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While the Republic of Palau, with over 2,000 mm of rainfall annually, is not subject to desertification, we have felt the effects of global climate change, and of land degradation due to human activities. Two effects of climate change are of particular concern to Palau: drought due to the El Nino/ENSO phenomenon; and sea level rise. The Republic of Palau is additionally threatened with land degradation due to road building, agricultural expansion, and various other land-clearing and forest cutting activities. Economic development needs to be undertaken in a manner, which will not reduce the ability of future generations of Palauans to benefit from Palau's rich natural resources.