Editing IPCC:AR6/SRCCL/Chapter-7 (section)

== 7.4 Policy instruments for land and climate ==

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This section outlines policy responses to risk. It describes multi-level policy instruments (Section 7.4.1), policy instruments for social protection (Section 7.4.2), policies responding to hazard (Section 7.4.3), GHG fluxes (Section 7.4.4), desertification (Section 7.4.5), land degradation (Section 7.4.6), economic instruments (Section 7.4.7), enabling effective policy instruments through policy mixes (Section 7.4.8), and barriers to SLM and overcoming these barriers (Section 7.4.9).

Policy instruments are used to influence behaviour and effect a response – to do, not do, or continue to do certain things (Anderson 2010 <sup>[[#fn:r354|354]]</sup> ) – and they can be invoked at multiple levels (international, national, regional, and local) by multiple actors (Table 7.2). For efficiency, equity and effectiveness considerations, the appropriate choice of instrument for the context is critical and, across the topics addressed in this report, the instruments will vary considerably. A key consideration is whether the benefits of the action will generate private or public social net benefits. Pannell (2008) <sup>[[#fn:r355|355]]</sup> provides a widely-used framework for identifying the appropriate type of instrument depending on whether the actions encouraged by the instrument are private or public, and positive or negative. Positive incentives (such as financial or regulatory instruments) are appropriate where the public net benefits are ''highly positive'' and the private net benefits are close to zero. This is likely to be the case for GHG mitigation measures such as carbon pricing. Many other GHG mitigation measures (more effective water or fertiliser use, better agricultural practices, less food waste, agroforestry systems, better forest management) discussed in previous chapters may have substantial private as well as public benefit. Extension (knowledge provision) is recommended when public net benefits are ''highly positive'' , and private net benefits are ''slightly positive'' – again for some GHG mitigation measures, and for many adaptations, food security and SLM measures. Where the private net benefits are ''slightly positive'' but the public net benefits ''highly negative'' , negative incentives (such as regulations and prohibitions) are appropriate, (e.g., over-application of fertiliser).

While Pannell’s (2008) framework is useful, it does not address considerations relating to the timescale of actions and their consequences, particularly in the long time-horizons involved under climate change: private benefits may accrue in the short term but become negative over time (Outka 2012 <sup>[[#fn:r356|356]]</sup> ) and some of the changes necessary will require transformation of existing systems (Park et al. 2012 <sup>[[#fn:r357|357]]</sup> ; Hadarits et al. 2017 <sup>[[#fn:r358|358]]</sup> ) necessitating a more comprehensive suite of instruments. Furthermore, the framework applies to private land ownership, so where land is in different ownership structures, different mechanisms will be required. Indeed, land tenure is recognised as a factor in barriers to sustainable land management and an important governance consideration (Sections 7.4.9 and 7.6.4). A thorough analysis of the implications of policy instruments temporally, spatially and across other sectors and goals (e.g., climate versus development) is essential before implementation to avoid unintended consequences and achieve policy coherence (Section 7.4.8).

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=== 7.4.1 Multi-level policy instruments ===

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Policy responses and planning in relation to land and climate interactions occur at and across multiple levels, involve multiple actors, and utilise multiple planning mechanisms (Urwin and Jordan 2008 <sup>[[#fn:r359|359]]</sup> ). Climate change is occurring on a global scale while the impacts of climate change vary from region to region and even within a region. Therefore, in addressing local climate impacts, local governments and communities are key players. Advancing governance of climate change across all levels of government and relevant stakeholders is crucial to avoid policy gaps between local action plans and national/ sub-national policy frameworks (Corfee-Morlot et al. 2009 <sup>[[#fn:r360|360]]</sup> ).

This section of the chapter identifies policies by level that respond to land and climate problems and risks. As risk management in relation to land and climate occurs at multiple levels by multiple actors, and across multiple sectors in relation to hazards (as listed on Table 7.2), risk governance, or the consideration of the landscapes of risk arising from Chapters 2 to 6 is addressed in Sections 7.5 and 7.6. Categories of instruments include regulatory instruments (command and control measures), economic and market instruments (creating a market, sending price signals, or employing a market strategy), voluntary of persuasive instruments (persuading people to internalise behaviour), and managerial (arrangements including multiple actors in cooperatively administering a resource or overseeing an issue) (Gupta et al. 2013a <sup>[[#fn:r361|361]]</sup> ; Hurlbert 2018b <sup>[[#fn:r362|362]]</sup> ).

Given the complex spatial and temporal dynamics of risk, a comprehensive, portfolio of instruments and responses is required to comprehensively manage risk. Operationalising a portfolio response can mean layering, sequencing or integrating approaches. Layering means that, within a geographical area, households are able to benefit from multiple interventions simultaneously (e.g., those for family planning and those for livelihoods development). A sequencing approach starts with those interventions that address the initial binding constraints, and then adding further interventions later (e.g., the poorest households first receive grant-based support before then gaining access to appropriate microfinance or market-oriented initiatives). Integrated approaches involve cross-sectoral support within the framework of one programme (Scott et al. 2016 <sup>[[#fn:r363|363]]</sup> ; Tengberg and Valencia 2018 <sup>[[#fn:r364|364]]</sup> ) (Sections 7.4.8, 7.5.6 and 7.6.3).

Climate-related risk could be categorised by climate impacts such as flood, drought, cyclone, and so on (Christenson et al. 2014 <sup>[[#fn:r365|365]]</sup> ). Table 7.2 outlines instruments relating to impacts responding to the risk of climate change, food insecurity, land degradation and desertification, and hazards (flood, drought, forest fire), and GHG fluxes (climate mitigation).

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'''Policies/instruments that address multiple land-climate risks at different jurisdictional levels.'''
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=== 7.4.2 Policies for food security and social protection ===

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There is ''medium evidence'' and ''high agreement'' that a combination of structural and non-structural policies are required in averting and minimising as well as responding to land and climate change risk, including food and livelihood security. If disruptions to elements of food security are long-lasting, policies are needed to change practices.

If disruptions to food and livelihood systems are temporary, then policies aimed at stemming worsening human well-being and stabilising short-term income fluctuations in communities (such as increasing rural credit or providing social safety-net programmes) may be appropriate (Ward 2016 <sup>[[#fn:r480|480]]</sup> ).

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==== 7.4.2.1 Policies to ensure availability, access, utilisation and stability of food ====

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Food security is affected by interactions between climatic factors (rising temperatures, changes in weather variability and extremes), changes in land use and land degradation, and Socio-economic Pathways and policy choices related to food systems (see Figures 7.1 and 7.2). As outlined in Chapter 5, key aspects of food security are food availability, access to food, utilisation of food, and stability of food systems.

While comprehensive reviews of policy are rare and additional data is needed (Adu et al. 2018 <sup>[[#fn:r367|367]]</sup> ), evidence indicates that the results of food security interventions vary widely due to differing values underlying the design of instruments. A large portfolio of measures is available to shape outcomes in these areas from the use of tariffs or subsidies, to payments for production practices (OECD 2018 <sup>[[#fn:r368|368]]</sup> ). In the past, efforts to increase food production through significant investment in agricultural research, including crop improvement, have benefited farmers by increasing yields and reducing losses, and have helped consumers by lowering food prices (Pingali 2012 <sup>[[#fn:r1677|1677]]</sup> , 2015 <sup>[[#fn:r1678|1678]]</sup> ; Alston and Pardey 2014 <sup>[[#fn:r369|369]]</sup> ; Popp et al. 2013 <sup>[[#fn:r370|370]]</sup> ). Public spending on agriculture research and development (R&amp;D) has been more effective at raising sustainable agriculture productivity than irrigation or fertiliser subsidies (OECD 2018 <sup>[[#fn:r371|371]]</sup> ). Yet, on average, between 2015 and 2017, governments spent only around 14% of total agricultural support on services, including physical and knowledge infrastructure, transport and information and communications technology.

In terms of increasing food availability and supply, producer support, including policies mandating subsidies or payments, have been used to boost production of certain commodities or protect ES. Incentives can distort markets and farm business decisions in both negative and positive ways. For example, the European Union promotes meat and dairy production through voluntary coupled direct payments. These do not yet internalise external damage to climate, health, and groundwater (Velthof et al. 2014 <sup>[[#fn:r372|372]]</sup> ; Bryngelsson et al. 2016 <sup>[[#fn:r373|373]]</sup> ). In most countries, producer support has been declining since the mid-1990s (OECD 2018 <sup>[[#fn:r374|374]]</sup> ). Yet new evidence indicates that a government policy supporting producer subsidy could encourage farmers to adopt new technologies and reduce GHG emissions in agriculture ( ''medium evidence, high agreement'' ). However, this will require large capital (Henderson 2018 <sup>[[#fn:r375|375]]</sup> ). Since a 1995 reform in its forest law, Costa Rica has effectively used a combination of fuel tax, water tax, loans and agreements with companies, to pay landowners for agroforestry, reforestation and sustainable forest management (Porras and Asquith 2018 <sup>[[#fn:r376|376]]</sup> ).

