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Over the 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 agriculture production and land-use activities (71%), with the remainder (29%) originating from other supply chain activities (retail, transport, consumption, etc.) (Crippa et al., 2021). Due to their substantive contribution to GHG emissions, AFOLU sectors are uniquely positioned to deliver significant climate mitigation 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 1.5°C Paris Agreement target.

Furthermore, agriculture and food systems are disproportionately exposed and vulnerable to adverse 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 importance 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 an ongoing larger study, aiming to provide a comprehensive analysis of the 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 preliminary findings are based on analysis of the consolidated dataset 2013-2020 produced for CPI’s 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 domestic 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.

Key findings

Between 2013 and 2020, climate finance to agriculture, forestry, other land uses, and fisheries (AFOLU*) followed a mostly positive trend. However, it recorded a 20% 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 transport 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 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 over 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 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 significant 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 of 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.

An overwhelming 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 considerations 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-Saharan 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 Africa’s GDP comes from agriculture.

Forestry and agriculture combined 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 patterns hold for climate change mitigation.

Data gaps
Despite 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 should 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.

*For the purposes of this report, the acronym “AFOLU” includes fisheries.


This study is produced by CPI as the Secretariat of the ClimateShot Investor 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-resilient and nature-positive pathway by 2030, thus delivering on the ambitions of the Glasgow Breakthrough Agenda on Agriculture.

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