PAYNE INSTITUTE COMMENTARY SERIES: VIEWPOINT

By Daniel Flores, Julia Eichhorn, Jamal Saghir, and Ede Jorge Ijjasz-Vasquez

October 13, 2025

Overview

Ramping up climate finance flows for adaptation is critical to addressing the irreversible impacts of climate change, but this alone will not be enough to protect (SIDS). Planning is crucial when making strategic choices for policies and programs for climate change adaptation, particularly in the face of constrained budgets. Climate change is a complex and multifaceted challenge that affects various sectors and all of society. Developing effective adaptation strategies and plans requires careful consideration of these interconnections and potential trade-offs. A structured approach is needed to ensure that different policies are consistent and complementary, avoiding conflicts or duplication of efforts and ensuring coordination among actors.

The latest 2025 State and Trends in Adaptation report by the Global Center on Adaptation (GCA) features an assessment of national strategic adaptation documents related to the United Nations Framework Convention on Climate Change (UNFCCC) prepared by governments of SIDS across three regions: the Caribbean; the Pacific; and the Atlantic, Indian Ocean, and South China Sea (AIS)[1]. A methodological framework was developed, focusing on five key indicators: institutional arrangements; development of sectoral plans; estimates of finance needs; integration of adaptation with disaster risk reduction (DRR) efforts; and monitoring and evaluation (M&E) of adaptation goals.

This commentary presents an overview of the status of strategic adaptation document submissions across SIDS and the overall level of environments for adaptation investments. It unpacks the results for each indicator, with some country examples provided for main findings. Recommendations stemming from this analysis are then presented.

How Prepared Are SIDS When it Comes to Adaptation Planning?

SIDS have made good progress in developing national strategies for adaptation to incorporate into their Nationally Determined Contributions (NDCs), National Adaptation Plans (NAPs), and National Adaptation Communications. As of January 2024, all 35 SIDS[2] considered in this analysis had submitted at least the first version of their NDC, underscoring their commitment to global climate action in response to the climate crisis and as per the Paris Agreement. Ten had submitted a NAP, and eight an Adaptation Communication.

The breadth and depth of these strategic documents, and the quality of the enabling environment to support adaptation investments, varies. About 60% of the 35 SIDS assessed have a good or better environment for adaptation investments. Furthermore, 5 out of 35 SIDS included in the study can be classified as having best practices, including: clear institutional mandates; identified priority sectors; estimated adaptation costs; indicative timelines; and specific adaptation goals (Figure 1). These countries are ready to absorb financing and implement adaptation programs at scale. Many other SIDS have good practices in some of the above elements. There are enough good examples of best practices in each region to support every country in upgrading its adaptation strategies and planning.

 Figure 1. Countries’ level of enabling environment for investment readiness

Source: State and Trends in Adaptation Report 2025, Strategy, Planning, and Governance Chapter authors.

The ND-GAIN Index[3] comprises the ND-GAIN vulnerability score, which measures a country’s exposure, sensitivity, and ability to adapt to the negative impacts of climate change (lower scores mean lower vulnerability), and the ND-GAIN readiness score, which is a country’s ability to leverage investments and convert them into adaptation actions considering three components – economic readiness, governance readiness, and social readiness (higher scores mean higher readiness).

For this analysis, the SIDS ND-GAIN readiness scores[4] were compared with GCA’s investment readiness score to indicate the importance of attracting adaptation finance flows into the SIDS to reduce vulnerability and increase resilience to climate change impacts. To put the scores into context, the average ND-GAIN readiness score is 0.33 for the Caribbean, 0.38 for AIS, and 0.42 for the Pacific, which indicates that all the regions have low readiness to leverage investments and convert them into adaptation actions. Additionally, the average ND-GAIN vulnerability score is 0.42 for the Caribbean, 0.51 for AIS, and 0.55 for the Pacific, which indicates that all the regions have medium-high to high vulnerability to climate change and other global challenges.

Based on our analysis, countries highlighted in red (Figure 2) indicate both low readiness to adapt to the effects of climate change and a low level of progress in strategic plans for adaptation.[5] These results underscore the critical importance of directing financial resources and investments towards programmatic approaches that build long-term capacity in adaptation, as well as raising awareness to strengthen the status of the strategic planning documents for adaptation that increase investment readiness and lower vulnerability.

The countries marked in orange, similarly to those in the red category, would benefit from financial support, capacity-building initiatives, and awareness-raising campaigns for adaptation. Finally, countries highlighted in green have taken significant strides in their readiness for adaptation investment. However, it is important to note that even these countries exhibit a higher vulnerability and lower readiness compared to the global average. Hence, it remains imperative to channel adaptation finance flows and investment to these nations to increase their resilience and facilitate effective adaptation to climate change by bolstering programmatic approaches that build long-term capacity.

