Blogs, Systems Thinking

Why climate finance funding must focus on food systems transformation

Every year, Earth Day’s annual theme provides an opportunity for us to reflect on the biggest challenges facing the planet. This year, the theme is investment, calling on leaders in business, government, and civil society to invest in a sustainable future. 

This theme reflects a call to action from Global South countries: for wealthy countries to provide more climate finance, so they can adapt to baked-in climate impacts and pursue low-carbon development pathways. In 2021, climate finance reached $632 billion, and continues to rise, but more is still needed – and better distribution is required. This is true of climate finance channelled to Global South countries, and the mechanisms that are used, but also where that money is put. The vast majority of climate finance is spent in the energy and transport sectors; meanwhile, food systems – which account for one-third of global greenhouse gas emissions – receive just 3%.

Current food systems, and their focus on high yields, use of pesticides, concentrated livestock production, and extractive land and water practices, are contributing significantly to climate change, and are the main driver of biodiversity loss.

To transform food systems, we must mobilize public and private funding, and design innovative investment and finance models that will redirect finance toward climate mitigation, adaptation and frontline communities. One way to do this is by investing in shared ownership and cooperative models that are committed to delivering fair and inclusive returns for all parties. 

Zambian company Sylva Food Solutions is a good example of how it’s possible to popularize traditional food by partnering with over 25,000 smallholder farmers. After founding a catering business heavily focused on Western dishes, Sylvia realized she wanted to change people’s mindsets so they would start appreciating Indigenous food. 

Sylvia wanted to connect this with traditional farming methods in Zambia, and has worked to increase the consumption of traditional food. She trains smallholder farmers in food preservation techniques and business practices, and has established production standards with farmers for dried vegetables and maize. As a result, she has been funded by numerous NGOs and international financial institutions so she can purchase equipment and expand her training. 

We must channel public climate finance into food systems in order to support policies, programs, and projects that deliver on climate goals and a host of co-benefits for biodiversity, health, and food system resilience. Well-structured and planned climate finance can enable the protection and restoration of nature, the adoption of agroecological practices, the shift to healthier diets, a reduction in food waste,  stronger rural livelihoods, and local food systems. 

But food systems are historically underfunded, and most of the public – and private – finance that is currently invested in agricultural production actually ignores, and exacerbates, harmful environmental impacts on climate, biodiversity, health, and food systems resilience. This can reinforce the unequal distribution of value in already unequal food systems, and, consequently, inhibit the opportunities available to, and investment in, rural communities, perpetuating poverty and limiting farmers’ efforts to become more sustainable.

There is huge scope for governments to do more to direct climate funding towards food systems transformation. One approach is to redirect public finance and leverage private finance towards activities that align with countries’ Nationally Determined Contributions (NDCs), which are crucial to achieving long-term climate goals. 

NDCs should outline food system performance measures, including health, social, and other environmental targets. But while most developing countries’ NDCs include measures relevant for food systems, only around one quarter specify the finance required to implement these measures. Very few NDCs clearly mention planned measures for mitigation and adaptation in food systems, hindering their ability to demand more climate finance. 

NDCs that properly consider food systems are able to play a central role in directing finance since they assure donors and investors that finance is aligned with a host country’s priorities. 

For example, Kenya’s NDC aims to reduce national GHG by 32% by 2030. This is estimated to require $60bn, 87% of which needs international support. The NDC contains mitigation measures that could contribute to food systems transformation, and states scaling up nature-based solutions, and climate-smart agriculture as strategies to do so. It includes measures to build the resilience of agricultural systems through managing the land, soil and water sustainably, and strengthening early warning systems for weather events. 

Kenya’s National Climate Action Plan outlines the budgets for implementing its various objectives. Between 2018 and 2022, promoting adaptive and mitigation capacities in agriculture required $240m, while improving food and nutrition security required $34m. By linking agroecological actions to climate adaptation and mitigation, Kenya is mobilizing climate finance for food systems transformation.

Policymakers can also make investments conditional upon achieving environmental and social outcomes and/or use public finance to de-risk investments that yield high social and environmental returns but have longer payback periods. 

Transforming the world’s food systems represents the single greatest opportunity to reduce global greenhouse gas emissions and build more sustainable, resilient, and just communities. As we reflect on Earth Day, let’s accelerate these climate solutions that already exist.