Inland capture fisheries and aquaculture are an integral part of nutrition security and livelihoods for large numbers of people globally (Welcomme et al. 2010 <sup>[[#fn:r377|377]]</sup> ; Hall et al. 2013 <sup>[[#fn:r378|378]]</sup> ; Tidwell and Allan 2001 <sup>[[#fn:r379|379]]</sup> ; Youn et al. 2014 <sup>[[#fn:r380|380]]</sup> ) and are increasingly vulnerable to climate change and competing land and water use (Allison et al. 2009 <sup>[[#fn:r381|381]]</sup> ; Youn et al. 2014 <sup>[[#fn:r382|382]]</sup> ). Future production may increase in some high-latitude regions ( ''low'' ''confidence'' ) but production is likely to decline in low-latitude regions under future warming ( ''high confidence'' ) (Brander and Keith 2015 <sup>[[#fn:r383|383]]</sup> ; Brander 2007 <sup>[[#fn:r384|384]]</sup> ). However over-exploitation and degradation of rivers has resulted in a decreasing trend in the contribution of capture fisheries to protein security in comparison to managed aquaculture (Welcomme et al. 2010 <sup>[[#fn:r385|385]]</sup> ). Aquaculture, however, competes for land and water resources with many negative ecological and environmental impacts (Verdegem and Bosma 2009 <sup>[[#fn:r386|386]]</sup> ; Tidwell and Allan 2001 <sup>[[#fn:r387|387]]</sup> ). Inland capture fisheries are undervalued in national and regional food security, ES and economy, are data deficient and are neglected in terms of supportive policies at national levels, and absent in SDGs (Cooke et al. 2016 <sup>[[#fn:r388|388]]</sup> ; Hall et al. 2013 <sup>[[#fn:r389|389]]</sup> ; Lynch et al. 2016 <sup>[[#fn:r390|390]]</sup> ). Revival of sustainable capture fisheries and converting aquaculture to environmentally less-damaging management regimes, is likely to succeed with the following measures: investment in recognition of their importance, improved valuation and assessment, secure tenure and adoption of social, ecological and technological guidelines, upstream-downstream river basin cooperation, and maintenance of ecological flow regimes in rivers (Youn et al. 2014 <sup>[[#fn:r391|391]]</sup> ; Mostert et al. 2007 <sup>[[#fn:r392|392]]</sup> ; Ziv et al. 2012 <sup>[[#fn:r393|393]]</sup> ; Hurlbert and Gupta 2016 <sup>[[#fn:r394|394]]</sup> ; Poff et al. 2003 <sup>[[#fn:r395|395]]</sup> ; Thomas 1996 <sup>[[#fn:r396|396]]</sup> ; FAO 2015a <sup>[[#fn:r397|397]]</sup> ).

Extension services, and policies supporting agricultural extension systems, are also critical. Smallholder farmer-dominated agriculture is currently the backbone of global food security in the developing world. Without education and incentives to manage land and forest resources in a manner that allows regeneration of both the soils and wood stocks, smallholder farmers tend to generate income through inappropriate land management practices, engage in agricultural production on unsuitable land and use fertile soils, timber and firewood for brick production and construction. Also, they engage in charcoal production (deforestation) as a coping mechanism (increasing income) against food deficiency (Munthali and Murayama 2013 <sup>[[#fn:r398|398]]</sup> ). Through extension services, governments can play a proactive role in providing information on climate and market risks, animal and plant health. Farmers with greater access to extension training retain more crop residues for mulch on their fields (Jaleta et al. 2015 <sup>[[#fn:r1679|1679]]</sup> , 2013 <sup>[[#fn:r1680|1680]]</sup> ; Baudron et al. 2014 <sup>[[#fn:r399|399]]</sup> ).

Food security cannot be achieved by increasing food availability alone. Policy instruments, which increase access to food at the household level, include safety-net programming and universal basic income. The graduation approach, developed and tested over the past decade using randomised control trials in six countries, has lasting positive impacts on income, as well as food and nutrition security (Banerjee et al. 2015 <sup>[[#fn:r400|400]]</sup> ; Raza and Poel 2016 <sup>[[#fn:r401|401]]</sup> ) ( ''robust evidence, high agreement'' ). The graduation approach layers and integrates a series of interventions designed to help the poorest: consumption support in the form of cash or food assistance, transfer of an income- generating asset (such as a livestock) and training on how to maintain the asset, assistance with savings and coaching or mentoring over a period of time to reinforce learning and provide support. Due to its success, the graduation approach is now being scaled up, and is now used in more than 38 countries and included by an increasing number of governments in social safety-net programmes (Hashemi and de Montesquiou 2011 <sup>[[#fn:r402|402]]</sup> ).

At the national and global levels, food prices and trade policies impact on access to food. Fiscal policies, such as taxation, subsidies, or tariffs, can be used to regulate production and consumption of certain foods and can affect environmental outcomes. In Denmark, a tax on saturated fat content of food adopted to encourage healthy eating habits accounted for 0.14% of total tax revenues between 2011 and 2012 (Sassi et al. 2018 <sup>[[#fn:r403|403]]</sup> ). A global tax on GHG emissions, for example, has large mitigation potential and will generate tax revenues, but may also result in large reductions in agricultural production (Henderson 2018 <sup>[[#fn:r404|404]]</sup> ). Consumer-level taxes on GHG- intensive food may be applied to address competitiveness issues between different countries, if some countries use taxes while others do not. However, increases in prices might impose disproportionate financial burdens on low-income households, and may not be publicly acceptable. A study examining the relationship between food prices and social unrest found that, between 1990 and 2011, whereas food price stability has not been associated with increases in social unrest (Bellemare 2015 <sup>[[#fn:r405|405]]</sup> ).

Interventions that allow people to maximise their productive potential while protecting the ES may not ensure food security in all contexts. Some household land holdings are so small that self-sufficiency is not possible (Venton 2018 <sup>[[#fn:r406|406]]</sup> ). Value chain development has, in the past, increased farm income but delivered fewer benefits to vulnerable consumers (Bodnár et al. 2011 <sup>[[#fn:r407|407]]</sup> ). Ultimately, a mix of production activities and consumption support is needed. Consumption support can be used to help achieve the second important element of food security – access to food.

Agricultural technology transfer can help optimise food and nutrition security (Section 7.4.4.3). Policies that affect agricultural innovation span sectors and include ‘macro-economic policy-settings; institutional governance; environmental standards; investment, land, labor and education policies; and incentives for investment, such as a predictable regulatory environment and robust intellectual property rights’.

The scientific community can partner across sectors and industries for better data sharing, integration, and improved modelling and analytical capacities (Janetos et al. 2017 <sup>[[#fn:r408|408]]</sup> ; Lunt et al. 2016 <sup>[[#fn:r409|409]]</sup> ). To better predict, respond to, and prepare for concurrent agricultural failures, and gain a more systematic assessment of exposure to agricultural climate risk, large data gaps need to be filled, as well as gaps in empirical foundation and analytical capabilities (Janetos et al. 2017 <sup>[[#fn:r410|410]]</sup> ; Lunt et al. 2016 <sup>[[#fn:r411|411]]</sup> ). Data required include global historical datasets, many of which are unreliable, inaccessible, or not available (Maynard 2015 <sup>[[#fn:r412|412]]</sup> ; Lunt et al. 2016 <sup>[[#fn:r413|413]]</sup> ). Participation in co-design for scenario planning can build social and human capital while improving understanding of food system risks and creating innovative ways for collectively planning for a more equitable and resilient food system (Himanen et al. 2016 <sup>[[#fn:r414|414]]</sup> ; Meijer et al. 2015 <sup>[[#fn:r415|415]]</sup> ; Van Rijn et al. 2012 <sup>[[#fn:r417|417]]</sup> ). Bangladesh has managed to sustain a rapid reduction in the rate of child undernutrition for at least two decades. Rapid wealth accumulation and large gains in parental education are the two largest drivers of change (Headey et al. 2017 <sup>[[#fn:r418|418]]</sup> ). Educating consumers, and providing affordable alternatives, will be critical to changing unsustainable food-use habits relevant to climate change.

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==== 7.4.2.2 Policies to secure social protection ====

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There is ''medium evidence'' and ''high agreement'' from all regions of the world that safety nets and social protection schemes can provide stability which prevents and reduces abject poverty (Barrientos 2011 <sup>[[#fn:r419|419]]</sup> ; Hossain 2018 <sup>[[#fn:r420|420]]</sup> ; Cook and Pincus 2015 <sup>[[#fn:r421|421]]</sup> ; Huang and Yang 2017 <sup>[[#fn:r422|422]]</sup> ; Slater 2011 <sup>[[#fn:r423|423]]</sup> ; Sparrow et al. 2013 <sup>[[#fn:r424|424]]</sup> ; Rodriguez-Takeuchi and Imai 2013 <sup>[[#fn:r425|425]]</sup> ; Bamberg et al. 2018 <sup>[[#fn:r426|426]]</sup> ) in the face of climatic stressors and land change (Davies et al. 2013 <sup>[[#fn:r427|427]]</sup> ; Cutter et al. 2012b <sup>[[#fn:r428|428]]</sup> ; Pelling 2011 <sup>[[#fn:r429|429]]</sup> ; Ensor 2011 <sup>[[#fn:r430|430]]</sup> ).

