Anthony Albanese is in Palau this week for the annual Pacific Islands Forum and regional security is expected to top the agenda.
China is testing nuclear-capable missiles in the Pacific, prompting talk of a new regional agreement. The United States-Iran war has exposed a reliance on costly fossil fuels that is undermining Pacific economies.
And as the world comes perilously close to the Paris agreement’s 1.5C temperature goal, a record-breaking El Niño looms in the Pacific Ocean.
But the forum will be missing key leaders – Solomon Islands’ prime minister, Matthew Wale, made a shock departure, flying out of Palau just hours after arriving, in order to deal with a looming leadership challenge back home.
And the Kiribati president, Taneti Maamau, the Samoan prime minister, Laʻauli Leuatea Schmidt, and Vanuatu’s prime minister, Jotham Napat, are also not attending. It is unclear if Fiji’s prime minister, Sitiveni Rabuka, will be present.
Pacific nations will want Albanese to address the world’s key security threat – climate change. As president of negotiations of the Cop31 climate talks in November, Australia can work with the Pacific to keep 1.5C within reach and secure much-needed finance for island nations at the climate frontline.
China’s missile test
Since the second world war, the United States has maintained fortified bases in the Pacific and an unrivalled deep-water navy (the US also regularly tests long-range missiles in the region). However, China’s investment in military capabilities has challenged the status quo.
In July, China launched a nuclear-capable test missile that flew over multiple Pacific nations and hit waters close to Tuvalu’s exclusive economic zone.
This sparked calls for a new regional security agreement: Wale said China’s missile test was “not the act of a friend”.
Ironically, it was Solomon Islands that signed a security deal with China in 2022. This changed the security dynamics of a region long aligned with the US and Australia (notwithstanding concerns about nuclear testing and decolonisation).
Since then, Canberra has pursued a web of bilateral deals to shore up Australia’s place as Pacific security partner – first with Tuvalu (2023), then Naoero (formerly Nauru) (2024), Papua New Guinea (2025) and Vanuatu (2026). Discussions are ongoing with Tonga and Solomon Islands. The most recent agreement, an Ocean of Peace Alliance signed with Fiji in July, is a mutual defence pact that is open to other Pacific nations to join.
Canberra was already pursuing a treaty allowing for coordinated regional responses to disasters and other crises. China’s missile test may have opened the door for something more.
Renewables the solution to fuel crisis
The Middle East conflict has pushed the Pacific toward an energy crisis. About 80% of the region’s energy relies on imported oil products, much of which would normally transit the strait of Hormuz. Even before the US-Iran war, Pacific island countries spent an eye-watering percentage of GDP (between 10% and 25%) buying fossil fuels to run power plants, generators, boats and vehicles. This compares with a regional average of 8% spent on education and 6% on health.
The Middle East conflict has only added to the bill. According to a new report, Fiji’s annual refined fuel import costs could rise by US$375m (A$520m) if high oil prices persist. This is more than Fiji’s entire healthcare budget.
Renewable energy offers a clear solution. Replacing diesel generators with grid-scale solar and battery storage could save Pacific countries about US$700m (A$520m) each year in avoided fuel costs.
The incoming chair of the Pacific Islands Forum, the Palau president, Surangel Whipps Jr, wants the region to become the first in the world 100% powered by renewables. He says investment of US$120m (A$ 166m) is needed for Palau to add 60MW of solar and battery storage, which would enable 90% of its power needs to be met by renewables.
The greatest Pacific threat
When climate change was first debated at the UN Security Council in 2007, Pacific countries argued the impacts of a warming planet were “no less serious than those faced by nations and peoples threatened by guns and bombs”.
Since then, Pacific Islands Forum leaders have explicitly reaffirmed climate change is “the single greatest threat” to Pacific security.
In 2025, Earth was 1.44C warmer than the long-term average. Pacific countries are reeling from stronger cyclones, dying reefs and ocean acidification. Without urgent action to shift away from coal, oil and gas impacts will get much worse. Just this week, the world’s oceans are the warmest on record, fuelled by climate change and a rapidly intensifying El Niño event.
It is now almost certain the world will warm past 1.5C. Yet it remains possible, following a temporary “overshoot”, that countries can limit warming to 1.5C by the end of the century. This will require deep and immediate emissions reductions and some carbon dioxide removal to achieve “net-negative” emissions.
Limiting global warming to 1.5C is a line in the sand for low-lying Pacific nations – “1.5 to stay alive” is the slogan. Pacific negotiators helped secure this temperature goal in the 2015 Paris agreement.
Pacific nations expect Australia to reaffirm global commitment to 1.5C. Australia is helping Fiji and Tuvalu host a pre-Cop summit in October that will remind world leaders the survival of island nations is at stake.
Pacific countries will also seek new finance for a Pacific-owned climate fund to invest in community-scale adaptation projects.
Some argue collaboration with the Pacific in the lead-up to Cop31 is an expensive exercise. But climate action is crucial to Australian strategy in the region. Investing in renewables and adaptation in the Pacific is an investment in shared security, even as geopolitical competition sharpens between China and the US.
