19 November 2024, London — A report released at Food, Water, and Agriculture Day at COP29 today finds that global agrifood systems are massively underfunded and require USD 1.1 trillion annually to align with a low-emissions and climate-resilient development trajectory. The joint analysis by the ClimateShot Investor Coalition (CLIC) and the Food and Agriculture Organization (FAO) highlights that investments in sustainable agrifood systems must increase by nearly 40 times from current levels, making agrifood systems one of the most underfunded sectors for climate finance.
The Triple Gap in Finance for Agrifood Systems report also finds that governments have drastically underestimated agrifood systems investment needs in their Nationally Determined Contributions (NDCs). Current NDCs suggest an annual climate funding need for agrifood systems of USD 201.5 billion—far below this estimate of USD 1.1 trillion. With the next round of NDCs due for submission to the UNFCCC in 2025, the report urges national governments to weigh their climate targets against global goals to achieve the scale of investment needed in agrifood systems, the world’s second-largest source of global GHG emissions.
The report blends the sectoral and finance expertise of FAO and Climate Policy Initiative (CPI), which acts as the secretariat of CLIC, to understand the gaps between the current and required funding to transition agrifood systems. The report analyzes investment needs for agrifood systems using a dual approach: a “top-down” analysis of investment required to fund the actions needed in agrifood systems globally to limit the average global temperature rise within 1.5°C by 2050, and a “bottom-up” method that estimates the climate finance required by countries to achieve their national climate targets for agrifood systems as stated in their NDCs.
A comparison of the findings from these two approaches reveals three gaps in transitioning agrifood systems: planning, finance, and data. First, the discrepancy between top-down climate finance needs estimates and bottom-up agrifood finance targets implies a planning gap in countries’ current NDCs. Second, the scale of investment required to transition agrifood systems dwarfs current financial flows, indicating a finance gap in transitioning the sector. Lastly, the dearth of accurate information on climate finance flows and estimates for agrifood systems exposes a data gap that hampers NDCs and other investment planning.
“Current climate investments in global agrifood systems are so low that scaling them up to the needs expressed in the bottom-up analysis would be a significant policy achievement and business opportunity,” said Barbara Buchner, CPI’s Global Managing Director. “However, financial flows must reach the levels estimated by the top-down approach to keep them on a low-emissions and climate-resilient pathway. The longer we delay deploying capital for agrifood systems, the more the cost of addressing those issues increases, along with greater disruptions to supply chains and food security globally.”
“Agrifood systems hold the solutions to major interlinked challenges facing people and the planet: climate change, biodiversity loss, land degradation, and food insecurity,” added Kaveh Zahedi, FAO’s Director of Climate Change, Biodiversity and Environment. “However, the scale of current investments fails to do justice to their potential. Given the urgency of the climate crisis, directing finance for sustainable and resilient agrifood systems and ensuring this finance effectively reaches agricultural communities is the most effective investment in climate action.”
“Agrifood systems are in desperate need of adaptation as climate change continues to impact smallholder farmers, yet climate finance is not being channelled towards this,” commented Professor Charlotte Watts, Chief Scientific Adviser, Foreign, Commonwealth & Development Office. “CLIC’s important research underlines that we must act urgently if we are to address both food insecurity and the climate crisis. As governments update their NDCs for 2025, action is crucial to ensure that our agrifood systems can withstand the climate emergency.”
Contact
Mallika Pal
Senior Communications Associate
mallika.pal@cpiglobal.org
About Climate Policy Initiative (CPI) & ClimateShot Investor Coalition (CLIC)
Climate Policy Initiative (CPI) is an analysis and advisory organization with deep expertise in finance and policy. Our mission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change. CPI has seven offices around the world in Brazil, India, Indonesia, South Africa, the UK, and the US. The ClimateShot Investor Coalition (CLIC) is a global coalition working to accelerate and scale finance for low-carbon, climate-resilient, and nature-positive agriculture and food systems globally. CPI is the Secretariat of CLIC. CLIC is funded by UK International Development of the Foreign, Commonwealth, and Development Office (FCDO).
About Food and Agriculture Organization
The Food and Agriculture Organization (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger. FAO’s goal is to achieve food security for all and make sure that people have regular access to enough high-quality food to lead active, healthy lives. FAO seeks to support the 2030 Agenda through the transformation to more efficient, inclusive, resilient, and sustainable agrifood systems for better production, better nutrition, a better environment, and a better life, leaving no one behind. With 195 members – 194 countries and the European Union –, FAO works in over 130 countries worldwide.
