Farmers measure in
preparation for a new contour ridge as part of a climate-smart FAO project in
Tanzania. Photo: Collected
The transformation of agrifood systems - a
unique opportunity to tackle climate change, biodiversity loss and food
insecurity - is under threat from reduced funding
Rome/Dubai,10/12/2023-
The amount of climate finance flowing to agrifood systems is strikingly low and
continues to diminish compared to global climate finance flows, a new report by
the Food and Agriculture Organization of the United Nations (FAO) warns. This
is happening at a time when more financing is urgently needed to help reach the
goals of the Paris Agreement and support the implementation of the United Arab
Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and
Climate Action signed by over 150 world leaders.
Climate finance refers
to local, national, or transnational financing - drawn from public, private and
alternative sources of financing - that seeks to support mitigation and
adaptation actions to address climate change.
Between 2000 and 2021,
climate-related development financial support for agrifood systems amounted to
$183 billion, with more than half of the funding delivered after 2016. However,
in 2021, contributions plummeted to $19 billion, a 12 percent decline compared
to 2020.
The most affected
region was Asia, with a sharp drop of -44 percent compared to 2020. Africa and
Europe experienced a mild increase of 4 percent, while Latin America and the
Caribbean saw a modest increment of 6 percent.
Although there has
been an overall global increasing trend in absolute terms since 2000, doubling
from $9 billion allocated in 2010 to $19 billion in 2021, the growth rate of
climate-related development finance towards agrifood systems falls
significantly short of the average growth rate of three to four times observed
in climate-related development finance overall.
Climate-related
development finance going to the transport sector, for example, has increased
almost four-fold in the same period.
Amid worsening climate
impacts and slow progress on reducing greenhouse gases, embracing sustainable
agrifood systems practices – covering production, distribution and consumption
– can help nations adapt, build resilience, and cut greenhouse gas emissions
while ensuring food security and protecting biodiversity.
“The unique potential
of agrifood systems to tackle the climate crisis can only be realized by
scaling up investments in agrifood systems solutions and actions. The
diminishing trends of both agrifood and adaptation investments is a missed
opportunity to equip farmers around the world with the knowledge, the
much-needed technologies and innovation to enhance their resilience and adapt
to climate change impacts,” said FAO Deputy Director-General Maria Helena
Semedo.
Agriculture is one of
the sectors with the highest adaptation finance needs for implementing
Nationally Determined Contributions (or national climate plans), but climate
finance for adaptation is also on a downward trend.
The report mentions
that according to a recent analysis from the Climate Policy Initiative, only 4
percent of global climate finance went to agrifood systems between 2019 and
2020. To transform agrifood systems and achieve not only climate action but all
the Sustainable Development Goals (SDGs), nations would need to mobilize about
$680 billion a year until 2030.
Other key findings and
recommendations
In 2021, bilateral
resource providers (entities or countries that provide financial support or
resources directly to another specific country or entity) were the primary
contributors to climate-related development finance for agrifood systems, making
up 59 percent, while multilateral providers contributed 35 percent, and the
private sector a modest 5 percent.
Sub-Saharan Africa was
the primary recipient of financial support for climate-related initiatives in
agrifood systems. The region secured a significant 53 percent of these funds,
primarily from bilateral donors, notably Germany and the European Union.
The report highlights
the increasing popularity of blended finance, which combines public and private
funds to encourage climate-smart agricultural projects with significant
financial, environmental, and social benefits. It emphasizes that effectively
addressing climate change in agrifood systems requires a comprehensive and
customized financing approach that aligns with the specific needs and priorities
of different regions and sectors.
To accomplish this,
the authors stress the importance of understanding the most suitable financial
instruments and the appropriate allocation of climate finance to different
sectors, a crucial step in pursuing global climate objectives while also
responding to local needs and contexts.
The strategic
allocation of resources across various aspects of agrifood systems can
contribute to achieving climate change mitigation and adaptation goals,
promoting sustainable food production, and ensuring food security, the report
argues.
Into the future
Within the United
Nations Framework Convention on Climate Change (UNFCCC) there is a financial
mechanism aimed at helping countries tackle the harmful impacts of climate
change on their agrifood systems. This includes support from the Global
Environment Facility (GEF) and the Green Climate Fund (GCF).
According to the
authors, the recent establishment of a new fund specifically for Loss and
Damage signifies a commitment to assist developing nations, especially those
highly susceptible to climate change impacts. A report launched earlier in the
week by FAO underlined that this development should signal growing
opportunities for agrifood systems to address the challenges posed by the climate
crisis on agriculture and food security.
FAO is working to help
address the financing gap through the Food and Agriculture for Sustainable
Transformation Partnership, known as the FAST Partnership.
Stemming from a COP27
Initiative, FAST highlights the importance of collective efforts to improve the
quantity and quality of climate finance, ensuring that climate investments
reach the most vulnerable, particularly family farmers who often face the
impacts of climate change.
The inception meeting
of the FAST Partnership took place today at a Presidency Roundtable on the
Food, Agriculture and Water thematic day at COP28 and saw the participation of
Ministers and High-level representatives of FAST Partnership Member countries
and organizations.
FAO will facilitate the FAST Partnership through a Task Force serving as a Secretariat at its headquarters in Rome, supporting its activities.
Source: Online/GFMM
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