Figure 2. ND-GAIN Index readiness scores by adaptation investment readiness analysis categories

Source: State and Trends in Adaptation Report 2025, Based on ND-GAIN Scores 2024 and Strategy, Planning, and Governance Chapter authors.

Five Key Indicators

Institutional Arrangements

Despite significant progress in institutional development, just over half of SIDS have a mature institutional framework for climate adaptation action that involves a lead ministry or institution to drive the country’s adaptation efforts along with subsidiary branches and other relevant ministries, such as those responsible for the environment, agriculture, water resources, finance, and disaster management. Regionally, evidence of strong institutional arrangements can be seen in 60% of Caribbean countries, 57% of AIS countries, and 46% of Pacific countries.

By establishing a robust institutional framework, countries can harness greater donor confidence, leading to increased mobilization of financial resources. Leading the way in relation to this is Papua New Guinea (PNG) in the Pacific. The country’s Climate Change Management Act (CCMA) 2016 serves as the principal regulatory framework for climate action. It mandates sectoral entities to integrate adaptation into planning and budgeting through climate-compatible action plans. At the national level, the CCMA forms the foundation for the NAP, guiding climate-compatible development and empowering priority sectors to implement adaptation action plans. The Climate Change and Development Authority (CCDA) is PNG’s mandated body for climate matters under the CCMA. The CCDA coordinates climate policies and promotes climate-compatible growth. It also ensures compliance with international climate agreements such as the UNFCCC and the Paris Agreement, establishing PNG’s National Designated Authority (NDA) for the UNFCCC. Several key departments and national agencies collaborate with the CCDA to implement the NAP across mandated sectors. At the subnational level are the primary legal instruments that help to promote the integration and coordination of climate change initiatives into development objectives and projects.

Development of Sectoral Plans

GCA’s review revealed that countries need to outline their priority sectors more clearly in their strategic adaptation documents. Three of the 35 SIDS analyzed did not identify priority sectors in their strategic adaptation documents. Among the 32 that did, only 13 provide measurable goals to be achieved within their respective sectors. By prioritizing vulnerable sectors, SIDS can develop targeted adaptation strategies and measures that address specific vulnerabilities. Such tailored approaches ensure that adaptation investments are effectively utilized, maximizing their impact, and promoting resilience in the areas that need it the most.

By establishing clear sectoral goals that are time-bound, have clear ownership by a responsible body, and provide financial estimates, countries are able to give a strong signal of their commitment to allocating adaptation investments efficiently. Among the countries analyzed, Grenada, Saint Vincent and the Grenadines, Palau, and Tonga stood out for having well-defined priority sectors and goals that are time-bound, demonstrate ownership, and include financial requirements – successfully communicating clear sectoral adaptation plans to the international community. The Dominican Republic has a list of the adaptation initiatives in process or to be carried out at the national and regional level, providing the progress status, the institution supporting the efforts, and a small description of its activities, dividing them by type (project, technical support, and study). Furthermore, the country estimates that an upward investment is required to carry out its NDC adaptation component of about $9 billion.

Estimates of Financial Needs

The analysis indicates that many SIDS need to prioritize assessing the costs for carrying out their adaptation actions, as only 10 of the 35 SIDS quantified their adaptation needs estimates. Four of the SIDS assessed did not mention any financial assistance or need in their documents, and 18 provided a general statement acknowledging the requirement for financial assistance to implement their adaptation goals. While these SIDS acknowledged the need for funding, they did not specify the exact amounts or details. Three SIDS explicitly outlined the amount of funding they required to implement their NDC or NAP commitments. This includes financial needs for both mitigation and adaptation actions.

Notably, 10 SIDS excelled in providing detailed information regarding the financial resources needed to implement their adaptation goals, outlining the unconditional and conditional funds needed per sector or adaptation activity. Providing conditional and unconditional financial needs per activity or sector can give investors more certainty about the country’s commitments to advance the adaptation agenda.

Calculating the financial requirements of adaptation components of NAPs allows countries to effectively communicate the resources needed to implement their adaptation goals. This information is crucial for attracting support and mobilizing resources from international donors, development agencies, and financial institutions. Adding conditional and unconditional financial needs in climate documents not only helps align funding priorities but can also encourage domestic resource mobilization. Conditional financial needs refer to the financial resources that a country requires to implement its climate change mitigation and adaptation actions – contingent upon receiving external support. Unconditional financial needs represent the financial resources that a country requires to implement its climate change actions regardless of external support.

