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The inextricable links between climate change and sustainable development have been increasingly recognised over the past decade. In 2007, the Intergovernmental Panel on Climate Change (IPCC)1 concluded with very high confidence that climate change would impede the ability of many nations to achieve sustainable development by mid-century and become a security risk that would steadily intensify, particularly under greater warming scenarios. Article 4.8 of the United Nations Framework Convention on Climate Change (UNFCCC) lists several groups of countries that merit particular consideration for assistance to adapt to climate change “especially: (a) small island countries, (b) countries with low-lying coastal areas, c) countries with areas prone to natural disasters.” Small Island Developing States (SIDS) have characteristics which make them particularly vulnerable to the effects of climate change, sea level rise (SLR) and extreme events, including: relative isolation, small land masses, concentrations of population and infrastructure in coastal areas, limited economic base and dependency on natural resources, combined with limited financial, technical and institutional capacity for adaptation.2

The nations of CARICOM16 in the Caribbean together with Pacific island countries contribute less than 1% to global greenhouse gas (GHG) emissions (approx. 0.33%17 and 0.03%18 respectively), yet these countries are expected to be among the earliest and most impacted by climate change in the coming decades and are least able to adapt to climate change impacts. These nations’ relative isolation, small land masses, their concentrations of population and infrastructure in coastal areas, limited economic base and dependency on natural resources, combined with limited financial, technical and institutional capacity all exacerbates their vulnerability to extreme events and climate change impacts. Stabilising global GHG emissions and obtaining greater support for adaptation strategies are fundamental priorities for the Caribbean Basin and Pacific island countries. CARICOM leaders recently unveiled their collective position that global warming should be held to no more than 1.5°C19 and continue to develop a Climate Change Strategic Plan. The Pacific island countries have expressed their priorities for addressing climate change regionally through the Pacific Leaders’ Call to Action on Climate Change20 and the Pacific Islands Framework for Action on Climate Change 2006-2015.21

While development of natural non living resources such as minerals and water can better the lives of Pacific islanders, it needs to be managed to ensure a safe and healthy environment. And as any resource manager today knows, to manage resources we need to manage the people who use them. A number of projects in the Pacific have recently turned to economic tools to help manage the way people use non living natural resources. In this paper selected case studies will be used to: ? demonstrate the different ways that economic tools are helping to improve the governance of a variety of non living natural resources in the Pacific: and ? consider the prospects for using these tools more generally in the Pacific in the future. To highlight the ways in which economic tools can improve the governance of non living natural resources, a simple project cycle is used. A number of case studies including the following are used to show how economic tools are improving management of non living natural resources in different sectors including water, disasters, oceans., minerals and energy. Details of case sftidies are provided in the paper accompanying the presentation. Following discussion of the case studies, the implications for using economic analysis to support the management of 11011 living resources in the Pacific is discussed.

The Fiji Department of Energy through its rural electrification programme developed two community-based biofuel projects in Vanua Balavu (villages of Lomaloma, Naqara and Sawana) and Welagi in Taveuni with funding assistance provided by the French Government through the Secretariat of the Pacific Community. The primary objective of the projects was to use coconut oil to generate electricity for the communities. The Vanua Balavu Biofuel Project was installed in April 2000 and the Welagi Biofuel Project was installed in July 2001.