The World Bank estimates that, globally, social safety net transfers have reduced the absolute poverty gap by 45% and the relative poverty gap by 16% (World Bank 2018 <sup>[[#fn:r431|431]]</sup> ). Adaptive social protection builds household capacity to deal with shocks as well as the capacity of social safety nets to respond to shocks. For low-income communities reliant on land and climate for their livelihoods and well-being, social protection provides a way for vulnerable groups to manage weather and climatic variability and deteriorating land conditions to household income and assets ( ''robust evidence, high agreement'' ) (Baulch et al. 2006 <sup>[[#fn:r432|432]]</sup> ; Barrientos 2011 <sup>[[#fn:r433|433]]</sup> ; Harris 2013 <sup>[[#fn:r434|434]]</sup> ; Fiszbein et al. 2014 <sup>[[#fn:r435|435]]</sup> ; Kiendrebeogo et al. 2017 <sup>[[#fn:r436|436]]</sup> ; Kabeer et al. 2010 <sup>[[#fn:r437|437]]</sup> ; FAO 2015b <sup>[[#fn:r438|438]]</sup> ; Warner et al. 2018 <sup>[[#fn:r439|439]]</sup> ; World Bank 2018 <sup>[[#fn:r440|440]]</sup> ).

A lifecycle approach to social protection is one approach, which some countries (such as Bangladesh) are using when developing national social protection policies. These policies acknowledge that households face risks across the lifecycle that they need to be protected from. If shocks are persistent, or occur numerous times, then policies can address concerns of a more structural nature (Glauben et al. 2012 <sup>[[#fn:r441|441]]</sup> ). Barrett (2005) <sup>[[#fn:r442|442]]</sup> , for example, distinguishes between the role of safety nets (which include programmes such as emergency feeding programmes, crop or unemployment insurance, disaster assistance, etc.) and cargo nets (which include land reforms, targeted microfinance, targeted school food programmes, etc.). While the former prevents non-poor and transient poor from becoming chronically poor, the latter is meant to lift people out of poverty by changing societal or institutional structures. The graduation approach has adopted such systematic thinking with successful results (Banerjee et al. 2015 <sup>[[#fn:r443|443]]</sup> ).

Social protection systems can provide buffers against shocks through vertical or horizontal expansion, ‘piggybacking’ on pre-established programmes, aligning social protection and humanitarian systems or refocusing existing resources (Wilkinson et al. 2018 <sup>[[#fn:r444|444]]</sup> ; O’Brien et al. 2018 <sup>[[#fn:r445|445]]</sup> ; Jones and Presler-Marshall 2015 <sup>[[#fn:r446|446]]</sup> ). There is increasing evidence that forecast-based financing, linked to a social protection, can be used to enable anticipatory actions based on forecast triggers, and guarantee funding ahead of a shock (Jjemba et al. 2018 <sup>[[#fn:r447|447]]</sup> ). Accordingly, scaling up social protection based on an early warning could enhance timeliness, predictability and adequacy of social protection benefits (Kuriakose et al. 2012 <sup>[[#fn:r448|448]]</sup> ; Costella et al. 2017a <sup>[[#fn:r449|449]]</sup> ; Wilkinson et al. 2018 <sup>[[#fn:r450|450]]</sup> ; O’Brien et al. 2018 <sup>[[#fn:r451|451]]</sup> ).

Countries at high risk of natural disasters often have lower safety-net coverage percent (World Bank 2018 <sup>[[#fn:r452|452]]</sup> ), and there is ''medium evidence'' and ''medium agreement'' that those countries with few financial and other buffers have lower economic and social performance (Cutter et al. 2012b <sup>[[#fn:r453|453]]</sup> ; Outreville 2011a <sup>[[#fn:r454|454]]</sup> ). Social protection systems have also been seen as an unaffordable commitment of public budget in many developing and low-income countries (Harris 2013 <sup>[[#fn:r455|455]]</sup> ). National systems may be disjointed and piecemeal, and subject to cultural acceptance and competing political ideologies (Niño-Zarazúa et al. 2012 <sup>[[#fn:r456|456]]</sup> ). For example, Liberia and Madagascar each have five different public works programmes, each with different donor organisations and different implementing agencies (Monchuk 2014 <sup>[[#fn:r457|457]]</sup> ). These implementation shortcomings mean that positive effects of social protection systems might not be robust enough to shield recipients completely against the impacts of severe shocks or from long-term losses and damages from climate change ( ''limited evidence, high agreement'' ) (Davies et al. 2009 <sup>[[#fn:r458|458]]</sup> ; Umukoro 2013 <sup>[[#fn:r459|459]]</sup> ; Béné et al. 2012 <sup>[[#fn:r460|460]]</sup> ; Ellis et al. 2009 <sup>[[#fn:r461|461]]</sup> ).

There is increasing support for establishment of public-private safety nets to address climate-related shocks, which are augmented by proactive preventative (adaptation) measures and related risk transfer instruments that are affordable to the poor (Kousky et al. 2018b <sup>[[#fn:r462|462]]</sup> ). Studies suggest that the adaptive capacity of communities has improved with regard to climate variability, like drought, when ex-ante tools, including insurance, have been employed holistically; providing insurance in combination with early warning and institutional and policy approaches reduces livelihood and food insecurity as well as strengthens social structures (Shiferaw et al. 2014 <sup>[[#fn:r463|463]]</sup> ; Lotze-Campen and Popp 2012 <sup>[[#fn:r464|464]]</sup> ). Bundling insurance with early warning and seasonal forecasting can reduce the cost of insurance premiums (Daron and Stainforth 2014 <sup>[[#fn:r465|465]]</sup> ). The regional risk insurance scheme, African Risk Capacity, has the potential to significantly reduce the cost of insurance premiums (Siebert 2016 <sup>[[#fn:r466|466]]</sup> ) while bolstering contingency planning against food insecurity.

Work-for-insurance programmes applied in the context of social protection have been shown to improve livelihood and food security in Ethiopia (Berhane 2014 <sup>[[#fn:r467|467]]</sup> ; Mohmmed et al. 2018 <sup>[[#fn:r468|468]]</sup> ) and Pakistan. The R4 Rural Resilience Initiative in Ethiopia is a widely cited example of a programme that serves the most vulnerable and includes aspects of resource management, and access by the poor to financial services, including insurance and savings (Linnerooth-Bayer et al. 2018 <sup>[[#fn:r469|469]]</sup> ). Weather index insurance (such as index-based crop insurance) is being presented to low-income farmers and pastoralists in developing countries (e.g., Ethiopia, India, Kazakhstan, South Asia) to complement informal risk sharing, reducing the risk of lost revenue associated with variations in crop yield, and provide an alternative to classic insurance (Bogale 2015a <sup>[[#fn:r470|470]]</sup> ; Conradt et al. 2015 <sup>[[#fn:r471|471]]</sup> ; Dercon et al. 2014 <sup>[[#fn:r472|472]]</sup> ; Greatrex et al. 2015 <sup>[[#fn:r473|473]]</sup> ; McIntosh et al. 2013 <sup>[[#fn:r474|474]]</sup> ). The ability of insurance to contribute to adaptive capacity depends on the overall risk management and livelihood context of households – studies find that agriculturalists and foresters working on rainfed farms/land with more years of education and credit but limited off-farm income are more willing to pay for insurance than households who have access to remittances (such as from family members who have migrated) (Bogale 2015a <sup>[[#fn:r475|475]]</sup> ; Gan et al. 2014 <sup>[[#fn:r476|476]]</sup> ; Hewitt et al. 2017 <sup>[[#fn:r477|477]]</sup> ; Nischalke 2015 <sup>[[#fn:r478|478]]</sup> ). In Europe, modelling suggests that insurance incentives, such as vouchers, would be less expensive than total incentivised damage reduction and may reduce residential flood risk in Germany by 12% in 2016 and 24% by 2040 (Hudson et al. 2016 <sup>[[#fn:r479|479]]</sup> ).

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=== 7.4.3 Policies responding to climate-related extremes ===

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==== 7.4.3.1 Risk management instruments ====

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Risk management addressing climate change has broadened to include mitigation, adaptation and disaster preparedness in a process using instruments facilitating contingency and cross-sectoral planning (Hurlimann and March 2012 <sup>[[#fn:r481|481]]</sup> ; Oels 2013 <sup>[[#fn:r482|482]]</sup> ), social community planning, and strategic, long-term planning (Serrao-Neumann et al. 2015a <sup>[[#fn:r483|483]]</sup> ). A comprehensive consideration integrates principles from informal support mechanisms to enhance formal social protection programming (Mobarak and Rosenzweig 2013 <sup>[[#fn:r484|484]]</sup> ; Stavropoulou et al. 2017 <sup>[[#fn:r485|485]]</sup> ) such that the social safety net, disaster risk management, and climate change adaptation are all considered to enhance livelihoods of the chronic poor (see char dwellers and recurrent floods in Jamuna and Brahmaputra basins of Bangladesh Awal 2013) (Section 7.4.7). Iterative risk management is an ongoing process of assessment, action, reassessment and response (Mochizuki et al. 2015 <sup>[[#fn:r487|487]]</sup> ) (Sections 7.5.2 and 7.4.7.2).

Important elements of risk planning include education, and creation of hazard and risk maps. Important elements of predicting include hydrological and meteorological monitoring to forecast weather, seasonal climate forecasts, aridity, flood and extreme weather. Effective responding requires robust communication systems that pass on information to enable response (Cools et al. 2016 <sup>[[#fn:r488|488]]</sup> ).

