Revolutionizing Funding for Climate-Adaptive, Water-Resilient Food Systems

In a recent white paper by the International Fund for Agricultural Development and the NDC Partnership, a range of options has been outlined to enhance both mitigation and adaptation ambition and to secure access to finance for implementation. A key focus of the paper is the importance of benefit-sharing, building for bankability, investment bundling, and blending.

The World Climate Action Summit has played a pivotal role in bringing together international leaders to prioritise sustainable agriculture and resilient food systems in the fight against climate change. With the COP 28 UAE Presidency advocating for the urgent need to transform agriculture and food systems, it is evident that immediate action is necessary to address climate change imperatives.

It is imperative to acknowledge the critical role of water in building resilient food systems for climate adaptation and mitigation. It is shocking that 60% of all adaptation-related concerns globally are water-related. Despite this, climate finance for small-scale agrifood systems only amounted to 0.8% of total climate finance in 2019-2020, despite the sector contributing around one-quarter of global greenhouse gas emissions.

As countries globally demonstrate significant political will to tackle these challenges, there are two fundamental requirements to translate commitment into action. Firstly, countries must be empowered to raise both their mitigation and adaptation ambition through these opportunities. Secondly, they need access to finance to implement these commitments. It is at this juncture that the white paper from the International Fund for Agricultural Development and the NDC Partnership becomes integral.

The concept of climate-adaptive water-resilient food systems (CAWFS) emphasizes the need for sustainable water use and management to ensure consistent and adaptable food production. Long-term sustainability takes precedence over short-term land-use productivity by striking a balance between crop yields and ecosystem preservation.

The white paper outlines a strategic approach to address the substantial gap in food systems and water infrastructure finance. It offers a method to tackle the core problems hindering private investment and development, addressing both structural and project-level barriers. Notably, the 4×4 framework, consisting of four actionable steps (the “Four Bs”) and four investment pathways, is a crucial element of this approach.

The “Four Bs” encompass benefit-sharing, investment bundling, building for bankability, and blending. These steps are crucial to ensure that gains from improved water management are shared inclusively and equitably among all stakeholders, pool assets to support aggregated investments in food and water, ensure that projects are feasible and profitable to attract investment, as well as combine public and philanthropic funds with private investment to mitigate risk.

Coordinated multilateral, bilateral, and philanthropic investments are essential to attract private investors and close the financing gap in food systems and water infrastructure. This comprehensive approach will not only maximize investment use and return but also build sustainable and climate-resilient food systems globally.

As we move forward, it is clear that climate-adaptive, water-resilient food systems must be part of the solution to address the climate crisis. This is the time to adopt an innovative approach to financing that will strengthen economic opportunities and improve livelihoods, especially for the most climate-vulnerable populations.

In conclusion, it is crucial to acknowledge the expertise behind the white paper. Pablo Vieira, the NDC Partnership Global Director, and Jyotsna Puri, Associate Vice-President with the Strategy and Knowledge Department at IFAD, have been instrumental in highlighting the significance of climate-adaptive water-resilient food systems in addressing the global climate challenge. Their contributions have further emphasized the urgent need for innovative funding models and climate-resilient solutions.

In conclusion, the challenges posed by climate change require innovative and strategic approaches, and the white paper serves as a vital resource in paving the way for sustainable and climate-resilient food systems.