A light, taunting shower of rain fell in Funafuti recently. It lasted minutes, with the slightest film of moisture quickly burned away by the bright sun, dashing the hopes of this crowded, parched atoll.

Funafuti and the other eight tiny islands that comprise the Pacific nation of Tuvalu, home to slightly more than 10,000 people, have not seen substantial rainfall since last November.

The government, which declared a state of emergency at the end of last month, says the dry spell is unlikely to break until January.

The drought is chiefly attributed to La Niña, the climate phenomenon which unleashes extreme weather across large parts of the Pacific region.

But the crisis has also been linked to climate change, with rising sea levels imperilling the islands' freshwater lens – the layer found beneath coral islands – and leaving many Tuvaluans anxious over the viability of their country.

Climate change is part of the curriculum at Nauti primary school, where the subject has an obvious resonance. "The pupils talk about it and we discuss it and what it means," says the headteacher, Fanoiga Falasa.

The view among the students is that man-made climate change is testing the tenability of the country, says Falasa, sitting in his office on the edge of the school's large courtyard.

In better years a playing field would grow there; today it is a square of desert, all dust and clumps of arid lawn.

"Some of them are happy, thinking [climate change] might lead to an overseas trip," he says. "Some of them feel sad because they might lose their identity, their culture, their home."

Do they feel angry? "In some ways, yes, because of the bigger countries and what they contribute to climate change. We are a small country, and we are the ones who suffer."

He adds: "I would be very sad if we had to leave our country. Our ancestors are here. We would lose a lot."

The highest point on Tuvalu, which lies halfway between Australia and Hawaii, is less than five metres above sea level. Most of it is less than a metre above. From the air Funafuti appears as a sliver of unattached coastline. The atoll curls around a large lagoon, the widest stretch from one coast to the other measuring barely 400 metres. There are no streams or rivers. The land, unsuitable for farming, allows few crops to grow.

There is very little room for error. Should sea levels rise this beautiful, tiny country – the land area of all nine islands combined is 26 sq km (10 sq miles), 15 times smaller than the Isle of Wight – will become uninhabitable, swallowed whole by the Pacific Ocean.

In the memorable words of Saufatu Sapo'aga, a former Tuvaluan prime minister, climate change for this country is "no different to a slow and insidious form of terrorism".

The big powers have left their mark on Tuvalu in other ways, too. The massive airstrip that runs the spine of Funafuti is out of all proportion to the land that surrounds it. The runway, built in the second world war by US forces, used materials from a series of "borrow pits" dug deep into the earth, puncturing the freshwater lens. The pits remain open wounds, filled with a useless mix of natural water, salt water and piles of waste. On the water's edge are dozens of misshapen shacks that house the country's poorest people: a toxic, dystopian contortion of an island paradise.

Around the corner from the primary school the Tuvalu hospital is limiting admissions to try to cope with the water rationing. Its taps ran dry last Wednesday, and emergency reserves were called in from the temporary desalination plant installed early that week by the New Zealand Defence Force as part of a response co-ordinated with an Australian contingent and the Red Cross.

The hospital faced an outbreak of gastroenteritis two weeks ago, and it is prepared for a spate of waterborne diseases, says Dr Puakena Boreham. "It is not a public health crisis at the moment, but it will be if it gets worse," she says.

"We expect there may be skin problems soon, because people are not bathing as usual."

Sitting on a wooden bench in the hospital reception room, a pregnant Fakatau Teulub is waiting for her seven-month checkup. It will be her fourth child. It is "hard, very hard" for her household to get by on the ration of two buckets of water a day, she says.

In temperatures of around 30C, 40 litres is barely enough for drinking and cooking for Teulub, her children and her husband, a fisherman. Hardly a drop is left for bathing, for washing clothes and dishes. The family's livestock, two pigs and two chickens, go thirsty.

Teulub would emigrate in a heartbeat, she says. "We're dying to move, but we don't have the money."

Roy Lameko, 62, has seen droughts come and go, but "nothing as bad as this". He, his wife and son have not washed clothes for weeks. They all bathe in the sea. "We keep a cup of water to rinse afterwards."

Lameko, who is hanging pieces of tuna to dry on a washing line outside his house, says that with the few crops the islands rely on – coconuts, breadfruit and pulaka (or swamp taro) – failing, people are being forced to dig into any savings to purchase expensive imported foods.

Lameko has two other children, both of whom live in Auckland and who send money back monthly to Tuvalu. Will they return? "I don't know. They want us to go there, but the problem is money," Lameko says and laughs. "That's our only problem: money and water."

The Tuvalu government has long called for industrialised countries to drastically curb carbon emissions, and to compensate parts of the world that are bearing the brunt of climate change.

Like the equally low-lying Maldives in the Indian Ocean, Tuvalu is a symbol of the human price of climate change. Tuvalu's 2008 environment act obliges ministries to "raise the level of understanding throughout the world about the implications of climate change".

"We believe that this [current crisis] is indeed the facts of climate change," Pusinelli Laafai, chairman of Tuvalu's national disaster committee, tells journalists who travelled to Tuvalu aboard an NZ Defence Force aircraft carrying aid. "We think [industrialised countries] have an obligation to help us, if not to restore what was damaged or taken away, at least to assist us in some sense, to mitigate the effects of what they have done," he says. "That is what we ask."

Laafai is confident, however, that the nation-state will not come to an end or have to relocate. "In the long term we will stay here I think," he says. "And we will try to cope. We'll manage somehow, even if it's difficult and expensive."

Over at the water distribution point next to the government-owned desalination plant, Nelly Semiola says he is going nowhere, although he understands that many of his friends and compatriots want to escape the droughts, remoteness, poverty and fragility.

"I want my life to be here," he says. "I grew up here. I got married here. So if what's coming is coming, that's OK. If we survive, we survive. If we die, we die."

Dotcom economy



Tuvalu's GDP is so tiny – about $37m (£23m) – that a line item on the budget measures the sale of national stamps and coins to collectors.

But that income has been boosted by a digital windfall, thanks to the .tv top-level domain name it controls thanks to its name ("Tuvalu" translates as "group of eight", the number of inhabited islands).

Royalties from the sale of the domain name, which by 2010 was used by about 110,000 sites, could reap Tuvalu as much as $40m over a decade.

Funds largely paid for the 2002 tar-sealing and lighting of the roads on Funafuti but the investment has been criticised by some as contributing to the water problem, because of the lack of drainage from the roads.

Laafai, who is also permanent secretary for home affairs, says the benefits of the sealed road outweighed any drawbacks.