Gauging the effectiveness of policy instruments is challenging. Timescales may influence outcomes. To evaluate effectiveness researchers, programme managers and communities strive to develop consistency, comparability, comprehensiveness and coherence in their tracking. In other words, practitioners utilise a consistent and operational conceptualisation of adaptation; focus on comparable units of analysis; develop comprehensive datasets on adaptation action; and are coherent with an understanding of what constitutes real adaptation (Ford and Berrang-Ford 2016 <sup>[[#fn:r489|489]]</sup> ). Increasing the use of systematic reviews or randomised evaluations may also be helpful (Alverson and Zommers 2018 <sup>[[#fn:r490|490]]</sup> ).

Many risk management policy instruments are referred to by the International Organization of Standardization which lists risk management principles, guidelines, and frameworks for explaining the elements of an effective risk management programme (ISO 2009 <sup>[[#fn:r491|491]]</sup> ). The standard provides practical risk management instruments and makes a business case for risk management investments (McClean et al. 2010 <sup>[[#fn:r492|492]]</sup> ). Insurance addresses impacts associated with extreme weather events (storms, floods, droughts, temperature extremes), but it can provide disincentives for reducing disaster risk at the local level through the transfer of risk spatially to other places or temporally to the future (Cutter et al. 2012b <sup>[[#fn:r493|493]]</sup> ) and uptake is unequally distributed across regions and hazards (Lal et al. 2012 <sup>[[#fn:r494|494]]</sup> ). Insurance instruments (Sections 7.4.2 and 7.4.6) can take many forms (traditional indemnity based, market-based crop insurance, property insurance), and some are linked to livelihoods sensitive to weather as well as food security (linked to social safety-net programmes) and ecosystems (coral reefs and mangroves). Insurance instruments can also provide a framework for risk signals to adaptation planning and implementation and facilitate financial buffering when climate impacts exceed current capabilities delivered through both public and private finance (Bogale 2015b <sup>[[#fn:r495|495]]</sup> ; Greatrex et al. 2015 <sup>[[#fn:r496|496]]</sup> ; Surminski et al. 2016 <sup>[[#fn:r497|497]]</sup> ). A holistic consideration of all instruments responding to extreme impacts of climate change (drought, flood, etc.) is required when assessing if policy instruments are promoting livelihood capitals and contributing to the resilience of people and communities (Hurlbert 2018b <sup>[[#fn:r498|498]]</sup> ). This holistic consideration of policy instruments leads to a consideration of risk governance (Section 7.6).

Early warning systems are critical policy instruments for protecting lives and property, adapting to climate change, and effecting adaptive climate risk management ( ''high confidence'' ) (Selvaraju 2011 <sup>[[#fn:r499|499]]</sup> ; Cools et al. 2016 <sup>[[#fn:r500|500]]</sup> ; Travis 2013 <sup>[[#fn:r501|501]]</sup> ; Henriksen et al. 2018 <sup>[[#fn:r502|502]]</sup> ; Seng 2013 <sup>[[#fn:r503|503]]</sup> ; Kanta Kafle 2017 <sup>[[#fn:r504|504]]</sup> ; Garcia and Fearnley 2012 <sup>[[#fn:r505|505]]</sup> ). Early warning systems exist at different levels and for different purposes, including the Food and Agriculture Organization of the United Nations’ Global Information and Early Warning System on Food and Agriculture (GIEWS), United States Agency for International Development (USAID) Famine Early Warning System Network (FEWS-NET), national and local extreme weather, species extinction, community-based flood and landslide, and informal pastoral drought early warning systems (Kanta Kafle 2017 <sup>[[#fn:r506|506]]</sup> ). Medium-term warning systems can identify areas of concern, hotspots of vulnerabilities and sensitivities, or critical zones of land degradation (areas of concern) (see Chapter 6) critical to reduce risks over five to 10 years (Selvaraju 2012 <sup>[[#fn:r507|507]]</sup> ). Early warning systems for dangerous climate shifts are emerging, with considerations of rate of onset, intensity, spatial distribution and predictability. Growing research in the area is considering positive and negative lessons learned from existing hazard early warning systems, including lead time and warning response (Travis 2013 <sup>[[#fn:r508|508]]</sup> ).

For effectiveness, communication methods are best adapted to local circumstances, religious and cultural-based structures and norms, information technology, and local institutional capacity (Cools et al. 2016 <sup>[[#fn:r509|509]]</sup> ; Seng 2013 <sup>[[#fn:r510|510]]</sup> ). Considerations of governance or the actors and architecture within the socio-ecological system, is an important feature of successful early warning system development (Seng 2013 <sup>[[#fn:r511|511]]</sup> ). Effective early warning systems consider the critical links between hazard monitoring, risk assessment, forecasting tools, warning and dissemination (Garcia and Fearnley 2012 <sup>[[#fn:r512|512]]</sup> ). These effective systems incorporate local context by defining accountability, responsibility, acknowledging the importance of risk perceptions and trust for an effective response to warnings. Although increasing levels and standardisation nationally and globally is important, revising these systems through participatory approaches cognisant of the tension with technocratic approaches improves success (Cools et al. 2016 <sup>[[#fn:r513|513]]</sup> ; Henriksen et al. 2018 <sup>[[#fn:r514|514]]</sup> ; Garcia and Fearnley 2012 <sup>[[#fn:r515|515]]</sup> ).

<div id="section-7-4-3-2-drought-related-risk-minimising-instruments"></div>

<span id="drought-related-risk-minimising-instruments"></span>
==== 7.4.3.2 Drought-related risk minimising instruments ====

<div id="section-7-4-3-2-drought-related-risk-minimising-instruments-block-1"></div>

A more detailed review of drought instruments, and three broad policy approaches for responding to drought, is provided in Cross- Chapter Box 5 in Chapter 3. Three broad approaches include: (i) early warning systems and response to the disaster of drought (through instruments such as disaster assistance or crop insurance); (ii) disaster response ex-ante preparation (through drought preparedness plans); and (iii) drought risk mitigation (proactive polices to improve water-use efficiency, make adjustments to water allocation, funds or loans to build technology such as dugouts or improved soil management practices).

Drought plans are still predominantly reactive crisis management plans rather than proactive risk management and reduction plans. Reactive crisis management plans treat only the symptoms and are inefficient drought management practices. More efficient drought preparedness instruments are those that address the underlying vulnerability associated with the impacts of drought, thereby building agricultural producer adaptive capacity and resilience ( ''high confidence'' ) (Cross-Chapter Box 5 in Chapter 3).

<div id="section-7-4-3-3-fire-related-risk-minimising-instruments"></div>

<span id="fire-related-risk-minimising-instruments"></span>
==== 7.4.3.3 Fire-related risk minimising instruments ====

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There is ''robust evidence'' and ''high agreement'' that fire strategies need to be tailored to site-specific conditions in an adaptive application that is assessed and reassessed over time (Dellasala et al. 2004 <sup>[[#fn:r516|516]]</sup> ; Rocca et al. 2014 <sup>[[#fn:r517|517]]</sup> ). Strategies for fire management include fire suppression, prescribed fire and mechanical treatments (such as thinning the canopy), and allowing wildfire with little or no active management (Rocca et al. 2014 <sup>[[#fn:r518|518]]</sup> ). Fire suppression can degrade the effectiveness of forest fire management in the long run (Collins et al. 2013 <sup>[[#fn:r519|519]]</sup> ).

Different forest types have different fire regimes and require different fire management policies (Dellasala et al. 2004 <sup>[[#fn:r520|520]]</sup> ). For instance, Cerrado, a fire dependent savannah, utilises a different fire management policy and fire suppression policy (Durigan and Ratter 2016 <sup>[[#fn:r521|521]]</sup> ). The choice of strategy depends on local considerations, including land ownership patterns, dynamics of local meteorology, budgets, logistics, federal and local policies, tolerance for risk and landscape contexts. In addition, there are trade-offs among the management alternatives and often no single management strategy will simultaneously optimise ES, including water quality and quantity, carbon sequestration, or run- off erosion prevention (Rocca et al. 2014 <sup>[[#fn:r522|522]]</sup> ).

