FAO: Background Paper on Financial Mechanism for the Food and Agriculture Sectors
28 May 2008: The Food and Agriculture Organization of the UN (FAO), jointly with the International Fund for Agricultural Development (IFAD), have prepared a background paper on financial mechanisms for adaptation to, and mitigation of, climate change in the food and agriculture sectors. The paper was prepared for the High-Level Conference on World Food Security, which will take place in Rome, Italy, from 3-5 June 2008.
Referring to the 2007 UNFCCC paper on financial and investment flows to address climate change, FAO and IFAD estimate the costs for climate change adaptation and mitigation in the agriculture and forestry sectors in developing countries at approximately US$100 billion per year in 2030. To improve existing financial mechanisms, the paper suggests: enhancing voluntary markets and enlarging the Clean Development Mechanism; linking mitigation and adaptation through the development of ‘premium credits;' mainstreaming offsets into national development plans; and leveraging development resources and targeting new funds. The paper also proposes a number of steps that could be considered by FAO, IFAD and partners, including:
- raising awareness of the potential, within the agriculture and LULUCF sectors, for synergies among options for reducing GHG emissions, carbon offsetting, adapting to climate change and achievement of the Millennium Development Goal of poverty and hunger reduction;
- advocating for broadening the scope of the financial mechanisms under the UNFCCC and Kyoto Protocols, so that they are inclusive of LULUCF;
- undertaking work on technical methodologies related to baselines, verification and measurement, as well as challenges such as reversibility and leakage in the agriculture and forestry sectors; and
- exploring how larger financial flows than are currently possible under the existing carbon market could be created, by adding a range of land-based activities within post-2012 climate mitigation and adaptation mechanisms, in particular reduced deforestation and degradation (REDD), agricultural land restoration and soil carbon sequestration, agroforestry, and many land conservation practices, which are of direct relevance to the Bali Roadmap.