1、Preliminary findingsLandscape of Climate Finance for Agriculture,Forestry,Other Land Uses and FisheriesSupported by:2Authors:Daniela Chiriac,Harsha Vishnumolakala,Paul Rosane Acknowledgements:The authors would like to thank contributions from Barbara Buchner,Dharshan Wignarajah,Baysa Naran,Anna Balm

2、,Rob Kahn,and Caroline Dreyer,for advice,editing and internal review and Josh Wheeling and Angela Woodall for layout and graphic design.The authors also acknowledge contributions from Jake Connolly for database maintenance,data cleaning,research,and project support.The authors appreciate the review

3、and guidance from the following expert outside CPI:Mike Reddaway(UK Foreign,Commonwealth and Development Office).Photo credits:Shabdita Bajpai and Anna Balm.Recommended citation:Climate Policy Initiative.2022.“Landscape of Climate Finance for Agriculture,Forestry,other Land Use and Fisheries:Prelimi

4、nary Findings.”Related CPI works:Global Landscape of Climate Finance:A Decade of DataLandscape of Climate Finance in AfricaClimate Finance Innovation for AfricaThe Landscape of Methane Abatement FinanceGlobal Landscape of Climate Finance 2021Examining the Climate Finance Gap for Small-Scale Agricult

5、ureContact:Daniela Chiriac daniela.chiriaccpiglobal.orgAbout CPI:CPI is an analysis and advisory organization with deep expertise in finance and policy.Our mission is to help governments,businesses,and financial institutions drive economic growth while addressing climate change.CPI has six offices a

6、round the world in Brazil,India,Indonesia,the United Kingdom,and the United States.Copyright 2022 Climate Policy Initiative www.climatepolicyinitiative.orgAll rights reserved.CPI welcomes the use of its material for noncommercial purposes,such as policy discussions or educational activities,under a

7、Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International(CC-BY-NC-SA 4.0)License.For commercial use,please contact admincpisf.org3Between 2013 and 2020,climate finance to agriculture,forestry,other land uses,and fisheries(AFOLU*)followed a mostly positive trend.However,it recorded a 2

8、0%drop between the period 2017/18 and 2019/20,with the latter annual average reaching USD 16.3 billion.This represents only 2.5%of total climate finance tracked,indicating that AFOLU sectors are underfunded in comparison to other sectors,like renewable energy generation receiving 51%or low-carbon tr

9、ansport with nearly 26%of the total.Current levels of tracked AFOLU climate finance are dwarfed by the estimated need to place the sectors on a pathway compatible with the Paris Agreement.AFOLU sectors require a nearly 26-fold increase in annual funding,i.e.,USD 423 billion annually by 2030(compared

10、 with the annual average of USD 16.3 billion in 2019/20)in order to shift to a low-carbon and climate resilient trajectory.New capital is required to finance this overarching shift which represents a business opportunity for the agri-food private sector.Returns-to-investment ratio is estimated at ov

11、er 15:1 for society and businesses.Equally,governments need to play an essential role by repurposing existing harmful public support for unsustainable AFOLU towards sustainable agricultural production practices and healthy diets.More policy and finance mobilization efforts are required to accelerate

12、 and scale up investments,as well as improve the quality of finance and reporting.In this regard,measurement and disclosure of the impact and outcomes of AFOLU climate finance deployed is essential to assess its effectiveness.The growth in overall climate finance for AFOLU translated into a signific

13、ant increase in finance for climate mitigation,while climate adaptation seems to plateau for the period 2015-2020.The AFOLU sector is uniquely positioned to deliver triple wins in terms of(1)productivity and incomes,(2)climate adaptation and resilience and(3)GHG emissions reduction through the use o

14、f climate-smart agriculture integrative approaches.This remains insufficiently explored.Therefore,increased focus on AFOLU investments with dual benefits should feature high on public and private funders agendas.*For the purposes of this report,the acronym“AFOLU”includes fisheries.Key Findings4An ov

