By Jayvee Vallejera
Claiming Guam had a good track record in managing government funds, Gov. Lou Leon-Guerrero said the territory could play a bigger role in easing the way for small island jurisdictions in the Pacific to access funds to help combat the impact of climate change.
“We are uniquely positioned to lead the way in strengthening financial systems, to access and manage these funds and we have a proven track record to back this up,” the governor said, speaking at Thursday’s webinar on climate change finance and the hurdles that impede access to those funds,
The online session, titled Climate Finance for Sub-National Island Jurisdictions and Overseas Territories, was hosted by Island Innovation, featuring expert presentations on "innovative financing solutions, strategic partnerships, and policy frameworks designed to address the challenges facing the region."
Before becoming governor, Leon Guerrero was the CEO of the family-owned Bank of Guam, which holds government of Guam accounts.
During the UN's COP29 climate change conference in Baku, Azerbaijan in November last year, rich nations raised the contribution pledge from $100 billion to $300 billion annually to the global fight against climate change.
Leon Guerrero said the Pacific island region alone needs at least $1 billion a year to fund adaptation projects.
But while rich nations have made big promises to help vulnerable islands, Leon Guerrero said accessing those funds is an uphill battle.
“But what are we actually getting? A mere $220 million a year, just a tiny fraction of the $100 billion in climate finance promised over the years,” she said.
In February, Conservation International and the Pacific Community secured a $107.4 million grant from the Green Climate Fund to assist 14 Pacific island countries in adapting and mitigating the impact of climate change on tuna stocks. GCF grant, which represented one of the largest climate funding grants to the Pacific region, has also attracted $49.4 million in co-finance for the $156.8 million program.
Leon Guerrero said the conditions placed on the funds are often impossible for small island governments to meet. “This is where Guam can help,” she said.
Leon-Guerrero said Guam successfully administered over $2 billion in federal relief through the American Rescue Plan during the Covid-19 pandemic.
She also said the University of Guam has effectively managed over $100 million in grants and endowments.
“Our government has clean financial audits year after year. Guam is the only U.S. territory with an investment-grade credit rating, proving our fiscal stability and accountability,” she added.
Leon Guerrero said Guam also has the expertise and people with skills needed to unlock climate adaptation funds for the region.
She said Guam is working with its Pacific neighbors and organizations to pool resources and strengthen financial capacity.
“We are not doing this alone,” she said.
Speaking of her former role as CEO of the Bank of Guam, Leon-Guerrero said she knows how critical it is to secure and properly manage financial resources to protect communities and that fighting the impacts of climate change requires a lot of funding.
“[It] takes resources, a lot of resources,” she added.
Leon-Guerrero said that climate change is not some distant future problem, but is happening now. “It threatens our homes, our livelihoods, and our survival. Here in Guam, we see the impacts firsthand. Coastal erosion, typhoons that are growing stronger and more frequent, and drinking water sources that are being strained by drought.”
Other island nations in the Pacific are even being advised to move their hospitals inland to avoid flooding, she added.
Despite these ongoing threats, many Pacific island communities are left to face rising seas, stronger tidal waves, and worsening droughts on our coast. “That's not right, and it has to change.”
Citing an International Monetary Fund statement that climate financing is not moving fast enough to meet the urgent needs of Pacific Island nations, Leon-Guerrero said the IMF warns that the slow development of financial capacity in the region does not match the rapid threats.
This is where Guam could come in, she said.
By taking advantage of Pacific strengths to tackle Pacific challenges, Leon-Guerrero said one of these strengths is Guam's financial ecosystem.
“We are home to the Pacific Islands Development Bank, where Micronesian leaders sit on the board. Expanding its role to merge and manage client and application funds would be a game-changer,” she said, adding that Guam’s banking sector with FDIC-insured local and regional banks and a pool of insurance providers ensure financial security and oversight.
“This financial foundation is what makes Guam an ideal hub for climate finance management,” she added.
Leon-Guerrero also called for a reform in the funding criteria for climate change financing to meet the unique challenges of small island nations and territories.
Currently, climate change financing criteria favor large countries, leaving remote islands and atolls with small populations unable to access the funds.
“It is unrealistic to expect these communities to meet the same application and reporting requirements as a country like Australia or Japan,” the governor said. “As Pacific island leaders, we must advocate for the mechanisms that work for us. One is to allow small and remote islands to actually use the money available to them.”
She said Guam is also taking bold steps in climate action and coming up with innovative ways to bring climate funding to Guam and the region.
“The reality is, we cannot wait for the world to solve the crisis for us. We must take action now,” she added.
That includes advocating for friendly climate finance policies, empowering local financial and environment experts, and taking advantage of Guam’s strengths in a banking and government to become a regional leader in climate adaptation funding.
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