Meeting the Sustainable Development Goals in Small Developing States with Climate Vulnerabilities: Cost and Financing
IMF Working Papers, March 5, 2021
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- Meeting the Sustainable Development Goals in Small Developing States with Climate Vulnerabilities: Cost and Financing
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Bibliographic details
- Authors: Dinar Prihardini, Aleksandra Zdzienicka
- Published: March 5, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513571577.001
Overview
- Authors: Dinar Prihardini, Aleksandra Zdzienicka
- Publication date: March 5, 2021
- Core premise: Small Developing States (SDS) face substantial challenges in achieving sustainable development due to small size, limited economic diversification, and high vulnerability to climate change and natural disasters. Meeting SDGs in SDS requires simultaneous advancement of development objectives and building climate resilience, which entails substantial additional costs that are difficult to finance.
- Objective of the work: Adapt the IMF SDG Costing methodology to capture the unique characteristics and challenges of climate-vulnerable SDS and analyze financing options, including estimating domestic tax potential and the possibility of accessing ‘climate funds.’
Methodology adaptation and analytical focus
- Adapts the IMF SDG Costing methodology to:
- Capture unique characteristics of climate-vulnerable SDS.
- Integrate climate resilience considerations with sectoral SDG costing.
- Zooms into financing options by:
- Estimating domestic tax potential.
- Discussing access to ‘climate funds.’
Key findings and substantive points
- Structural constraints:
- SDS face challenges related to small size and limited diversification of their economies.
- SDS are among the most vulnerable countries to the impact of climate change and natural disasters.
- Cost and finance tradeoff:
- Meeting sustainable development goals goes hand-in-hand with building climate resilience.
- Additional costs to meet both development and resilience objectives are substantial and difficult to finance.
- Financing analysis highlights:
- Domestic tax potential is examined as a component of financing strategy.
- Accessing ‘climate funds’ is discussed as an external financing avenue.
Policy implications and recommendations (as emphasized in the source)
- Integrate climate resilience into SDG planning and costing for SDS to reflect concurrent development and resilience objectives.
- Assess and mobilize domestic tax potential as part of financing strategies for SDG and resilience investments.
- Explore possibilities for accessing ‘climate funds’ to help finance the substantial additional costs associated with building climate resilience while pursuing SDGs.
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- Working Paper