<div id="section-7-4-3-4-flood-related-risk-minimising-instruments"></div>

<span id="flood-related-risk-minimising-instruments"></span>
==== 7.4.3.4 Flood-related risk minimising instruments ====

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Flood risk management consists of command and control measures, including spatial planning and engineered flood defences (Filatova 2014 <sup>[[#fn:r523|523]]</sup> ), financial incentive instruments issued by regional or national governments to facilitate cooperative approaches through local planning, enhancing community understanding and political support for safe development patterns and building standards, and regulations requiring local government participation and support for local flood planning (Burby and May 2009 <sup>[[#fn:r524|524]]</sup> ). However, Filatova (2014) found that if autonomous adaptation is downplayed, people are more likely to make land-use choices that collectively lead to increased flood risks and leave costs to governments. Taxes and subsidies that do not encourage (and even counter) perverse behaviour (such as rebuilding in flood zones) are important instruments mitigating this cost to government. Flood insurance has been found to be maladaptive as it encourages rebuilding in flood zones (O’Hare et al. 2016 <sup>[[#fn:r525|525]]</sup> ) and government flood disaster assistance negatively impacts on average insurance coverage the following year (Kousky et al. 2018a <sup>[[#fn:r526|526]]</sup> ). Modifications to flood insurance can counter perverse behaviour. One example is the provision of discounts on flood insurance for localities that undertake one of 18 flood mitigation activities, including structural mitigation (constructing dykes, dams, flood control reservoirs), and non-structural initiatives such as point source control and watershed management efforts, education and maintenance of flood-related databases (Zahran et al. 2010 <sup>[[#fn:r527|527]]</sup> ). Flood insurance that provides incentives for flood mitigation, marketable permits and transferable development rights (see Case study: Flood and food security in Section 7.6) instruments can provide price signals to stimulate autonomous adaptation, countering barriers of path dependency, and the time lag between private investment decisions and consequences (Filatova 2014 <sup>[[#fn:r528|528]]</sup> ). To build adaptive capacity, consideration needs to be made of policy instruments responding to flood, including flood zone mapping, land-use planning, flood zone building restrictions, business and crop insurance, disaster assistance payments, preventative instruments, (including environmental farm planning, e.g., soil and water management (see Chapter 6)), farm infrastructure projects, and recovery from debilitating flood losses ultimately through bankruptcy (Hurlbert 2018a <sup>[[#fn:r529|529]]</sup> ). Non-structural measures have been found to advance sustainable development as they are more reversible, commonly acceptable and environmentally friendly (Kundzewicz 2002 <sup>[[#fn:r530|530]]</sup> ).

<span id="policies-responding-to-greenhouse-gas-ghg-fluxes"></span>
=== 7.4.4 Policies responding to greenhouse gas (GHG) fluxes ===

<div id="section-7-4-4-1-ghg-fluxes-and-climate-change-mitigation"></div>

<span id="ghg-fluxes-and-climate-change-mitigation"></span>
==== 7.4.4.1 GHG fluxes and climate change mitigation ====

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Pathways reflecting current nationally stated mitigation ambitions as submitted under the Paris Agreement would not limit global warming to 1.5°C with no or limited overshoot, but instead result in a global warming of about 3°C by 2100 with warming continuing afterward (IPCC 2018d). Reversing warming after an overshoot of 0.2°C or higher during this century would require deployment of CDR at rates and volumes that might not be achievable given considerable implementation challenges (IPCC 2018d). This gap (Höhne et al. 2017 <sup>[[#fn:r531|531]]</sup> ; Rogelj et al. 2016 <sup>[[#fn:r532|532]]</sup> ) creates a significant risk of global warming impacting on land degradation, desertification, and food security (IPCC 2018d <sup>[[#fn:r533|533]]</sup> ) (Section 7.2). Action can be taken by 2030 adopting already known cost-effective technology (United Nations Environment Programme 2017 <sup>[[#fn:r534|534]]</sup> ), improving the finance, capacity building, and technology transfer mechanisms of the United Nations Framework Convention on Climate Change (UNFCCC), improving food security (listed by 73 nations in their nationally determined contributions (NDCs)) and nutritional security (listed by 25 nations) (Richards et al. 2015 <sup>[[#fn:r535|535]]</sup> ). UNFCCC Decision 1. CP21 reaffirmed the UNFCCC target that ‘developed country parties provide USD 100 billion annually by 2020 for climate action in developing countries’ (Rajamani 2011 <sup>[[#fn:r536|536]]</sup> ) and a new collective quantified goal above this floor is to be set, taking into account the needs and priorities of developing countries (Fridahl and Linnér 2016 <sup>[[#fn:r537|537]]</sup> ).

Mitigation policy instruments to address this shortfall include financing mechanisms, carbon pricing, cap and trade or emissions trading, and technology transfer. While climate change is a global commons problem containing free-riding issues cost-effective international policies that ensure that countries get the most environmental benefit out of mitigation investments promote an international climate policy regime (Nordhaus 1999 <sup>[[#fn:r538|538]]</sup> ; Aldy and Stavins 2012 <sup>[[#fn:r539|539]]</sup> ). Carbon pricing instruments may provide an entry point for inclusion of appropriate agricultural carbon instruments. Models of cost-efficient distribution of mitigation across regions and sectors typically employ a global uniform carbon price, but such treatment in the agricultural sector may impact on food security (Section 7.4.4.4).

One policy initiative to advance climate mitigation policy coherence in this section is the phase out of subsidies for fossil fuel production (see also Section 7.4.8). The G20 agreed in 2009, and the G7 agreed in 2016, to phase out these subsidies by 2025. Subsidies include lower tax rates or exemptions and rebates of taxes on fuels used by particular consumers (diesel fuel used by farming, fishing, etc.), types of fuel, or how fuels are used. The OECD estimates the overall value of these subsides to be 160–200 billion USD annually between 2010 and 2014 (OECD 2015 <sup>[[#fn:r540|540]]</sup> ). The phase-out of fossil fuel subsidies has important economic, environmental and social benefits. Coady et al. (2017) <sup>[[#fn:r541|541]]</sup> estimate the economic and environmental benefits of reforming fossil fuel subsidies could be valued worldwide at 4.9 trillion USD in 2013, and 5.3 trillion USD in 2015. Eliminating subsidies could have reduced emissions by 21%, raised 4% of global GDP as revenue (in 2013), and improved social welfare (Coady et al. 2017 <sup>[[#fn:r542|542]]</sup> ).

Legal instruments addressing perceived deficiencies in climate change mitigation include human rights and liability. Developments in attribution science are improving the ability to detect human influence on extreme weather. Marjanac et al. (2017) <sup>[[#fn:r543|543]]</sup> argue that this broadens the legal duty of government, business and others to manage foreseeable harms, and may lead to more climate change litigation (Marjanac et al. 2017) <sup>[[#fn:r544|544]]</sup> . Peel and Osofsky (2017) <sup>[[#fn:r545|545]]</sup> argue that courts are becoming increasingly receptive to employ human rights claims in climate change lawsuits (Peel and Osofsky 2017 <sup>[[#fn:r546|546]]</sup> ); citizen suits in domestic courts are not a universal phenomenon and, even if unsuccessful, Estrin (2016) <sup>[[#fn:r547|547]]</sup> concludes they are important in underlining the high level of public concern.

<div id="section-7-4-4-2-mitigation-instruments"></div>

<span id="mitigation-instruments"></span>
==== 7.4.4.2 Mitigation instruments ====

<div id="section-7-4-4-2-mitigation-instruments-block-1"></div>

Similar instruments for mitigation could be applied to the land sector as in other sectors, including: market-based measures such as taxes and cap and trade systems; standards and regulations; subsidies and tax credits; information instruments and management tools; R&amp;D investment; and voluntary compliance programmes. However, few regions have implemented agricultural mitigation instruments Cooper et al. 2013 <sup>[[#fn:r548|548]]</sup> ). Existing regimes focus on subsidies, grants and incentives, and voluntary offset programmes.

<div id="section-7-4-4-3-market-based-instruments"></div>

<span id="market-based-instruments"></span>
==== 7.4.4.3 Market-based instruments ====

<div id="section-7-4-4-3-market-based-instruments-block-1"></div>

Although carbon pricing is recognised to be an important cost- effective instrument in a portfolio of climate policies ( ''high evidence, high agreement'' ) (Aldy et al. 2010 <sup>[[#fn:r549|549]]</sup> ), as yet, no country is exposing their agricultural sector emissions to carbon pricing in any comprehensive way. A carbon tax, fuel tax, and carbon markets (cap and trade system or Emissions Trading System (ETS), or baseline and credit schemes, and voluntary markets) are predominant policy instruments that implement carbon pricing. The advantage of carbon pricing is environmental effectiveness at relatively low cost ( ''high evidence, high agreement'' ) (Baranzini et al. 2017 <sup>[[#fn:r550|550]]</sup> ; Fawcett et al. 2014 <sup>[[#fn:r551|551]]</sup> ). Furthermore, carbon pricing could be used to raise revenue to reinvest in public spending, either to help certain sectors transition to lower carbon systems, or to invest in public spending unrelated to climate change. Both of these options may make climate policies more attractive and enhance overall welfare (Siegmeier et al. 2018 <sup>[[#fn:r552|552]]</sup> ), but there is, as yet, no evidence of the effectiveness of emissions pricing in agriculture (Grosjean et al. 2018 <sup>[[#fn:r553|553]]</sup> ). There is, however, a clear need for progress in this area as, without effective carbon pricing, the mitigation potential identified in chapters 5 and 6 of this report will not be realised ( ''high evidence, high agreement'' ) (Boyce 2018 <sup>[[#fn:r554|554]]</sup> ).

The price may be set at the social cost of carbon (the incremental impact of emitting an additional tonne of CO <sub>2</sub> , or the benefit of slightly reducing emissions), but estimates of the SCC vary widely and are contested ( ''high evidence, high agreement'' ) (Pezzey 2019 <sup>[[#fn:r555|555]]</sup> ). An alternative to the SCC includes a pathways approach that sets an emissions target and estimates the carbon prices required to achieve this at the lowest possible cost (Pezzey 2019 <sup>[[#fn:r556|556]]</sup> ). Theoretically, higher costs throughout the entire economy result in reduction of carbon intensity, as consumers and producers adjust their decisions in relation to prices corrected to reflect the climate externality (Baranzini et al. 2017 <sup>[[#fn:r557|557]]</sup> ).

