The Pacific island nation of Nauru is selling citizenship to fund its retreat from rising seas, the country’s president, David Adeang, announced on Tuesday, opening a contentious “golden passport” scheme as climate financing runs dry.

The low-lying island nation of 13,000 residents is planning a mass inland relocation as the human-caused climate crisis raises global sea levels, eating away at the country’s fertile coastal fringe.

The country will drum up funding by selling passports to foreigners for US$105,000 each, despite fears such schemes are ripe for criminal exploitation.

Nauru claims its passport will provide visa-free entry into 89 countries, including the United Kingdom, Ireland, the United Arab Emirates and Hong Kong.

“For Nauru it is not just about adapting to climate change, but about securing a sustainable and prosperous future for generations to come,” Adeang told AFP. “This is about more than survival. It is about ensuring future generations have a safe, resilient and sustainable home. We are ready for the journey ahead.”

The island republic sits on a small plateau of phosphate rock in the sparsely populated South Pacific. With a total landmass of just 21 square kilometres (8 square miles), it is one of the world’s smallest nations.

Unusually pure phosphate deposits – a key ingredient in fertiliser – once made Nauru one of the wealthiest places, per capita, on the planet.

But these supplies have long dried up, and researchers today estimate 80% of Nauru has been rendered uninhabitable by mining.

What little land Nauru has left is threatened by encroaching tides; scientists have measured sea levels rising 1.5 times faster than global averages.

Golden passports

Existing climate funding efforts are “not sufficient” to address the challenge, said Edward Clark, who runs Nauru’s new Economic and Climate Resilience Citizenship Program.

“Debt financing places an undue burden on future generations and there is not enough aid,” he told AFP.

Nauru’s government expects to reap US$5.7m in the programme’s first year, equating to about 66 successful applications, Clark said.

It hopes this will gradually increase to US$43m – or about 500 successful applications – which would account for almost 20% of total government revenue.

Nauru officials believe 90% of the population will eventually need to move to higher ground.

The first phase of this mass relocation is estimated to cost more than US$60m.

To pay the bill, Nauru has pinned its hopes on the new citizenship-by-investment programme.

Clark said it was a kind of “innovation”.

“It is well known that developing climate-vulnerable countries are disproportionately affected by climate change, and there is therefore an urgent need to ensure they disproportionately benefit from climate innovation,” he said.

Nations such as Nauru “have both a need and a right to be prosperous”, Clark added.

A ‘pioneering’ fix?

More than 60 different nations offer some form of migration for investment schemes, Australia’s Lowy Institute has found.

Pacific nations such as Vanuatu, Samoa and Tonga have all dabbled in selling passports, according to the thinktank.

Henrietta McNeill, a research fellow in pacific affairs at the Australian National University, said while these schemes helped bolster government revenue, they were also prone to exploitation.

She said criminals could use these documents to evade law enforcement, launder money or exploit visa-free entry rules.

A previous Nauru attempt to sell passports ended in disaster.

In 2003, Nauru officials sold citizenship to al-Qaida members who were later arrested in Asia, according to Australian broadcaster ABC.

Clark said this time Nauru would only offer passports to like-minded investors that passed “the strictest and most thorough due diligence procedures”.

“This programme isn’t just about acquiring another passport,” he said.

“It’s about joining a community dedicated to pioneering solutions for global challenges.”

Nauru has accepted millions of dollars from the Australian government since 2012 for housing migrants who had sought asylum in Australia.

But the scheme was gradually scaled back after 14 detainee deaths, multiple suicide attempts and at least six referrals to the international criminal court.

Nauru still held 87 people as of 31 August 2024, according to latest Australian government figures.