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Archive for the ‘Finance’ Category

The UN Secretary General called a meeting to report from his high-level advisory group on climate change financing. The group has been chaired by the Prime Minsters of Norway and Ethiopia, who were also present.

The group was created to follow up on Copenhagen and its work is done with the release of the report at this meeting.

Not surprisingly, the group concluded that it is possible to mobilize the stipulated 100 billion $ per year, provided the Carbon price will hover at 20-25 $ per ton. The report does not, however, suggest any delivery mechanism, although it identifies the multilateral banks and the UN system as key providers, which is also hardly surprising, but also a consolation for us that try to gear up the multilateral delivery.

The report does not go into the issue of combining finance flows for different development objectives as discussed earlier on this blog and in the context of climate-smart agriculture. Given that investments in agriculture alone is 370 billion $ per year already, one must conclude that the report does not provide a holistic view. It is a report looks at climate finance in isolation, just as intended.

I note that the report, in its executive summary, talks about “arresting and reversing the destruction of rainforests” Which seems to be another way of looking at REDD+…

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Investments requirements in agriculture and the land based sectors are very large. FAO has estimated it to $210 billion per year until 2050. These investment analyses do not generally include climate change aspects. By comparison, finance needs for climate change adaptation in agriculture has been estimated to $7 billion annually, and investments for agriculture mitigation to $12-14 billion per year The difference in magnitude  may raise some concern for those engaged in agriculture and climate change.

If we want “climate-smart” agriculture and land use across the board to reduce the current impact of these sectors (one third of overall emissions!), it seems necessary to have the more substantial and largely non-climate investments address also climate change.

The question is how. Clearly, the drive to increase, improve and secure agriculture production is very strong, both from a political, market and human perspective. In many cases it appears as mechanisms such as REDD+ will not by itself be able to financially compete with other land management objectives.

The answer may lie in combining financing opportunities to achieve both development goals such as food security, and at the same time generate mitigation actions (or at least consider the climate impact that investments may have). This was discussed in the FAO paper to the Hague conference.

FAO has worked for some time, together with countries, the World Bank and other partners, to pilot how to include the carbon balance in all types of agriculture and forestry development projects (the EX-ACT tool). Through such analyses, a seed is sown for attracting climate finance as a complementary funding stream.

Addressing food and climate together seems indeed to be a sensible approach.

Blogged by Peter Holmgren

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REDD+ was all but agreed in Copenhagen. A well established concept, an almost finalised negotiation text and several billion dollars of start-up finance provided a considerable momentum. However, a broader climate change package, of which REDD+ would be part, was not decided. Instead the Copenhagen accord was instituted and the prospect of a comprehensive climate deal has slowed down considerably.

In this situation, many countries agreed to establish the Voluntary REDD+ Partnership, to take REDD+ forward. The partnership was established in Oslo in May. The UN-REDD agencies (FAO, UNDP and UNEP) and the World Bank were asked to provide secretariat services to the partnership.

One of the key outputs of the REDD+ Partnership is a consolidated database on REDD+ Finance, Actions and Results. FAO and UNEP has undertaken to develop this database, drawing from reports provided by countries and organizations. The purpose of the database is to increase transparency and help improve analyses of REDD+ finance and actions, and also to share experiences of REDD+.

At the moment, the database contains REDD+ finance information from 60 donor and 103 recipient countries and institutions, totalling about 11.6 billion dollars. You may ask where these numbers come from – it is much more than the 4 billion or so that have been pledged? There are two important considerations:

1. The database contains finance beyond the scope of the original pledges, for example domestic funding of REDD+ actions, and international contributions through GEF. It is important to note that it is up to the partners to define the finance that they want to include in the database

2. For transparency and data ownership reasons, the database contains reports both from donors and recipients, which means that some numberss are reported twice. This is as it should, but some caution is warranted before using the data for further analyses.

In the next phase, the database will be expanded to include actions and results. This requires further thought on concepts and reporting. The REDD+ database is increasingly a source of authoritative information on REDD+.

On Tuesday 30 November, the REDD+ partnership is organizing a side (parallel) event in Cancun (info here), including a presentation of the database.

Blogged by Peter Holmgren

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Missed the boat. Twice.

First, the international community missed one boat.

Agriculture was not considered to be part of the problem.

So it was left outside the huge cruising ship of negotiators working to cut a deal to cut emissions.

Then it missed another one.

Adapting agriculture to new climate challenges is crucial. Says everyone. But with focus of media and money on short term gains, ships have left to handle emergencies and disasters.

We should be more focused on what we need in the long term. Resilient agriculture practises. Enough food. Improved seeds. Water.

Perhaps there is another boat waiting.

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