Both carbon taxes and cap and trade systems can reduce emissions, but cap and trade systems are generally more cost effective ( ''medium evidence, high agreement'' ) (Haites 2018a <sup>[[#fn:r558|558]]</sup> ). In both cases, the design of the system is critical to its effectiveness at reducing emissions ( ''high evidence, high agreement'' ) (Bruvoll and Larsen 2004 <sup>[[#fn:r559|559]]</sup> ; (Lin and Li 2011 <sup>[[#fn:r560|560]]</sup> ). The trading system allows the achievement of emission reductions in the most cost-effective manner possible and results in a market and price on emissions that create incentives for the reduction of carbon pollution. The way allowances are allocated in a cap and trade system is critical to its effectiveness and equity. Free allocations can be provided to trade-exposed sectors, such as agriculture, either through historic or output-based allocations, the choice of which has important implications (Quirion 2009 <sup>[[#fn:r561|561]]</sup> ). Output-based allocations may be most suitable for agriculture, also minimising leakage risk (see below in this section) (Grosjean et al. 2018 <sup>[[#fn:r562|562]]</sup> ; Quirion 2009 <sup>[[#fn:r563|563]]</sup> ). There is ''medium evidence'' and ''high agreement'' that properly designed, a cap and trade system can be a powerful policy instrument (Wagner 2013 <sup>[[#fn:r564|564]]</sup> ) and may collect more rents than a variable carbon tax (Siegmeier et al. 2018 <sup>[[#fn:r565|565]]</sup> ; Schmalensee and Stavins 2017 <sup>[[#fn:r566|566]]</sup> ).

In the land sector, carbon markets are challenging to implement. Although several countries and regions have an ETS in place (for example, the EU, Switzerland, the Republic of Korea, Quebec in Canada, California in the USA (Narassimhan et al. 2018 <sup>[[#fn:r567|567]]</sup> )), none have included non-CO <sub>2</sub> (methane and nitrous oxide) emissions from agriculture. New Zealand is the only country currently considering ways to incorporate agriculture into its ETS (see Case study: Including agriculture in the New Zealand Emissions Trading Scheme).

Three main reasons explain the lack of implementation to date:

# The large number of heterogeneous buyers and sellers, combined with the difficulties of monitoring, reporting and verification (MRV) of emissions from biological systems introduce potentially high levels of complexity (and transaction costs). Effective policies therefore depend on advanced MRV systems which are lacking in many (particularly developing) countries (Wilkes et al. 2017) <sup>[[#fn:r568|568]]</sup> . This is discussed in more detail in the case study on the New Zealand Emissions Trading Scheme.
# Adverse distributional consequences (Grosjean et al. 2018 <sup>[[#fn:r569|569]]</sup> ) ( ''medium evidence, high agreement'' ). Distributional issues depend, in part, on the extent that policy costs can be passed on to consumers, and there is ''medium evidence'' and ''medium agreement'' that social equity can be increased through a combination of non-market and market-based instruments (Haites 2018b <sup>[[#fn:r570|570]]</sup> ).
# Regulation, market-based or otherwise, adopted in only one jurisdiction and not elsewhere may result in ‘leakage’ or reduced effectiveness – where production relocates to weaker regulated regions, potentially reducing the overall environmental benefit. Although modelling studies indicate the possibility of leakage following unilateral agricultural mitigation policy implementation (e.g., Fellmann et al. 2018), there is no empirical evidence from the agricultural sector yet available. Analysis from other sectors shows an overestimation of the extent of carbon leakage in modelling studies conducted before policy implementation compared to evidence after the policy was implemented (Branger and Quirion 2014 <sup>[[#fn:r571|571]]</sup> ). Options to avoid leakage include: border adjustments (emissions in non-regulated imports are taxed at the border, and payments made on products exported to non-regulated countries are rebated); differential pricing for trade-exposed products; and output-based allocation (which effectively works as a subsidy for trade-exposed products). Modelling shows that border adjustments are the most effective at reducing leakage, but may exacerbate regional inequality (Böhringer et al. 2012 <sup>[[#fn:r572|572]]</sup> ) and through their trade-distorting nature may contravene World Trade Organization rules. The opportunity for leakage would be significantly reduced, ideally through multi- lateral commitments (Fellmann et al. 2018 <sup>[[#fn:r573|573]]</sup> ) ( ''medium evidence, high agreement'' ) but could also be reduced through regional or bi-lateral commitments within trade agreements.

'''Case study | Including agriculture in the New Zealand Emissions Trading Scheme (ETS)'''

New Zealand has a high proportion of agricultural emissions at 49% (Ministry of the Environment 2018) – the next-highest developed country agricultural emitter is Ireland at around 32% (EPA 2018 <sup>[[#fn:r1656|1656]]</sup> ) – and is considering incorporating agricultural non-CO <sub>2</sub> gases into the existing national ETS. In the original design of the ETS in 2008, agriculture was intended to be included from 2013, but successive governments deferred the inclusion (Kerr and Sweet 2008 <sup>[[#fn:r1657|1657]]</sup> ) due to concerns about competitiveness, lack of mitigation options and the level of opposition from those potentially affected (Cooper and Rosin 2014 <sup>[[#fn:r1658|1658]]</sup> ). Now though, as the country’s agricultural emissions are 12% above 1990 levels, and the country’s total gross emissions have increased 19.6% above 1990 levels (New Zealand Ministry for the Environment 2018 <sup>[[#fn:r1659|1659]]</sup> ), there is a recognition that, without any targeted policy for agriculture, only 52% of the country’s emissions face any substantive incentive to mitigate (Narassimhan et al. 2018 <sup>[[#fn:r1660|1660]]</sup> ). Including agriculture in the ETS is one option to provide incentives for emissions reductions in that sector. Other options are discussed in Section 7.4.4. Although some producer groups raise concern that including agriculture will place New Zealand producers at a disadvantage compared with their international competitors who do not face similar mechanisms (New Zealand Productivity Commission 2018 <sup>[[#fn:r1661|1661]]</sup> ), there is generally greater acceptance of the need for climate policies for agriculture.

The inclusion of non-CO <sub>2</sub> emissions from agriculture within an ETS is potentially complex, however, due to the large number of buyers and sellers if obligations are placed at farm level, and different choices of how to estimate emissions from biological systems in cost- effective ways. New Zealand is currently investigating practical and equitable approaches to include agriculture through advice being provided by the Interim Climate Change Committee (ICCC 2018 <sup>[[#fn:r1662|1662]]</sup> ). Main questions centre around the point of obligation for buying and selling credits, where trade-offs have to be made between providing incentives for behaviour change at farm level and the cost and complexity of administering the scheme (Agriculture Technical Advisory Group 2009 <sup>[[#fn:r1663|1663]]</sup> ; Kerr and Sweet 2008 <sup>[[#fn:r1664|1664]]</sup> ). The two potential points of obligation are at the processor level or at the individual farm level. Setting the point of obligation at the processor level means that farmers would face limited incentive to change their management practices, unless the processors themselves rewarded farmers for lowered emissions. Setting it at the individual farm level would provide a direct incentive for farmers to adopt mitigation practices, however, the reality of having thousands of individual points of obligation would be administratively complex and could result in high transaction costs (Beca Ltd 2018 <sup>[[#fn:r1665|1665]]</sup> ).

Monitoring, reporting and verification (MRV) of agricultural emissions presents another challenge, especially if emissions have to be estimated at farm level. Again, trade-offs have to be made between accuracy and detail of estimation method and the complexity, cost and audit of verification (Agriculture Technical Advisory Group 2009 <sup>[[#fn:r1666|1666]]</sup> ).

The ICCC is also exploring alternatives to an ETS to provide efficient abatement incentives (ICCC 2018 <sup>[[#fn:r1667|1667]]</sup> ).

Some discussion in New Zealand also focuses on a differential treatment of methane compared to nitrous oxide. Methane is a short- lived gas with a perturbation lifetime of 12 years in the atmosphere; nitrous oxide on the other hand is a long-lived gas and remains in the atmosphere for 114 years (Allen et al. 2016 <sup>[[#fn:r1668|1668]]</sup> ). Long-lived gases have a cumulative and essentially irreversible effect on the climate (IPCC 2014b <sup>[[#fn:r1669|1669]]</sup> ) so their emissions need to reduce to net-zero in order to avoid climate change. Short-lived gases, however, could potentially be reduced to a certain level and then stabilised, and would not contribute further to warming, leading to suggestions of treating these two gases separately in the ETS or alternative policy instruments, possibly setting different budgets and targets for each (New Zealand Productivity Commission 2018 <sup>[[#fn:r1670|1670]]</sup> ). Reisinger et al. (2013) <sup>[[#fn:r1671|1671]]</sup> demonstrate that different metrics can have important implications globally and potentially at national and regional scales on the costs and levels of abatement.

While the details are still being agreed on in New Zealand, almost 80% of nationally determined contributions committed to action on mitigation in agriculture (FAO 2016 <sup>[[#fn:r1672|1672]]</sup> ), so countries will be looking for successful examples.

