Climate Minister Ralph Regenvanu said Vanuatu was the first nation to introduce the term "loss and damage" at the United Nations climate negotiations in 1991.
Large parts of the world are suffering from the accelerating impacts of climate change - and poorer countries on the frontline are seeking help to cope and recover.
A year ago at COP26 in Glasgow, developing nations made a strong plea for a new fund or facility to channel "loss and damage" finance but secured only a three-year dialogue on it.
"This is where it has to happen," Regenvanu, a member of parliament for Vanuatu's capital Port Vila, told Reuters in Egypt.
Vague language on funding arrangements in a final decision text would not be acceptable to island nations threatened by rising seas and fierce storms, he said.
The issue is top of the political agenda at COP27, with developing nations pushing hard for a proposed new finance facility but facing pushback from some rich countries such as the United States that want to use existing funds and institutions.
"Loss and damage" refers to the physical and mental harm that happens when people and places are not prepared for climate disasters, or cannot adapt how they live to protect themselves from slower impacts such as coastal erosion or creeping deserts.
Regenvanu said Vanuatu's government needed to do more to help people living in low-lying areas near the sea who are struggling to cope with worsening floods and the intrusion of saltwater into the soils.
"Now we are seeing much more issues like heavy rainfall causing landslides ... (and) large areas becoming uninhabitable because of water damage and flooding," he said.
Regenvanu said Vanuatu - which has a population of about 280,000 spread across roughly 80 islands - needed financial assistance to pay for expensive measures to relocate and protect its citizens.
At least half of the country's people may eventually have to move, along with part of the capital, he said.
The Pacific nation spends 15 per cent of its budget on dealing with climate change impacts - the same share it allocates to health and education - but is yet to receive significant amounts of climate finance from international donors, Regenvanu said.
In the past 10 years, climate funding of about $US100 million ($A148 million) has flowed to Vanuatu, which suffered losses of $US600 million ($A888 million) from top-strength Cyclone Harold in 2020 alone.
Earlier this year, Vanuatu costed new loss and damage measures it hopes to adopt in its updated national climate action plan.
They include offering micro-insurance, constructing public buildings and infrastructure to minimise climate risks, providing healthcare, protecting people displaced by disasters and relocating communities away from threats.
Implementing these measures would total an estimated $US178 million ($A264 million) by 2030 - an amount Vanuatu says will need to be covered by donors.
On Friday, Vanuatu is expected to present the final version of a resolution it plans to put to the UN General Assembly for a vote by member states in mid-December.
The resolution seeks an advisory opinion from the International Court of Justice (ICJ) on the obligations of states under international law to protect the rights of present and future generations against the adverse effects of climate change.
Vanuatu says it has assembled a global coalition of more than 85 nations that back the resolution and is confident of securing a simple majority.
Regenvanu said it was still working to enlist the European Union.
An ICJ opinion cannot force countries to do anything but would set a "very important precedent" and influence courts at all levels from local to international, he said.