15、erwhelming majority of tracked AFOLU climate finance originates from public sources,with philanthropies providing the small fraction identified on the private side.Multiple barriers limit private investments in the AFOLU sectors including high real and perceived risks coupled with lack of impact con

16、siderations which discourage private investments.Rapidly scaling up successful blended finance mechanisms should be a priority in the quest to fill the climate finance gap.The East Asia and Pacific region is the lead recipient of climate finance for AFOLU,followed by Sub-Saharan Africa.While Sub-Sah

17、aran Africa remains one of the lowest recipients of total climate finance across all sectors,the region attracts substantive investments towards AFOLU,which speaks to the economic significance of AFOLU within the region 23%of Sub-Saharan Africas GDP comes from agriculture.Forestry and agriculture co

18、mbined receive nearly 80%of the AFOLU climate finance in 2019/20.Conversely,climate financial flows targeting fisheries represent a minor fraction,as are those addressing food loss&waste,and low-carbon diets.Increased investments in these areas could unlock the potential that wider food consumption

19、patterns hold for climate change mitigation.Data gapsDespite sustained efforts to improve coverage of the data collected,significant gaps still persist on the public domestic financial flows as well as domestic and international finance flows from private sector actors.While the findings presented s

20、hould be interpreted with these data constraints in mind,they still provide a valuable overview of the known actions in this space and point to the need for increased standardization of climate solutions and consistent data disclosure by both public and private sectors.Key Findings5Table of Contents

21、1.Introduction62.Preliminary Findings9Global Trends of Climate Finance for AFOLU10Global Trends Compared to Needs11Finance Trends by Climate Objective12Finance Trends by Sources13Geographic Destination of Financial Flows14Sub-Sectoral Distribution 153.Next Steps164.References181.Introduction7Over th

22、e last decade,the agriculture,forestry,other land uses,and fisheries(AFOLU)sectors were responsible for 13-21%of global greenhouse gas(GHG)emissions(IPCC,2022,IPCC AR6 WGIII,Chapter 7).More widely,food system-related emissions,represent 34%of total GHG emissions per year,primarily comprising agricul

23、ture production and land-use activities(71%),with the remainder(29%)originating from other supply chain activities(retail,transport,consumption,etc.)(Crippa etal.,2021).Due to their substantive contribution to GHG emissions,AFOLU sectors are uniquely positioned to deliver significant climate mitigat

24、ion benefits in a relatively low-cost and quick manner.Against this setting,the rapid deployment of finance for climate mitigation in AFOLU is critical to help align with the 1.5C Paris Agreement target.Furthermore,agriculture and food systems are disproportionately exposed and vulnerable to adverse

25、 climate-related shocks,particularly so in low-income countries.Beyond the immediate impact on the quality and yield of agricultural production,climate change is undermining food access and inflicting economic loss(Holleman et al.,2020).On average,the AFOLU sectors have a significant economic import

26、ance in low-income countries,representing 25%of their GDP and providing employment to 63%of the workforce.In contrast,these figures are 8%and 30%respectively in middle-income countries and 1%and 3%respectively in high-income countries(FOLU,2019).This brief report presents the preliminary findings of

27、 an ongoing larger study,aiming to provide a comprehensive analysis ofthe global climate finance flowing towards AFOLU.The complete study is planned for publication in Spring 2023,and will aim to provide a baseline for the current and past volumes of global climate finance targeting AFOLU.The prelim

28、inary findings are based on analysis of the consolidated dataset 2013-2020 produced for CPIs Global Landscape of Climate Finance series(CPI,2022a).Despite sustained efforts to improve coverage of AFOLU data collected,significant gaps still persist on the public domestic financial flows as well as do

29、mestic and international finance flows from private sector actors(CPI,2022a;CPI,2020).The findings presented should therefore be interpreted with these data constraints in mind.The full publication will seek to fill some of these data gaps.Background8The goal of the study is to measure progress and

30、help to define ambitions and actions to increase investments in AFOLU,whilefostering greater consensus on the priorities for climate finance in the sector.The release of these preliminary findings at COP27 is meant,in addition to fuelling ambitions and commitments from both the public and private se