Australia’s Emissions Reduction Fund, and the preceding Carbon Farming Initiative, are examples of baseline-and-credit schemes, which creates credits for activities that generate emissions below a baseline – effectively a subsidy (Freebairn 2016 <sup>[[#fn:r1673|1673]]</sup> ). It is a voluntary scheme, and has the potential to create real and additional emission reductions through projects reducing emissions and sequestering carbon (Verschuuren 2017 <sup>[[#fn:r1674|1674]]</sup> ) ( ''low evidence, low agreement'' ). Key success factors in the design of such an instrument are policy-certainty for at least 10 to 20years, regulation that focuses on projects and not uniform rules, automated systems for all phases of the projects, and a wider focus of the carbon farming initiative on adaptation, food security, sustainable farm business, and creating jobs (Verschuuren 2017 <sup>[[#fn:r1675|1675]]</sup> ). A recent review highlighted the issue of permanence and reversal, and recommended that projects detail how they will maintain carbon in their projects, and deal with the risk of fire.

<div id="section-7-4-4-4-technology-transfer-and-land-use-sectors"></div>

<span id="technology-transfer-and-land-use-sectors"></span>
==== 7.4.4.4 Technology transfer and land-use sectors ====

<div id="section-7-4-4-4-technology-transfer-and-land-use-sectors-block-1"></div>

Technology transfer has been part of the UNFCCC process since its inception and is a key element of international climate mitigation and adaptation efforts under the Paris Agreement. The IPCC definition of ‘technology transfer’ includes transfer of knowledge and technological cooperation (see Glossary) and can include modifications to suit local conditions and/or integration with indigenous technologies (Metz et al. 2000 <sup>[[#fn:r1676|1676]]</sup> ). This definition suggests greater heterogeneity in the applications for climate mitigation and adaptation, especially in land-use sectors where indigenous knowledge may be important for long-term climate resilience (Nyong et al. 2007 <sup>[[#fn:r574|574]]</sup> ). For land-use sectors, the typical reliance on trade and patent data for empirical analyses is generally not feasible as the ‘technology’ in question is often related to resource management and is neither patentable nor tradable (Glachant and Dechezleprêtre 2017 <sup>[[#fn:r575|575]]</sup> ) and ill-suited to provide socially beneficially innovation for poorer farmers in developing countries (Lybbert and Sumner 2012 <sup>[[#fn:r576|576]]</sup> ; Baker et al. 2017 <sup>[[#fn:r577|577]]</sup> ).

Technology transfer has contributed to emissions reductions ( ''medium confidence'' ). A detailed study for nearly 4000 Clean Development Mechanism (CDM) projects showed that 39% of projects had a stated and actual technology transfer component, accounting for 59% of emissions reductions; however, the more land-intensive projects (e.g., afforestation, bioenergy) showed lower percentages (Murphy et al. 2015 <sup>[[#fn:r578|578]]</sup> ). Bioenergy projects that rely on agricultural residues offer substantially more development benefits than those based on industrial residues from forests (Lee and Lazarus 2013 <sup>[[#fn:r579|579]]</sup> ). Energy projects tended to have a greater degree of technology transfer under the CDM compared to non-energy projects (Gandenberger et al. 2016 <sup>[[#fn:r580|580]]</sup> ). However, longer-term cooperation and collaborative R&amp;D approaches to technology transfer will be more important in land-use sectors (compared to energy or industry) due to the time needed for improved resource management and interaction between researchers, practitioners and policymakers. These approaches offer longer-term technology transfer that is more difficult to measure compared to specific cooperation projects; empirical research on the effects of R&amp;D collaboration could help to avoid the ‘one-policy-fits- all’ approach (Ockwell et al. 2015 <sup>[[#fn:r581|581]]</sup> ).

There is increasing recognition of the role of technology transfer in climate adaptation, but in the land-use sector there are inherent adoption challenges specific to adaptation, due to uncertainties arising from changing climatic conditions, agricultural prices, and suitability under future conditions (Biagini et al. 2014 <sup>[[#fn:r582|582]]</sup> ). Engaging the private sector is important, as adoption of new technologies can only be replicated with significant private sector involvement (Biagini and Miller 2013 <sup>[[#fn:r583|583]]</sup> ).

<div id="section-7-4-4-5-international-cooperation-under-the-paris-agreement"></div>

<span id="international-cooperation-under-the-paris-agreement"></span>
==== 7.4.4.5 International cooperation under the Paris Agreement ====

<div id="section-7-4-4-5-international-cooperation-under-the-paris-agreement-block-1"></div>

New cooperative mechanisms under the Paris Agreement illustrate the shift away from the Kyoto Protocol’s emphasis on obligations of developed country Parties to pursue investments and technology transfer, to a more pragmatic, decentralised and collaborative approach (Savaresi 2016 <sup>[[#fn:r584|584]]</sup> ; Jiang et al. 2017 <sup>[[#fn:r585|585]]</sup> ). These approaches can effectively include any combination of measures or instruments related to adaptation, mitigation, finance, technology transfer and capacity building, which could be of particular interest in land-use sectors where such aspects are more intertwined than in energy or industry sectors. Article 6 sets out several options for international cooperation (Gupta and Dube 2018 <sup>[[#fn:r586|586]]</sup> ).

The close relationship between emission reductions, adaptive capacity, food security and other sustainability and governance objectives in the land sectors means that Article 6 could bring co-benefits that increase its attractiveness and the availability of finance, while also bringing risks that need to be monitored and mitigated against, such as uncertainties in measurements and the risk of non-permanence (Thamo and Pannell 2016 <sup>[[#fn:r587|587]]</sup> ; Olsson et al. 2016 <sup>[[#fn:r588|588]]</sup> ; Schwartz et al. 2017 <sup>[[#fn:r589|589]]</sup> ). There has been progress in accounting for land-based emissions, mainly forestry and agriculture ( ''medium evidence, low agreement'' ), but various challenges remain (Macintosh 2012 <sup>[[#fn:r590|590]]</sup> ; Pistorius et al. 2017 <sup>[[#fn:r591|591]]</sup> ; Krug 2018 <sup>[[#fn:r592|592]]</sup> ).

Like the CDM and other existing carbon trading mechanisms, participation in Article 6.2 and 6.4 of the Paris Agreement requires certain institutional and data management capacities in the land sector to effectively benefit from the cooperation opportunities (Totin et al. 2018 <sup>[[#fn:r593|593]]</sup> ). While the rules for the implementation of the new mechanisms are still under development, lessons from REDD+ (reducing emissions from deforestation and forest degradation) may be useful, which is perceived as more democratic and participative than the CDM (Maraseni and Cadman 2015 <sup>[[#fn:r594|594]]</sup> ). Experience with REDD+ programmes emphasise the necessity to invest in ‘readiness’ programmes that assist countries to engage in strategic planning and build management and data collection systems to develop the capacity and infrastructure to participate in REDD+ (Minang et al. 2014 <sup>[[#fn:r595|595]]</sup> ). The overwhelming majority of countries (93%) cite weak forest sector governance and institutions in their applications for REDD+ readiness funding (Kissinger et al. 2012 <sup>[[#fn:r596|596]]</sup> ). Technology transfer for advanced remote sensing technologies that help to reduce uncertainty in monitoring forests helps to achieve REDD+ ‘readiness’ (Goetz et al. 2015 <sup>[[#fn:r597|597]]</sup> ).

As well as new opportunities for finance and support, the Paris cooperation mechanisms and the associated roles for technology transfer bring new challenges, particularly in reporting, verifying and accounting in land-use sectors. Since developing countries must now achieve, measure and communicate emission reductions, they now have value for both developing and developed countries in achieving their NDCs, but reductions cannot be double-counted (i.e., towards multiple NDCs). All countries have to prepare and communicate NDCs, and many countries have included in their NDCs either economy-wide targets that include the land-use sectors, or specific targets for the land-use sectors. The Katowice climate package clarifies that all Parties have to submit ‘Biennial Transparency Reports’ from 2024 onwards, using common reporting formats, following most recent IPCC Guidelines (use of the 2013 Supplement on Wetlands is encouraged), identifying key categories of emissions, ensuring time-series consistency, and providing completeness and uncertainty assessments as well as quality control (UNFCCC 2018a <sup>[[#fn:r598|598]]</sup> ; Schneider and La Hoz Theuer 2019 <sup>[[#fn:r599|599]]</sup> ). In total, the ambiguity in how countries incorporate land-use sectors into their NDC is estimated to lead to an uncertainty of more than 2 GtCO <sub>2</sub> in 2030 (Fyson and Jeffery 2018 <sup>[[#fn:r600|600]]</sup> ). Uncertainty is lower if the analysis is limited to countries that have provided separate land-use sector targets in their NDCs (Benveniste et al. 2018 <sup>[[#fn:r601|601]]</sup> ).

