Energy prices in the vast majority of SIDS are among the highest globally, in some cases electricity cost is 500 percent more than in the US, primarily as a result of the dependence on imported petroleum fuels. Consequently, the energy sector in the vast majority of SIDS is the principal source of economic vulnerability.
Sustainable development in SIDS has to be built on a sustainable energy foundation. Despite international support for implementation of the Barbados Programme of Action (BPoA) for the Sustainable Development of SIDS and the Mauritius Strategy for the Further Implementation of the BPoA (MSI), there is currently no mechanism that is in place to help SIDS transform their energy sector. There is also no mechanism to facilitate the sharing of experiences, pursuing of mutual goals, and sharing resources across regions. So despite having, in the vast majority of cases, abundant endowments of renewable energy resources SIDS remain dependent on imported fuels. High energy cost in SIDS is a combination of small volume, high transportation cost and low levels of energy efficiency. SIDS DOCK is developed to be the institutional mechanism that will support transformation of their energy sectors.
Even though SIDS have very low emissions, estimated at less than 0.05 percent of global emissions, SIDS are already being negatively impacted by changing climate and the science which shows serious long-term consequences if greenhouse gas (GHG) concentration remain above 350 parts per million (ppm) in the atmosphere. With current GHG concentration well above 350 ppm, SIDS face the realization that tens of millions would be displaced from sea level rise. And, more intense weather would cause hardship to the vast majority of the population in the SIDS.
Adapting to the changing climate and rising sea level is already a major economic cost to SIDS; additional changes in climate and increases in seal level rise will require increasing amounts of financial resources. With many SIDS already highly indebted, reducing outflows of funds to pay for energy imports represent the best option of generating additional resources to address climate change. Several international agencies have estimated adaptation costs for developing countries that range from a high of USD 86 -109 billion a year, to a low of USD 4 billion a year to adapt to climate change, and it is also estimated that to take no action could cost over 20 per cent of global GDP annually.