31、ctor,to equally stress the importance of following up on those commitments by regularly disclosing quantitative information on actual implementation,so that progress in the transition can be transparently and reliably measured.This study is produced by CPI as the Secretariat of the ClimateShot Inves

32、tor Coalition(CLIC),an action-oriented group of leaders in the impact investment community working in agriculture and food systems globally.CLIC aims to collectively scale-up and accelerate finance for agriculture and food systems with the vision to shift these sectors to a low-carbon,climate-resili

33、ent and nature-positive pathway by 2030,thus delivering on the ambitions of the Glasgow Breakthrough Agenda on Agriculture.Launched at COP26,the Breakthrough Agenda on Agriculture aims to“make climate-resilient,sustainable agriculture the most attractive and widely adopted option for farmers everywh

34、ere by 2030.”This research on AFOLU climate finance flows supports the delivery of the Breakthrough Agenda on Agriculture.The first annual Breakthrough Agenda report 2022(IEA et al.,2022)sets out the vast gap between needs and current financial flows of international climate finance into the agricul

35、ture sector and calls on participating countries of the Agriculture Breakthrough and private sector investors to channel larger volumes of climate finance to agri-SMEs and smallholder farmers,particularly in developing countries.Our study will complement the Breakthrough Report by delving into great

36、er detail,providing a baseline for global climate finance targeting AFOLU based on historical data as well as providing recommendations on modalities for governments,development finance institutions,and the private sector,to work together and make more finance available.The study is included as one

37、of the Priority International Actions for 2023 identified by participating countries of the Agriculture Breakthrough and will be used to inform dialogue in 2023 between Breakthrough countries on further actions that can be taken to accelerate progress to the 2030 Agriculture Breakthrough.Relevance2.

38、Preliminary Findings10In the period 2013 2020,climate finance for AFOLU increased at a slightly higher rate*(11%)compared with global flows across all sectors(10%).AFOLU flows peaked in 2017/18,at USD 20.5 billion annual average*,representing a more than two-fold increase compared with 2013/14 and 8

39、0%more than 2015/16.However,the 2019/20 sectoral distribution shows that AFOLU,with only 2.5%of total climate finance,lags behind other sectors like renewable energy generation receiving 51%or low-carbon transport with nearly 26%of the total climate finance(CPI,2022a).More efforts are required to ac

40、celerate and scale up investments,as well as improve the quality of finance and reporting.In this regard,disclosing the impact and outcomes of AFOLU climate finance deployed is essential to assess its effectiveness(CPI,2022a).While the global climate finance flows across sectors continued the upward

41、 trend between 2017/18 and 2019/20,AFOLU was the only sector recording a fall in 2019/20(CPI,2022a).A few plausible factors could explain the AFOLU drop:(1)funding fluctuations of few large reporting institutions;(2)changes in the methodologies used by reporting institutions or(3)impact of the COVID

42、-19 pandemic and the ensuing economic crises affecting the sector disproportionately.Further analysis on the possible explanatory factors as well as potential updates of the funding levels for the sector will be included in the larger study to be published in Spring 2023.Between 2013 and 2020,climat

43、e finance to AFOLU followed a generally positive trend,however,it recorded a large drop in 2019/20.Figure 2.1:Global climate finance flows to AFOLU sectors(USD billions,annual averages between 2013 and 2020)*CAGR refers to the growth rate at an annual compounded rate to show smoothed rate taking int

44、o account any fluctuations year on year*CPI traditionally reports two-year averages to smooth out annual fluctuations in data.The upcoming larger study will as much as possible use annual figures where they fulfil CPIs standards of accuracy.11The AFOLU sectors require a nearly 26-fold increase in an

45、nual funding by 2030 compared with the 2019/20 annual average in order to shift to a low-carbon and climate resilient trajectory.Data and knowledge on climate finance needs are constantly evolving and their assessment will change with the course of actions taken by public and private actors and with

