Shifting finance towards sustainable land use: Aligning public incentives with the goals of the Paris Agreement

Shifting finance towards sustainable land use: Aligning public incentives with the goals of the Paris Agreement

Globally, agriculture, forestry and other land use (AFOLU) drive about one-quarter of annual greenhouse gas emissions. A move away from business-as-usual land use can provide up to 15 GtCO2e annually in emission reductions and removals by 2050. 

To achieve this significant mitigation potential government finance must align with the goals of the Paris Agreement. Governments steer land use activities by providing public financial support to certain agricultural activities or products, and by putting financial regulations in place to oversee and steer private finance. Most of this private money currently supports activities that deplete natural assets; and only a tiny portion of public finance is used to support mitigation activities. As long as this finance is not climate-aligned, efforts to lower the land sector’s emissions trajectory will not succeed.

This new report illustrates how public finance influences land use practices and associated greenhouse gas emissions, and showcases how policy instruments affecting land use can be redesigned to consider climate goals. It focuses in particular on redirecting agricultural subsidies, and financial markets that influence private financial flows to the land sector.

Download and read the report here.

About the project

A new, collaborative set of publications seeks to support governments in their efforts to reorient finance flowing to the land sector. Developed together with the United Nations Sustainable Development Solutions Network and ODI, the publications explore the impact of existing finance flows to the land sector, identify the most promising policy options available to governments to make these flows compatible with the Paris Agreement, and provide a reporting framework for State Parties to consider and adopt ahead of the 2023 Global Stocktake.

The full set of publications are available on the Food, Environment, Land and Development Action Tracker here.

The work is kindly supported by Norway’s International Climate and Forest Initiative (NICFI), implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).

Release Date

September 2021

Authors

Hilda Galt
Senior Consultant
Thiago Chagas
Lead Legal Consultant
Danick Trouwloon
Associate Consultant
Barbara Hermann
Legal Consultant
Felipe Bravo
Analyst
Charlotte Streck
Co-founder and Managing Partner