Some SIDS outline their specific financial requirements by presenting cost and need estimates for the implementation of sectoral adaptation goals. Notable examples include the Dominican Republic, Grenada, Mauritius, Palau, St. Kitts and Nevis, and Tonga. However, some countries adopt a different strategy, delineating adaptation cost and need estimates and categorizing them into conditional and unconditional funding needs. This approach is exemplified by Haiti and Mauritius. Both methodologies serve to communicate the general financial demands for adaptation to the international community. Nevertheless, a hybrid approach, combining needs estimates based on conditionality and sectoral considerations, offers the most comprehensive insight into the financial requirements for effective adaptation strategies, as in the case of Vanuatu and Belize.

Notably, seven SIDS have established finance itself as a priority sector for adaptation, inclusive of sectoral goals with financial estimates. Grenada, for example, highlights adaptation financing as a priority area, providing success indicators and an approximate budget estimate, with the goal of applying successfully for project financing to ensure external climate finance support to its adaptation process. Vanuatu is committed to identifying innovative sustainable financing mechanisms and obtaining National Implementing Entity accreditation from the major climate change funds. Kiribati is focused on strengthening the Climate Finance Unit and broader national capacity, including non-governmental organizations, to further engage with key multilateral sources and climate finance mechanisms to provide efficient and directed support for climate change adaptation, mitigation, and disaster risk management activities.

Integration of Adaptation with Disaster Risk Reduction Efforts

Annually, natural disasters can cost SIDS up to 8% of their entire gross domestic product (GDP).[6] In the aftermath of disasters, SIDS require huge financial resources for reconstruction efforts, which are often covered through external borrowing, further perpetuating the debt crisis faced by many island nations. Some natural disasters have a smaller impact on monetary damage indicators and physical capital but have dire consequences for the health and well-being of the population. A drought, for example, may not cause physical damage to infrastructure, but it may result in increased food insecurity, malnutrition, lower productivity, loss of income, and rising poverty levels.[7]
Climate change adaptation and disaster risk reduction (DRR) agendas overlap in several ways. Risk reduction cannot occur without the use of climate data; equally, successful climate change adaptation depends on risk reduction. For this reason, it is crucial for countries to integrate DRR into their adaptation planning documents. Combining resources and efforts, rather than addressing disasters and climate change separately, can lead to greater efficiency and impact.

Notably, 31 SIDS in the study had tangible links between their DRR initiatives and their adaptation strategies – representing 100% of the SIDS in AIS, 93% in the Caribbean, and 76% in the Pacific. Of these, 19 communicated DRR as a priority sector itself, and 8 identified integrated DRR adaptation measures or synergetic goals within priority sectors.

Monitoring and Evaluation of Adaptation Goals

Twenty-two SIDS across the three regions have either only signaled their intent to develop an M&E system or have not provided evidence of initiating the process at all (Figure 3). Seven countries in the Caribbean region and two in the Pacific have communicated a basic plan for establishing an M&E framework in the future. Greater investment in developing M&E systems across SIDS is needed.

Establishing and communicating indicators to measure the success of adaptation efforts promotes transparency, minimizes potential bias, and ensures a more inclusive and balanced approach to assessing and reporting on climate adaptation efforts. While progress in establishing M&E systems for adaptation remains ongoing, notable examples of development should be highlighted. PNG, Suriname, Palau, and Grenada communicate detailed plans inclusive of indicators for measuring the progress of each goal in their strategic adaptation documents.

Figure 3. Status of monitoring and evaluation systems in NDCs, NAPs, LTSs, and adaptation communications by number of SIDS for each region

Source: State and Trends in Adaptation Report 2025, Strategy, Planning, and Governance Chapter authors. 

Recommendations

Enhance institutional arrangements for robust coordination and partnership capacity

The inclusion of multiple levels of government (national to local) and strengthened regional partnerships between SIDS is crucial for developing robust institutional arrangements for coordinated and effective adaptation planning and implementation. Investing in and developing institutional arrangements that do not only rely on the Ministry of Environment but also include crucial ministries such as Finance and Planning, which play a central role in the strategic directions and priorities for adaptation action at scale, is necessary to attract and disburse adaptation finance from the international community. 

Strengthen M&E systems for effective and transparent tracking

M&E systems for adaptation policies and priorities in SIDS need strengthening. Regional cooperation can: help SIDS better understand climate risks and vulnerabilities; promote sharing of knowledge and data; and facilitate sharing of best practices for establishing systems linked to national institutions and processes. Developing and communicating indicators to measure the success of adaptation efforts can promote transparency and a more inclusive and balanced approach to assessing and reporting on climate adaptation efforts.

