Small island developing states (SIDS) are a special case for sustainable development and climate action due to the acute challenges they face. SIDS tend to share unique structural constraints which are often beyond their control, including small populations, remoteness to markets, high transaction costs, and vulnerability to climate change – despite bearing little to no responsibility for it.

Their economies are small, undiversified and usually heavily dependent a single sector like tourism. Often this is combined with a narrow revenue base which limits fiscal space for capital investment, resulting in high debt levels. These challenges have become more acute in the face of external shocks like the current COVID-19 pandemic.

The scale of their structural issues means that existing resources and capacities of SIDS are insufficient to overcome such economic and climate challenges. As such, SIDS are particularly dependent on official development assistance (ODA) or international aid to build resilience and support sustainable development. In addition, access and availability of adequate and sustainable climate finance is a priority for SIDS to address climate change impacts and achieve their Nationally Determined Contributions (NDCs) or national climate commitments under the Paris Agreement.