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Delve into financing strategies for Agriculture, Forestry & Land Use, addressing challenges & unlocking funds. Key organizations & financing sources revealed - a comprehensive guide.
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Financing Low Emission Development in the AFOLU Sector Jeremy Broadhead Senior Forestry and Land Use Policy Advisor USAID LEAF Regional Forum on Developing and Financing Low Emission Development Strategies for the Agriculture, Forestry and Other Land Use Sector: Moving from Promise to Practice Bangkok• 7-9 July 2015
Climate change and AFOLU • In 2010 24% of global GHG emissions were from AFOLU • In ASEAN the figure was 58% Source: IPCC 5th Assessment Synthesis Report
Overview • Why the financing gap? • Financing considerations • Financing sources and challenges • The way ahead
Why the financing gap? • Insufficient finance and lack of demand for emissions reduction/green goods? • Lack of political will? • Wrong mechanisms? • Weak land tenure and law enforcement? • Lack of clear institutional responsibilities? • Lack of capacity/experience?
Financing considerations • What kinds of financing are available? • What are the main sources of financing? • International public • Domestic public • Private • Who are the recipients? • E.g. NGOs, government, large companies, SMEs • What type of activities require financing? • Creating an enabling environment or • Producing an asset e.g. emissions reductions or “green” goods • How well developed is the policy and institutional environment? • Financial and monitoring framework in particular • At what stage of maturity is the initiative?
Key questions • Will the investment generate a financial return? • Do the activities have the potential to leverage private finance? • Is supporting infrastructure in place?
International Public Finance • Technical support and institutional and capacity building • GCF, UN-REDD, FCPF-RF, NICFI • Non-results-based support to AFOLU mitigation • GEF, FIP • Non-market results-based finance • Bilateral assistance (Norway, Germany) • Carbon payments • FCPF-CF, WB BioCarbon Fund
Key challenge: Low disbursement rates • Improve capacity to transparently implement and monitor activities on the ground • Clarify domestic institutional responsibilities (e.g., between environment and forestry ministries) • Resolve land tenure issues • Improve effectiveness and coordination of multilateral REDD+ institutions
Private Finance • Purchase and sale payments • Carbon market finance • Foundations • Impact investors
Key challenge: Lack of reach • Find ways to increase positive off-farm impacts • Increase market share and improve environmental sensitivity of markets Also: • Provide regulatory support to help realize price premium • Improve certification standards and implementation
Domestic Public Finance Governments often the main investors in AFOLU through: • Subsidies and indirect finance • Concessional loans • Equipment and training • Financing sector governance
The way ahead • Begin by assessing and targeting financing • Leverage private financing • Implement domestic subsidy reforms and policy support • Encourage collaborative action between domestic, international and private actors • Keep learning and moving forward!
Day 2 agenda • International Climate Change Financing for Land Use: Beyond a Paris Agreement • Private Financing for Land Use in Southeast Asia • Parallel sessions: Innovative financing • Low Emissions Business Models • Voluntary Sustainability Initiatives • Financing Forest Conservation • Working groups: Addressing the financing gap • Subnational • National • International • The roles of public and private financing in closing the financing gap and funding AFOLU LEDS (presentations and discussion)