adaptation Plans (NAPs) and Nationally Determined Contributions (NDCs). Notably, this figure represents only 1.2% of global climate finance and approximately 4% of global Overseas Development Assistance (ODA).
H.E. Hilda Heine, President of the Republic of the Marshall Islands, emphasized the urgency, stating, “We face rising seas, threats to food and water security, and we are running out of time. Adaptation remains our most urgent priority. It is our first line of defence.”
She also highlighted the systemic barriers SIDS encounter in accessing climate finance, including protracted approval processes, rigid eligibility rules, and risk standards that unintentionally exclude island nations. “Climate finance mechanisms were not designed with SIDS in mind,” she noted. “But the report also brings hope: Adaptation in SIDS is highly cost-effective.”
Adaptation as a High-Return Investment
The GCA report underscores that adaptation is not just necessary—it is also economically sound. For every dollar invested, up to US$6.50 can be saved in avoided damages and stimulated economic growth. Strategic investments in clean energy, resilient transport, climate-smart agriculture, and efficient water systems can significantly reduce economic losses and improve health and productivity.
Macky Sall, Honorary Chair of the GCA and former President of Senegal, echoed these findings: “Small island nations, whether in Africa, Asia-Pacific, or the Caribbean, have done nothing to cause climate change but face far outsized impacts. Financing of US$12 billion a year is achievable if we match ambition with solidarity.”
Sall advocated for a shift from loans to grants, improved access to concessional financing, and the deployment of innovative financial instruments such as debt-for-resilience swaps and blue and green bonds.
Innovation and Practical Solutions
The report draws on successful adaptation models, particularly from Africa through the African Adaptation Acceleration Program (AAAP). These offer scalable lessons for other SIDS and coastal nations. The analysis also reveals that 44% of international adaptation funding to SIDS comes as debt, burdening already strained national budgets. Moreover, just ten SIDS receive 67% of tracked adaptation finance—often with little correlation to actual vulnerability.
Professor Patrick V. Verkooijen, CEO of the GCA, emphasized the need for smarter investments. “Small islands should be a first line of defense against the climate crisis, not a point of failure,” he said. “This report provides a practical roadmap for SIDS and for partners ready to finance solutions at speed and scale.”
Targeted Solutions for Key Sectors
The report outlines a focused adaptation agenda for sectors critical to SIDS economies, such as tourism and fisheries. These industries are under threat from coastal erosion, coral bleaching, and extreme weather. Solutions like mangrove and coral reef restoration offer natural protection, reduce disaster-related losses, and support local livelihoods. For instance, in Fiji alone, geospatial analysis has identified areas where restoration could cut annual flood damage by more than US$47 million by 2050.
Strengthening Climate Intelligence
Only 39% of SIDS currently have multi-hazard early-warning systems, and global sharing of climate and weather data remains critically underdeveloped. Less than 10% of the required surface observations are being shared internationally. The report recommends scaling up systems like the UN’s Early Warnings for All initiative and the Systematic Observations Financing Facility to improve climate services in agriculture, water, health, and disaster management.
Governance and Institutional Readiness
All SIDS have submitted NDCs, and around 60% have created an enabling environment considered “good or better” for adaptation investments. However, many have yet to fully cost their sectoral needs, and monitoring systems remain weak. The GCA urges a “community-to-cabinet” approach that integrates local knowledge, strengthens institutions, and embeds adaptation across national development strategies.
A Global Imperative
In a joint statement, Jamal Saghir and Ede Ijjasz-Vásquez, Co-Directors of the report, concluded, “The SIDS finance gap is small in global terms but existential for island economies. Closing this gap requires grant-based finance, blended investment models, and debt relief that prioritizes resilience.”
They added that by taking these steps, small islands can transform vulnerability into opportunity and build a sustainable future despite the adversities posed by climate change.
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