IFAD Research Series 92: Climate Change Mitigation in the East and Southern Africa Region: An Economic Case for the Agriculture, Forestry and Land Use Sector

Giacomo Branca and Paxina Chileshe

No 337206, IFAD Research Series from International Fund for Agricultural Development (IFAD)

Abstract: The achievement of the goal of zero hunger by 2030 can be facilitated through green growth investments in the agriculture, forestry and land use (AFOLU) sector. Significant levels of finance are needed to support countries to implement such strategies and fulfil the commitments made in their Nationally Determined Contributions (NDCs), and private finance remains a key source. This report is a useful guide to shape investments by IFAD, and other international donors, in climate change mitigation actions in the East and Southern Africa (ESA) region. We quantify the ESA countries’ mitigation commitments with a focus on the AFOLU sector and introduce cost-effectiveness criteria to evaluate such capacity, also in view of attracting private financing. Our results show that most emissions in the region come from the energy sector, followed by AFOLU. Full implementation of conditional and unconditional mitigation targets set forth in the NDCs would limit the increase in regional net emissions to about 20 per cent above the baseline. We argue that mitigation investments can be prioritized to enhance the efficiency of available financing (economy of scope), maximize the mitigation results (economy of scale) and create synergies with economic development needs. However, trade-offs exist from the perspective of social equity and economic development goals. In its 12th replenishment cycle, IFAD has increased its focus on mitigation. In line with this, we find that investment in AFOLU is a profitable way to invest in climate change mitigation, being more competitive than energy and other sectors in attracting mitigation finance. Investing in mitigation through AFOLU is certainly more feasible given the increasing prices recorded in the carbon market. Revenues from this market may provide the necessary resources to fill the funding gap and drive a competitive restructure of the AFOLU sector to help achieve the Sustainable Development Goals. Prioritizing low-income countries would minimize the trade-offs and enhance the synergies between mitigation and economic development, therefore supporting socio-economic growth.

Keywords: Agricultural Finance; Community/Rural/Urban Development; Food Security and Poverty (search for similar items in EconPapers)
Date: 2023-07-01
New Economics Papers: this item is included in nep-agr and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:unadrs:337206

DOI: 10.22004/ag.econ.337206

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