Nuku’alofa, Kingdom of Tonga – The Tonga Ministry of Finance (MoF) hosted an inaugural workshop on Modelling Climate Change Impacts on Growth and the Economy to inform just transition measures. 

Held from 14–16 October, the event brought together representatives from the National Reserve Bank of Tonga, the National Planning Division, the Tonga Statistics Department, and the Department of Climate Change. The concept of a “just transition” refers to ensuring a shift toward a low-carbon, climate-resilient economy that is fair and inclusive for all. 

Bringing together government technical experts, the workshop allowed participants to explore a new analytical framework that simulates how climate change has impacted, and will impact, Tonga’s economy. 

Climate-economic modelling leverages data and simulation to estimate how climate risks, such as rising sea levels and extreme weather events, may affect national economic growth, key sectors, and government revenues. Its purpose is to strengthen evidence-based policymaking and guide investment decisions by integrating climate impacts into national development planning.

The model offers both an economy-wide and sector specific analytical framework to understand how climate change affects economic growth in priority sectors such as agriculture, fisheries and tourism. It also provides an accessible and easy-to-use approach to simulate scenarios to inform short-term and long-term economic planning.

In her opening remarks, Acting Chief Executive Officer of the Ministry of Finance, Ms. ‘Aivi Fakahua, highlighted the importance of this technical workshop in the context of Tonga’s growing vulnerability to climate change impacts. She added that “the use of such tools will strengthen Government’s capacity to integrate climate-related risks into macroeconomic planning and policy formulation.” 

The workshop provided an opportunity to identify data needs and availability, explore national use cases, and assess how to integrate and institutionalise the tool with existing government systems. Participants discussed current modelling approaches in Tonga, and the potential for applying emerging global frameworks using national data. The tool will be adjusted to suit the policy entry points that have been identified by the Government and is expected to strengthen policy formulation, budgeting and investment planning.

Tonga is one of five countries in the Asia-Pacific region where consultations on the tool have been undertaken. The country is well positioned to benefit from this work, given the Government’s ongoing reforms integrating climate change and disaster risk into national budget, planning and implementation processes. The modeling tool complements ongoing climate budget work led by the Interministerial Technical Working Group in Tonga (comprising of the MoF, the Ministry of Climate Change and the Prime Minister’s Office) and supported by the UNDP Governance for Resilient Development in the Pacific (Gov4Res) Project.

The workshop concluded with a call to action to further localise the tool to Tonga’s context through continued collaboration, joint practical learning, and data sharing. This process will ensure the tool’s continued relevance and usability across government systems. Ministries that could not participate in the workshop are encouraged to reach out to the Ministry of Finance to express interest in engaging with the modeling tool and explore opportunities for future collaboration and capacity support.

The workshop was held in partnership with the UNDP Climate Finance Network and Gov4Res Project.