UN COPs (Conferences of Parties) are about building bridges and finding consensus around issues that affect us all, as inhabitants of the same planet. Four opportunities to break silos in agriculture and food systems emerged from COP27 and should be leveraged at COP15 and beyond.
1. Integrate climate mitigation with adaptation & resilience
Building on the Glasgow–Sharm el-Sheikh work programme on the global goal on adaptation, the Egyptian COP27 presidency clearly placed climate adaptation and resilience (A&R) as one of the top priorities. The discourse was generally framed in terms of increasing finance for A&R. The Sharm el-Sheikh Adaptation Outcomes reinforce the need for public finance actors to increase the volume of finance to A&R and for private finance actors to focus on integrating physical climate risks into investment decisions as well as innovating on mechanisms to finance A&R.
The Agriculture, Forestry and Other Land Use (AFOLU) sector is uniquely positioned to deliver simultaneous wins in terms of both climate A&R and GHG emissions reduction (climate mitigation) through the use of climate-smart agriculture integrative approaches and supply chain interventions. Our preliminary findings on the Landscape of Climate Finance for Agriculture, Forestry, Other Land Uses and Fisheries show that this opportunity remains insufficiently explored: only 13.5% of total climate finance to AFOLU is targeting dual climate benefits. Public and private funders, financial institutions, and corporates should prioritize integrated solutions that can embed climate mitigation activities with A&R objectives to create benefits for both farmers and food supply chains. The 2030 Adaptation Outcomes for Food & Agriculture provides an extensive list of such technical solutions.
2. Align development and climate priorities
Climate and development are two sides of the same coin. The COP27 Implementation Plan includes an unprecedented call for multilateral development banks (MDBs) and international financial institutions to reform their mandates towards alignment with climate priorities. This was also echoed by the COP27 MDBs Joint Statement, as it calls for the deployment of financial instruments that are able to address risks at the same time as increasing impact.
As climate events are gaining in intensity and regularity, so is the vulnerability of rural populations in low- and middle- income countries, particularly smallholder farmers, their families, and wider communities. Beyond the immediate impact on the quality and yield of agricultural production, climate change is undermining food security and inflicting economic loss, especially pressing in fragile and conflict-affected states. Climate finance strategies need to focus not only on volume, but also on quality. Conversely, development finance should mainstream climate and nature considerations. Rural development using climate smart and regenerative practices has enormous potential to increase farmers’ income at the same time. Both public and private finance institutions should aim to deliver impact across the board, from climate and socio-economic benefits to gains for nature and human health, thus delivering on the SDGs.
3. Bring public and private finance together
CPI’s flagship analysis of climate financial flows reiterates every year the magnitude of the gap between current financing levels and those needed for a trajectory aligned with the Paris Agreement. Public and private actors need to join resources to fill that gap. The issue is particularly thorny for AFOLU, where private investment is notoriously low due to prevalent actual and perceived risks: in 2019/20, private climate finance represented just over 1% of total climate finance, in contrast with the average across other sectors where private finance stands at 49% of total climate finance.
The COP27 MDBs Joint Statement sent an important signal showing the intention to scale up private sector mobilization through various channels, including strengthening of the local banking sector. Due to the private sector’s risk aversion, DFIs must go one (or several) step(s) further and proactively seek private co-investments. It is encouraging to see a number of interesting examples of public-private partnerships which hopefully will trigger similar initiatives: the IDB Invest approach to private finance mobilization, Aceli Africa building the market for agricultural SME finance or the JuST Institute, a partnership between GEF and BNP Paribas launched at COP27 aiming to develop and certify Inclusive Financial Services Providers (IFSPs) for farmers.
More transparency is also required on the private side. While the ambitions reflected in net zero commitments from various agri-food corporates are welcomed attempts to address the urgency of the climate issues in the sector, it is equally urgent to follow those commitments with implementation plans and regular reporting on progress and impact achieved. As part of CPI’s role as the Secretariat for the ClimateShot Investor Coalition (CLIC), we are working on an extensive Landscape of Climate Finance for Agriculture, Forestry, Other Land Uses and Fisheries. Data on private finance flows in these sectors is scarce and fragmented, making it particularly challenging to gather datasets of the same granularity as for public sector finance. We call on the private sector to work with public actors and civil society to devise reporting frameworks that can be used systematically and are adapted to their needs, so that data produced can be aggregated at global level to help build consensus on priorities for finance and policy action.
4. Bring climate and nature together
With COP27 still fresh in our minds, in the news and at the top of agendas, the world is heading towards COP 15 – the UN Biodiversity Conference. While the Glasgow Climate Pact emphasized the importance of nature and ecosystems as ways to address climate objectives, the COP27 Implementation Plan goes a step further. It underlines the urgency of addressing the climate change and biodiversity crises in a “comprehensive and synergistic manner.” Other major actors (as illustrated in the 2022 Finance in Common Summit Communiqué) also recognize the fact that development, climate, and nature are interconnected and need to be addressed as such.
AFOLU sectors, as well as food systems more broadly, are major contributors to biodiversity loss and greenhouse gas emissions, while being completely dependent on natural resources and weather patterns. These sectors hold significant potential for innovative projects and investments relying on nature-based solutions to simultaneously (1) increase resilience to climate change of people and ecosystems, (2) sequester carbon and (3) increase or restore biological diversity.
The road is not easy. In 2021, CPI has provided support to IDFC members to track their biodiversity finance and since the beginning of this year we have contributed to the MDBs’ effort towards the creation of a framework to track their nature-positive finance. Multiple steps are still required to bring all DFIs to a high level of commitment and implementation of climate and nature-positive finance priorities. Alongside those steps, clear thinking should go into the most efficient modalities to integrate climate and nature strategies, policies, operating procedures, and ultimately interventions on the ground. For the private sector, concrete reflection is needed on how the frameworks produced by TCFD and TNFD should consider one another and eventually become one integrated framework.
The global community needs to identify holistic strategies that align simultaneously with the Paris Agreement, the upcoming Post-2020 Biodiversity Framework and the SDGs and find innovative solutions that deliver at the same time benefits for climate, nature, and people.