The objective of the study was to develop an understanding of financing flows in agriculture, forestry and other land uses. Such an understanding helps identify ways to redirect public and private investment from business-as-usual towards practices to mitigate and adapt to climate change. The study examined land-use mitigation and adaptation interventions, and opportunities for governments to scale-up investment in mitigation and adaptation strategies. The study presents opportunities for governments, international donors, private investors and businesses to finance mitigation and adaptation in agriculture, forestry and other land uses and to coordinate their efforts.
Agriculture, forestry and other land uses account for around a quarter of global greenhouse gas emissions. In many countries, the proportion of emissions from land use is far higher. At the same time, these sectors are very vulnerable to the impacts of climate change. There are opportunities to redirect the hundreds of billions spent annually on land-use activities around the world towards low emissions without sacrificing either productivity or economic development. Low and middle-income countries and their development partners, businesses and investors urgently need to identify the changes in public support that can help to scale-up private sector investment in land-use mitigation and adaptation.
The amount invested each year in land-use mitigation and adaptation is a fraction of total investment in agriculture, forestry and other land uses. Estimates of investment in land-use mitigation and adaptation range widely, from USD1.3 billion to USD51.8 billion. Total investment in agriculture and forestry in developing countries alone amounts to hundreds of billions of dollars. Most investments do not mitigate climate change or help adapt to its effects. In some cases, investments may increase emissions or exacerbate climate vulnerability. Much of the investment in land use, spurred by significant public subsidies and incentives, is by domestic private investors.
Limited understanding of the drivers and nature of investment in land-use inhibits efficient, effective public interventions. In many cases, we know little about how much investors channel to the land-use sector, how they deliver funds, what funds pay for and who spends funds. Nor do we understand the share of investment in low emissions compared to business-as-usual land-use activities or the opportunities that may exist to address barriers, or create incentives to shift land-use activities towards low emissions. The study developed three tools to address these issues.
The study approach was to examine ways to shift investment in agriculture, forestry and other land uses towards practices to mitigate and adapt to climate change, to identify financing opportunities and to develop tools for governments and development partners. The tools:
- Inform the design of multilateral and bilateral strategies to reduce land-use emissions
- Identify domestic and international financial instruments to redirect public and private finance towards low-emissions land-use
- Encourage coordination of public financing instruments across land-use sectors
Much of the investment in land use, spurred by significant public subsidies and incentives, is by domestic private investors.