46、 more data becoming available.However,based on recent estimates in the literature reviewed,the comprehensive transition of the AFOLU sectors requires on average USD 423.4 billion per year*up to 2030*.To achieve this in the next eight years,there is an urgent need for investment to support the shift

47、in major areas of the agriculture and food systems,including regenerative crop production,sustainable livestock and fishery practices,stop deforestation,scale up diversified proteins production and consumption,reduce food loss and waste,training farmers,build the rural infrastructure as well as educ

48、ate and provide access to reproductive health for women and girls in rural areas(UNEP,2021;FOLU,2019;Harmsen et al.,2019)New capital is required to finance this overarching shift;for the agri-food private sector,embedding climate and nature sustainability in their operations represents a major busin

49、ess opportunity.Investments in these transition avenues are estimated to have a return to investment ratio of more than 15:1 for society and businesses(FOLU,2019).Equally,governments need to play an essential role.Worldwide,public support for the agricultural and food systems sectors is estimated at

50、 USD 620 billion per year(IFPRI,2022),thus holding a high potential to be repurposed towards sustainable production practices and healthy diets.Calls for action in this direction are multiplying(IFPRI,2022;IEA et al.,2022).Climate finance to AFOLU is dwarfed by the estimated needed to place the sect

51、ors on a Paris-compatible pathway.Figure 2.2 Global tracked climate finance flows and the average estimated annual climate investment need through 2030*The average between a low estimate of USD 300 billion and a high estimate of USD 547 billion.*After 2030,annual estimates change.12The growth in ove

52、rall climate finance for AFOLU translated into a significant increase in finance for climate mitigation,while climate adaptationseems to plateau in absolute numbers for the period 2015-2020.Finance targeting climate mitigation recorded a major leap from USD 3 billion annual average for 2015/16 to US

53、D 10.6 billion annual average for 2017/18.Adaptation finance,however,has fluctuated only mildly over 2015 2020 and dropped in 2019/20.Although adaptation finance takes a considerably larger share in the total climate finance for AFOLU at 34%,compared with the overall climate finance across sectors a

54、t only 7.4%,this needs to be compared against the high climate risks which excessively affect agriculture,food systems,and rural communities(Holleman et al.,2020).Yet,while urgently needed,investments in climate adaptation are also notoriously challenging in the agriculture and food systems sectors,

55、which explains the low levels of investment.Adaptation measures in agriculture lack markets where their impacts can be monetized,similar to carbon markets,thus they cannot be converted into additional revenue streams for farmers or investors.Without public or philanthropic support,private investors

56、lack the incentives to come into this space.(ISF,2016).Yet the AFOLU sector is uniquely positioned to deliver triple wins in terms of(1)productivity and incomes,(2)climate adaptation and resilience,and(3)GHG emissions reduction through the use of climate-smart agriculture integrative approaches(FAO,

57、2013).This opportunity remains insufficiently explored,therefore increased focus on investments with both climate mitigation and adaptation benefits should feature high on public and private funders agenda.Finance for adaptation in AFOLU is stagnating,while integrated approaches for adaptation and m

58、itigation remain underutilised.Figure 2.3 Global tracked climate finance flows for AFOLU by climate objectives within(USD billions,annual averages for the period 2013-2020)13The private finance tracked is primarily sourced from institutional investors,mainly philanthropic foundations,and has passed

59、the 1%threshold for the first time in the 2019/20 period.This is partially attributed to the inclusion of new data*,thus an actual increase in private financial flows is difficult to determine at this point.Unlike public finance flows from the Global North to South,data on private finance flows is s

60、carce and fragmented,making it particularly challenging to gather datasets of the same granularity as for public sector finance.This is in large part due to an absence of reporting obligations and a systematic framework for the private sector(CPI,2021a;CPI,2020).Even with these caveats in mind,the l

61、ow figures of private investments in AFOLU are indicators of a considerable lag compared with other sectors.As of 2019/20,across sectors,49%of total climate finance originate from private sources(CPI,2021a).Multiple barriers limit private investments in the AFOLU sectors including high actual and pe

