Opportunities to Target and Coordinate Finances and Investment to make Climate Services Work

for Smallholder Farmers Across Africa

Justus Kabyemera, PhD Coordinator- ClimDev- Africa Special

Fund (CDSF), African Development Bank

Organization of the Talk

•Facts about Climate Change and Smallholders

•Why Climate Financing to Smallholders Farmers?

•Climate Adaptation v/s Mitigation Approaches by Smallholder Farmers

•Opportunities for Climate Finance to Smallholder Farmers in Africa

•Challenges and Opportunities for Targeting Climate Financing for Smallholder Farmers

•Climate Change Financing Instruments

•Future of Climate Financing for Smallholder Farmers

Facts About Climate Change and Smallholder

Farmers

Climate change will expose 75-250 million more people to increased water stress by 2020 in Africa. Sahel region has experienced a 25% decline in rainfall since 1960s. Food production needs to increase by 70% by 2050, but the total arable

area in in SSA and Latin America may increase by no more than 12%. 95% of African agriculture is rain-fed. Number of people affected by climate-related humanitarian crisis to

increase by 54% to 375 million by 2020.

About 500 M smallholder farms in the world. Smallholders produce > 80% of food in Asia and

and Sub-Saharan Africa. Climate finance: $22 billion spent on climate

adaptation and $337 billion spent on climate mitigation (2013).

Why Financing to Smallholder Farmers?

To enable smallholder farmers to adapt

to climate change, increase agricultural

productivity and improve their food

security and livelihoods, contribute to

climate change mitigation through carbon

sequestration.

Agriculture is directly responsible for 14 per cent of total greenhouse

gas emissions, and broader rural land use decisions including

deforestation accounts for an additional 18 per cent of emissions.

Despite sharing little responsibility for global warming, smallholder

farmers in developing nations are most vulnerable to climate change

and will disproportionately suffer from its effects.

Justification for Combined Climate Adaptation and Mitigation Approaches

• Adaptation cost study by the World Bank and IFPRI indicates

additional agricultural adaptation investment needs in Sub-Saharan

Africa, the Near East and North Africa is in the range of US$3

billion/year

• Climate change adaptation for African countries is more important

than mitigation, but the fact that agricultural mitigation practices

related to sustainable land and water management often result

simultaneously in mitigation and adaptation benefits justifies actions

to enhance mitigation investments.

The Share of Climate Financing for Adaptation v/s Mitigation

• Figure

Climate Finance Instruments – Globally and at the AfDB

There is a proliferation of multilateral and bilateral climate finance instruments that have been created in recent years. But few are accessible for smallholder climate financing including:

• The Green Climate Fund: To reach $ 100 billion (now at $ 10 billion) both for adaptation and mitigation.

• The Adaptation Fund – Finances concrete adaptation projects and programmes in developing countries that are Parties to the Kyoto Protocol

• GEF Least Developed Countries Fund - US$169 million - Address climate change issues of least developed countries.

• GEF Seed Capital Assistance Facility - US$10.5 million - Provide seed financing to early stage clean energy enterprises and projects

• GEF Special Climate Change Fund - US$110 million Support technology transfer projects and programmes for sustainable development

Climate Finance Instruments – Globally and at the AfDB

Nordic Development Fund – €1.0 billion - Facilitate climate change

investments in low-income countries

WB Clean Technology Fund - US$4.5 billion Development and

deployment of low-carbon technologies.

WB-Scaling-up Renewable Energy-US$318 million Assist low income

countries develop low carbon strategy

Climate Finance Instruments – Globally and at the AfDB

The African Water Facility (AWF): Mainstream proofing against climate change and other safeguards and leverage financing that enables water and climate change adaptation and mitigation

ClimDev-Africa Special Fund (CDSF): scale up the capacities of key institutions and stakeholders to improving climate-related data and observation – ranges 200,000 and 5 M Euro

The Pilot Program for Climate Resilience: Support countries to integrate Climate risk and resilience into core Development Planning

The Africa Climate Change Fund (ACCF) - support transition to climate-resilient and low-carbon development.

Challenges and Opportunities for Targeting Climate Financing for Smallholder Farmers

Challenges for Climate Financing to Smallholder Farmers

Smallholders face significant risks and barriers that limit their access to

climate finance, including:

Insecure land tenure and the high cost of implementing projects.

high up-front costs for infrastructure, skills development for farmers

and strengthening of institutions.

Difficulties in accessing relevant data and information.

Special requirements to access global climate funds (CDSF

Experience).

Opportunities: Climate Smart Agriculture (CSA)

Concept: Agriculture- that sustainably increases productivity, resilience (adaptation), reduces/removes greenhouse gases (mitigation), and enhances achievement of national food security and development goals. For smallholder farmers in developing countries, the opportunities for

greater food security and increased income together with greater resilience will be more important to adopting climate-smart agriculture than mitigation opportunities.

CSA seeks to enhance the capacity of the agriculture sector to

sustainably support food security, incorporating the need for adaptation and the potential for mitigation into development strategies.

Opportunities: Existence of NAPs, NAPA, NAMAs and NAFSIPs

A number of Government Initiatives have been undertaken to facilitate climate change related activities:

National adaptation plans (NAPs): Enable developing countries to Identify medium- and long-term adaptation needs and develop and implement strategies and programmes to address those needs.

National adaptation programmes of action (NAPAs): A process for the least developed countries to identify priority activities that respond to their urgent and immediate needs with regards to adaptation.

Nationally Appropriate Mitigation Actions: NAMAs are actions by developing country Parties aimed at achieving a deviation in emissions relative to 'business as usual' emissions in 2020.

National Agriculture and Food Security Investment Plans (NAFSIPs): to integrate the scaling up of practices that augment development, food security, and climate change adaptation and mitigation.

Intended Nationally Determined Contributions (INDCs): Post-2020 climate actions by Countries to achieve 2015 agreement for a low-carbon, climate-resilient future.

Opportunities: New and Additional Climate Financing Mechanisms

• Innovative Financing Mechanisms: new

approaches for pooling private and public revenue

streams; Public/Private Partnerships; new revenue

streams, new incentives to address market failures,

blend funds, Co-financing, etc. (Harness Current)

• New and Additional Financing: contentious due to

clash with ODA

• Inclusive Business Finance: capital that supports

the creation, growth, and sustainability of small

holders and small enterprises.

What Needs to be Done Post COP-21?

Build the capacity of national and subnational agencies accredited, or seeking accreditation.

Devolve funding and decision making to local government levels.

National Level Initiatives/Strategies

Facilitate inclusive adaptation

planning and monitoring

Use a climate finance marker against both budget allocations and actual spend for adaptation and mitigation actions

What Needs to be Done Post COP-21?

International Level Initiatives/Approaches Recognize and correct the continuing imbalance between adaptation

and mitigation in the allocation of international climate finance.

Agree a climate finance package at COP21 in Paris that raises the

confidence of African nations on the provision of predictable,

sustainable, adequate and additional climate finance post-2020.

Agree on a climate finance package that includes a commitment to a

50 percent floor for the adaptation allocation from public funds in the

$100bn goal by 2020 and thereafter.

Ensure funding entities such as the Green Climate Fund (GCF) support

the types of programmatic – rather than project-by project –

approaches needed to scale up adaptation actions that support the

most vulnerable communities at the local level

THANK YOU