I’m in Bangkok at a regional gathering of eight country governments from Southeast Asia all working to accelerate climate-smart agriculture and forestry in the region. It is a critical effort, affecting the lives and livelihoods of billions of people. The urgency of the task cannot be overstated.
By 2100, Asia will likely see a six degree Celsius temperature increase, drastically affecting water availability, food production, and ecosystem function. In some Southeast Asian countries, rice yields could decline by up to 50 percent, threatening food and economic security for some of the world’s most vulnerable communities. At the same time, global food production must increase by 70 percent by 2050 to feed a projected world population of 9.1 billion. The production of wood and other forest products must increase as well, while also protecting the species, habitats, and essential ecosystem services that forests provide.
The solution lies in climate-smart approaches to agriculture and forestry, which strengthen resilience to climate change impacts, reduce greenhouse gas (GHG) emissions to mitigate global climate change, and increase productivity to deliver more food to domestic and regional markets. Our challenge, however, is to align public and private sector investments for a climate-resilient, food-secure future. This week in Bangkok, ministries of agriculture, environment, and finance have joined forces with banks, investors, and donors to highlight cutting-edge strategies, share lessons learned, and chart a collective path to beat the odds. Here’s what we’re learning.
The Importance of Public-Private Sector Collaboration
Asia is a powerhouse of global economic growth, and increasingly is leading in our global progress to address climate change. Governments in Southeast Asia are committed to implementing their national climate change targets under the Paris Agreement and are actively working to reduce GHG emissions, while also meeting increasing demands for food and forest products.
Leading corporations, financial institutions, investors, and enterprises have embraced the business case for climate action, with growing commitments to scale up climate-smart approaches in the region. In the forestry sector, companies have committed to move toward net zero deforestation in key commodity supply chains by 2020. In food production, agribusiness leaders have pledged to make 50 percent more food available while reducing GHG emissions 50 percent by 2030.
In Asia’s dynamic markets, however, companies with supply chains that often span multiple countries face many challenges to achieving their climate-smart goals. Understanding these challenges and identifying priority actions to overcome them is critical to mobilizing the investment and finance needed in the coming years.
Top Challenges to Mobilizing Private Sector Investment
Over the past six months, the USAID Climate Economic Analysis for Development, Investment and Resilience (CEADIR) Activity convened private sector leaders in Southeast Asia to identify the top challenges limiting investment in climate-smart agriculture and forestry in the region. These fell into four key themes.
- Finance: Smallholder farmers, small agribusinesses, and small and medium sized enterprises (SMEs), which comprise a large portion of the region’s supply chains, have limited access to finance, significantly constraining their ability to invest in climate-smart practices.
- Communication: There are limited channels for financial institutions, businesses, and smallholder farmers to exchange views with governments on policy support needed to scale climate-smart approaches and investment.
- Capacity building: Significant capacity strengthening needs exist in both the private and public sectors to enable climate-smart investment and finance at scale.
- Data: To track progress toward national climate change commitments under the Paris Agreement, governments and the private sector need a systematic way to aggregate, report and verify GHG reductions in agricultural and forestry value chains.
Priority Actions to Scale Investment
Reflecting on these challenges, private sector leaders in the region identified near-term actions to enable investment and finance for climate-smart agriculture and forestry production at scale, aligned with national climate change targets. Ranked in priority order, the top six actions include:
- Finance: Identifying pathways and solutions to enable SMEs to access financing.
- Communication: Facilitating more regular dialogue between national-level policymakers with business and smallholder farmers.
- Policy: Developing and implementing policies that incentivize (or penalize) companies that pursue (or do not pursue) climate-smart approaches.
- Data: Improving data sharing with farmers and upstream commodity producers, including data on weather and best practices for climate-resilience.
- Data: Aggregating, reporting and verifying GHG emission reductions achieved by all stakeholders towards national climate change commitments to track progress.
- Communication: Finding a common “language” or understanding on climate change actions between the private sector and government.
In connecting with many of these leaders again here in Bangkok this week, I am excited to see momentum build on these recommendations. Looking ahead to 2018, when the world will take stock of our collective progress under the Paris Agreement, the time is right to strengthen public-private sector collaboration aligned with our shared goals.
For more information, see USAID CEADIR resources available on the USAID Development Experience Clearinghouse, a May 2017 CEADIR Series webinar, and materials from the October regional workshop on Climate Action for Agriculture in Asia.