62、rceived risks,upfront and transaction costs,small tickets sizes,long pay-back periods and low returns(CPI,2021b).The high vulnerability to climate change of the sector coupled with the need for adaptation investments discourage private investments.Blended finance approaches offer opportunities for i

63、ncreased private investor participation in AFOLU and they seem to gain momentum reaching 28%of total blended finance deals in 2020,compared to only 16%between 2015-17(Convergence,2021).In light of the vast climate finance gap that still needs to be filled,innovative ways to replicate and scale-up su

64、ccessful blended finance instruments should be prioritized in the AFOLU sectors.An overwhelming majority of AFOLU climate finance originates from public sources.Figure 2.4 Sources of climate finance within AFOLU,by actor type(USD billions,annual averages between 2013 and 2020)*Part of CPIs work on t

65、he Landscape of Climate Finance in Africa publication(CPI,2022).Public sources include primarily national,bilateral,and multilateral development finance institutions as well as governments.Grants,concessional debt,and market-rate debt constitute the majority of these public finance flows.14The prima

66、ry source of finance for these regions are national and multilateral DFIs as well as governments.Sub-Saharan Africa remains one of the lowest regional recipients of total climate finance across all sectors,standing at only 3.4%,or approximately USD 22 bn(CPI,2022a).Despite this,the region attracts s

67、ubstantive investments towards AFOLU,second only to its Energy Systems sector(CPI,2022b).This trend speaks to the economic significance of AFOLU within the region 23%of Sub-Saharan Africas GDP comes from agriculture(Goedde et al.,2019).Our analysis reveals the extent of data gaps on climate finance

68、for AFOLU.At the moment,we lack standardized and comparable data on investments for US&Canada as well as for Australia&Oceania were,while for Western Europe,Eastern Europe,and Central Asia,data on private sector investments constitute a gap.One of the objectives of the full report will be to provide

69、 quantitative and qualitative insights into these data gaps.The East Asia and Pacific region is the lead recipient of AFOLU climate finance with 39%of the total,followed by Sub-Saharan Africa receiving 24%.Figure 2.5 Destination region of climate finance to AFOLU,by public/private sources(USD millio

70、ns,2019/20 annual average)The destination of USD770 million annual average could not be accurately identified due to inconsistent reporting methodologies among data sources.*Unknown sources for SSA financing due to additional data collection compared with the other regions.15Climate finance towards

71、fisheries represent a minor fraction,standing at only 1%of the tracked climate finance,despite the potential for many seafood species to constitute a source of protein with lower GHG emission rates than land animal proteins(Bianchi et al.,2022).Similarly,finance addressing food loss and waste,as wel

72、l as low-carbon diets constitutes less than 1%of the finance tracked,although they are identified as two of the key levers to address climate change in food systems(FOLU,2019;IEA et al.,2022).Scarce data for these two sub-sectors can explain the small financial flows identified,thus stressing the im

73、portance of standardized data collection methodologies as well as systematic reporting of investment data,particularly from the private sector.The extended study is aiming to fill some of the data gaps identified,particularly private investments in alternative proteins.Yet,our results also constitut

74、e an indicator of the untapped potential that fisheries as well as wider food consumption patterns hold for climate change,which could be unlocked with increased investment.Forestry and agriculture combined receive nearly 80%of AFOLU climate finance in 2019/20.Figure 2.6:Sub-sectoral distribution of

75、 climate finance towards AFOLU(percentage of 2019/20 annual average)3.Next Steps17The findings presented in this report constitute the foundation of a larger study planned for publication in Spring 2023.We will build on these preliminary findings to:Deepen our analysis of climate finance flows to AF

76、OLU as well as expand the coverage of our datasets particularly on the private sector investments.Analyze climate finance flows towards small-scale AFOLU.Produce recommendations on addressing the finance and data gaps for various groups of stakeholders.Meanwhile,we welcome your comments and inputs a

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