Fiji: Selected Issues

This Selected Issues paper explores impact of climate change and sea level rise in Fiji. With growing climate challenges ahead, the explicit consideration of costs and benefits of alternative adaptations in coastal management, as well as in all other sectors, can help contain fiscal costs, maximize the impact of international finance, and boost the overall welfare impact of adaptation for the population of Fiji. With many competing needs, the government must carefully allocate resources across all possible uses, including adaptation to climate change, while considering the distributional effects of its programs. The government can prioritize adaptation policies with positive externalities, by removing the market imperfections and policies that hinder efficient private adaptation, and by ensuring a just transition. Despite limitations, cost-benefit analysis (CBA) can play an important role in helping decision makers to consistently collect, aggregate, and compare information on public adaptation projects. The CBA, complemented by analysis and correction of distributional impacts, can help decision makers maximize overall social welfare by avoiding wasting scarce resources.