IMF国际货币组织全球-Federated-States-of-Micronesia_Climate-Change-Policy-Assessment_70页_1mb

Climate Change Policy Assessment for the Federated States of Micronesia (FSM)

Core Content Overview

This report, titled IMF Country Report No. 19/292, presents a Climate Change Policy Assessment (CCPA) for the Federated States of Micronesia (FSM), focusing on the macroeconomic and fiscal implications of climate change and natural disaster risks. It is a joint initiative by the IMF and World Bank, aimed at assisting small states in understanding and managing the economic impacts of climate change while ensuring long-term fiscal and external sustainability.

The assessment highlights the urgent need for FSM to strengthen its climate response strategies, particularly in adaptation and risk management, as it faces significant climate risks and the end of U.S. financial support under the Compact Agreement in 2023. The report outlines key recommendations and priorities for both short-term and medium-term actions.

Main Recommendations and Key Points

General Preparedness

• Improve climate data collection and use, including the costs of high and low intensity disasters and disaster response expenditure.
• Develop a comprehensive Disaster Resilience Strategy (DRS) in cooperation with the IMF, World Bank, and other development partners.
• Prepare for the end of Compact assistance by strengthening capacity for weather services and emergency management at both state and national levels.

Mitigation

• Continue expanding renewable power generation to meet its Nationally Determined Contribution (NDC) under the Paris Agreement.
• Introduce a moderate excise tax on road fuels and consider an excise tax or feebate system for passenger vehicles to promote fuel efficiency.

Adaptation

• Develop an overarching National Adaptation Plan that reconciles the Green Climate Fund (GCF) workplan and the Infrastructure Development Plan (IDP).
• Undertake hazard mapping for key infrastructure to identify areas vulnerable to climate and disaster risks.
• Address capacity shortages to accelerate infrastructure investment and integrate climate adaptation into sectoral strategies.
• Develop and enforce a land use policy and national building code that account for climate risks and include energy efficiency requirements.

Financing

• Mobilize external grant financing to avoid further worsening of fiscal and debt sustainability.
• Speed up the implementation of adaptation investment projects.

Risk Management

• Continue developing contingency financing options and consider regional parametric insurance.
• Formalize a national disaster risk financing strategy, including an inventory of public assets, clarification of budget processes, and engagement with development partners on financing modalities for a risk buffer.
• Clarify regulations for accessing disaster relief funds at the conclusion of the Compact Agreement term.
• Explore insurance options for key government infrastructure and developing insurance markets for housing, flood risk, and agriculture.

National Processes

• Improve the chart of accounts, budget classification, and presentation to identify and track mitigation and adaptation spending.
• Establish a standard methodology for investment project appraisal and selection, incorporating climate resilience into the screening and design process.
• Strengthen institutional and staff capacity in public investment and focus implementation resources on high-priority projects.

Key Information and Context

Climate Change Risks

• FSM is highly exposed to climate change and natural disaster risks, particularly due to its tropical climate and location in the typhoon belt.
• The Global Climate Risk Index (CRI) ranks FSM as the third most at risk among Pacific Island Countries (PICs) for the period 1998–2017.
• Natural disasters, such as Typhoon Maysak (2015), have caused up to 3.5% of GDP in damages and could lead to GDP reductions of up to 5 percentage points in the case of a major disaster.
• The fiscal cliff in FY2024 is expected to result in a deficit of around 41.5% of GDP, due to the expiration of Compact grants and the lack of alternative funding sources.

Current Preparedness

• FSM has institutions and plans for disaster response, including the Disaster Relief Assistance Act (1989) and the Nation-Wide Integrated Disaster Risk Management and Climate Change Policy (2013).
• The Department of Environment, Climate Change and Emergency Management (DECEM) was established in 2018 to enhance climate adaptation and disaster management.
• Despite these efforts, a comprehensive National Adaptation Plan and DRS are still missing, creating a significant policy gap.

Funding and Support

• FSM has a FSM Trust Fund (57% of GDP in FY2019), but it is not available for drawdown until 2030.
• The Compact Agreement with the U.S. provides annual grants, contributions to the Compact Trust Fund, and disaster relief support from USAID and FEMA.
• The post-2023 context is uncertain, and FSM is not well prepared for this transition, highlighting the need for alternative financing mechanisms and capacity building.

Conclusion

FSM has made progress in climate change mitigation and adaptation planning, but implementation remains limited, especially in adaptation. The end of U.S. financial support in 2023 poses a significant challenge, requiring increased domestic revenue mobilization, private sector participation, and international support. The report emphasizes the need for fiscal sustainability, effective risk management, and improved public financial management (PFM) to support long-term climate resilience and economic stability.