Quantify adaptation cost and need estimates for effective planning to gain greater access to adaptation financing

Adaptation plans require greater specificity of finance estimates, needs, and plans in order to secure international funding. It is crucial for SIDS to develop detailed cost estimates for financing adaptation actions and establish institutional arrangements capable of leading and implementing these actions effectively.

Strengthen considerations of all stages of disaster management – prevention, response, and post-disaster recovery – for a systematic response to climate shocks

More needs to be done to build robust multi-hazard and multisectoral risk governance. Training and awareness-raising will help strengthen the capacity and tools provided to local, provincial, and national authorities. It is vital that SIDS strengthen early warning systems within sectors to ensure timely responses to climate shocks such as drought, coastal and inland flooding, and wildfires. Finally, it is essential for SIDS to consider all three of the stages of disasters: prevention (i.e., early warning systems), disaster (i.e., evacuation and refuge plans), and post-disaster recovery phases (i.e., insurance and basic relief support).

References

[1] The chapter is based on analysis from a GCA report titled: Strategy and Planning to Redouble Adaptation in Small Island Developing States (SIDS): A Review. GCA, Rotterdam: https://gca.org/wp-content/uploads/2024/07/Strategy-and-Planning-to-Redouble-Adaptation-in-Small-Island-Developing-States-SIDS.pdf

[2] Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Cabo Verde, Comoros, Guinea-Bissau, Maldives, Mauritius, Sao Tome and Principe, East Timor, Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Niue, Palau, Papua New Guinea, Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.

[3] ND-GAIN Index: https://gain.nd.edu/our-work/country-index/rankings/

[4] Two SIDS do not have a ND-GAIN readiness score (Niue and Cook Islands), and five do not have a ND-GAIN vulnerability score (Cook Islands, Kiribati, Niue, St. Vincent and the Grenadines, and Tuvalu).

[5] The investment readiness measure is meant to be indicative and is based on the review of only UNFCCC-related documents. Countries can have other national adaptation strategic plans, which were not included in this analysis.

[6] United Nations. 2024. “About Small Island Developing States (SIDS).” https://sdgs.un.org/smallislands/about-small-island-developing-states#:~:text=SIDS%20Facts%20%26%20Figures,across%20more%20than%201%2C000%20islands

[7] Slany, A. 2020. Multiple disasters and debt sustainability in Small Island Developing States. UNCTAD, Geneva: https://unctad.org/system/files/official-document/ser-rp-2020d14_en.pdf

ABOUT THE AUTHORS

Daniel Flores
Senior Officer, Global Center on Adaptation
Daniel Flores is a Senior Officer at the Global Center on Adaptation who has coordinated and authored several chapters of the flagship report State and Trends on Adaptation. He has over seven years of experience working on sustainable development and climate change as a part of governmental, international, academic, private, and non-governmental organizations. He holds a master’s in science in Sustainability, Society, and the Environment from the University of Kiel.
https://www.linkedin.com/in/dfloresc/

Julia Eichhorn
Junior Finance Officer, Global Center on Adaptation
Julia  Eichhorn is a Junior Finance Officer at the Global Center on Adaptation who has coordinated and authored several chapters of the flagship report State and Trends on Adaptation. She is also a Research Consultant at Day of Adaptation. She holds a Master’s in Science in Environmental Psychology from the University of Groningen.
https://www.linkedin.com/in/juliaeich/

Jamal Saghir
Professor of Practice, Institute for the Study of International Development, McGill University
Jamal Saghir is a Professor of Practice at the Institute for the Study of International Development at McGill University, Montreal, Senior Fellow at the Payne Institute, Colorado School of Mines, Senior Advisor of Several international organizations, Board member of several organizations and former Director at the World Bank Group, Washington DC.
https://www.linkedin.com/in/jamal-saghir-96453097/
X (Twitter): @Jamalsaghir3

Ede Jorge Ijjasz-Vasquez
CEO and Founder, Eigen Impact Consulting
Ede Jorge Ijjasz-Vasquez is the CEO and Founder of Eigen Impact Consulting, Senior Non-resident Fellow at the Brookings Institution, Senior Advisor of Several international organizations, Board member of several foundations working on land rights, ESG and water and former Senior Director for Sustainable Development and Infrastructure at the World Bank Group, Washington DC.
https://www.linkedin.com/in/edeijjasz/
Twitter: @Ede_WBG

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