<span id="policies-responding-to-desertification-and-degradation-land-degradation-neutrality-ldn"></span>
=== 7.4.5 Policies responding to desertification and degradation – Land Degradation Neutrality (LDN) ===

<div id="section-7-4-5-policies-responding-to-desertification-and-degradation-land-degradation-neutrality-ldn-block-1"></div>

Land Degradation Neutrality (LDN) (SDG Target 15.3), evolved from the concept of Net Zero Land Degradation, which was introduced by the United Nations Convention to Combat Desertification (UNCCD) to promote SLM (Kust et al. 2017 <sup>[[#fn:r602|602]]</sup> ; Stavi and Lal 2015 <sup>[[#fn:r603|603]]</sup> ; Chasek et al. 2015 <sup>[[#fn:r604|604]]</sup> ). Neutrality here implies no net loss of the land-based natural resource and ES relative to a baseline or a reference state (UNCCD 2015 <sup>[[#fn:r605|605]]</sup> ; Kust et al. 2017 <sup>[[#fn:r606|606]]</sup> ; Easdale 2016 <sup>[[#fn:r607|607]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r608|608]]</sup> ; Stavi and Lal 2015 <sup>[[#fn:r609|609]]</sup> ; Grainger 2015 <sup>[[#fn:r610|610]]</sup> ; Chasek et al. 2015 <sup>[[#fn:r611|611]]</sup> ). LDN can be achieved by reducing the rate of land degradation (and concomitant loss of ES) and increasing the rate of restoration and rehabilitation of degraded or desertified land. Therefore, the rate of global land degradation is not to exceed that of land restoration in order to achieve LDN goals (adopted as national platform for actions by more than 100 countries) (Stavi and Lal 2015 <sup>[[#fn:r612|612]]</sup> ; Grainger 2015 <sup>[[#fn:r613|613]]</sup> ; Chasek et al. 2015 <sup>[[#fn:r614|614]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r615|615]]</sup> ; Montanarella 2015 <sup>[[#fn:r616|616]]</sup> ). Achieving LDN would decrease the environmental footprint of agriculture, while supporting food security and sustaining human well-being (UNCCD 2015 <sup>[[#fn:r617|617]]</sup> ; Safriel 2017 <sup>[[#fn:r618|618]]</sup> ; Stavi and Lal 2015 <sup>[[#fn:r619|619]]</sup> ; Kust et al. 2017 <sup>[[#fn:r620|620]]</sup> ).

Response hierarchy – avoiding, reducing and reversing land degradation – is the main policy response (Chasek et al. 2019 <sup>[[#fn:r621|621]]</sup> , Wonder and Bodle 2019 <sup>[[#fn:r622|622]]</sup> , Cowie et al. 2018 <sup>[[#fn:r623|623]]</sup> , Orr et al. 2017 <sup>[[#fn:r624|624]]</sup> ). The LDN response hierarchy encourages through regulation, planning and management instruments, the adoption of diverse measures to avoid, reduce and reverse land degradation in order to achieve LDN (Cowie et al. 2018b <sup>[[#fn:r625|625]]</sup> ; Orr et al. 2017 <sup>[[#fn:r626|626]]</sup> ).

Chapter 3 categorised policy responses into two categories; (i) avoiding, reducing and reversing it through SLM; and (ii) providing alternative livelihoods with economic diversification. LDN could be achieved through planned effective actions, particularly by motivated stakeholders – those who play an essential role in a land-based climate change adaptation (Easdale 2016 <sup>[[#fn:r627|627]]</sup> ; Qasim et al. 2011 <sup>[[#fn:r628|628]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r629|629]]</sup> ; Salvati and Carlucci 2014 <sup>[[#fn:r630|630]]</sup> ). Human activities impacting the sustainability of drylands is a key consideration in adequately reversing degradation through restoration or rehabilitation of degraded land (Easdale 2016 <sup>[[#fn:r631|631]]</sup> ; Qasim et al. 2011 <sup>[[#fn:r632|632]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r633|633]]</sup> ; Salvati and Carlucci 2014 <sup>[[#fn:r634|634]]</sup> ).

LDN actions and activities play an essential role for a land-based approach to climate change adaptation (UNCCD 2015 <sup>[[#fn:r635|635]]</sup> ). Policies responding to degradation and desertification include improving market access, gender empowerment, expanding access to rural advisory services, strengthening land tenure security, payments for ES, decentralised natural resource management, investing in R&amp;D, modern renewable energy sources and monitoring of desertification and desert storms, developing modern renewable energy sources, and developing and strengthening climate services. Policy supporting economic diversification includes investing in irrigation, expanding agricultural commercialisation, and facilitating structural transformations in rural economies (Chapter 3). Policies and actions also include promoting indigenous and local knowledge (ILK), soil conservation, agroforestry, crop-livestock interactions as an approach to manage land degradation, and forest-based activities such as afforestation, reforestation, and changing forest management (Chapter 4). Measures identified for achievement of LDN include effective financial mechanisms (for implementation of land restoration measures and the long-term monitoring of progress), parameters for assessing land degradation, detailed plans with quantified objectives and timelines (Kust et al. 2017 <sup>[[#fn:r636|636]]</sup> ; Sietz et al. 2017 <sup>[[#fn:r637|637]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r638|638]]</sup> ; Montanarella 2015 <sup>[[#fn:r639|639]]</sup> ; Stavi and Lal 2015 <sup>[[#fn:r640|640]]</sup> ).

Implementing the international LDN target into national policies has been a challenge (Cowie et al. 2018a <sup>[[#fn:r641|641]]</sup> ; Grainger 2015 <sup>[[#fn:r642|642]]</sup> ) as baseline land degradation or desertification information is not always available (Grainger 2015) and challenges exist in monitoring LDN as it is a dynamic process (Sietz et al. 2017 <sup>[[#fn:r643|643]]</sup> ; Grainger 2015 <sup>[[#fn:r644|644]]</sup> ; Cowie et al. 2018a <sup>[[#fn:r645|645]]</sup> ). Wunder and Bodle (2019) <sup>[[#fn:r646|646]]</sup> propose that LDN be implemented and monitored through indicators at the national level. Effective implementation of global LDN will be supported by integrating lessons learned from existing programmes designed for other environmental objectives and closely coordinate LDN activities with actions for climate change adaptation and mitigation at both global and national levels ( ''high confidence'' ) (Stavi and Lal 2015 <sup>[[#fn:r647|647]]</sup> ; Grainger 2015 <sup>[[#fn:r648|648]]</sup> ).

<div id="section-7-4-5-policies-responding-to-desertification-and-degradation-land-degradation-neutrality-ldn-block-2"></div>

<span id="figure-7.4"></span>
<!-- START IMG -->
<!-- IMG TITLE -->
'''Figure 7.4'''

<span id="ldn-response-hierarchy.-source-adapted-from-liniger-et-al.-2019-unccdscience-policy-interface-2016."></span>
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'''LDN response hierarchy. Source: Adapted from (Liniger et al. 2019; UNCCD/Science-Policy-Interface 2016).'''
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[[File:6d15629434bb29edbb22c55081588f25 Figure-7-4.jpg]]

LDN response hierarchy. Source: Adapted from (Liniger et al. 2019; UNCCD/Science-Policy-Interface 2016).

<!-- END IMG -->
<span id="policies-responding-to-land-degradation"></span>
=== 7.4.6 Policies responding to land degradation ===

<div id="section-7-4-6-1-land-use-zoning"></div>

<span id="land-use-zoning"></span>
==== 7.4.6.1 Land-use zoning ====

<div id="section-7-4-6-1-land-use-zoning-block-1"></div>

Land-use zoning divides a territory (including local, sub-regional or national) into zones with different rules and regulations for land use (mining, agriculture, urban development, etc.), management practices and land-cover change (Metternicht 2018 <sup>[[#fn:r649|649]]</sup> ). While the policy instrument is zoning ordinances, the process of determining these regulations is covered in integrated land-use planning (Section 7.6.2). Urban zoning can guide new growth in urban communities outside forecasted hazard areas, assist relocating existing dwellings to safer sites and manage post-event redevelopment in ways to reduce future vulnerability (Berke and Stevens 2016 <sup>[[#fn:r650|650]]</sup> ). Holistic integration of climate mitigation and adaptation are interdependent and can be implemented by restoring urban forests, and improving parks (Brown 2010 <sup>[[#fn:r651|651]]</sup> ; Berke and Stevens 2016 <sup>[[#fn:r652|652]]</sup> ). Zoning ordinances can contribute to SLM through protection of natural capital by preventing or limiting vegetation clearing, avoiding degradation of planning for rehabilitation of degraded land or contaminated sites, promoting conservation and enhancement of ecosystems and ecological corridors (Metternicht 2018 <sup>[[#fn:r653|653]]</sup> ; Jepson and Haines 2014 <sup>[[#fn:r654|654]]</sup> ). Zoning ordinances can also encourage higher density development, mixed use, local food production, encourage transportation alternatives (bike paths and transit-oriented development), preserve a sense of place, and increase housing diversity and affordability (Jepson and Haines 2014 <sup>[[#fn:r655|655]]</sup> ). Conservation planning varies by context and may include one or several adaptation approaches, including protecting current patterns of biodiversity, large intact natural landscapes, and geophysical settings. Conservation planning may also maintain and restore ecological connectivity, identify and manage areas that provide future climate space for species expected to be displaced by climate change, and identify and protect climate refugia (Stevanovic et al. 2016 <sup>[[#fn:r656|656]]</sup> ; Schmitz et al. 2015 <sup>[[#fn:r657|657]]</sup> ).

Anguelovski et al. (2016) <sup>[[#fn:r658|658]]</sup> studied land-use interventions in eight cities in the global north and south, and concluded that historic trends of socio-economic vulnerability can be reinforced. They also found that vulnerability could be avoided with a consideration of the distribution of adaptation benefits and prioritising beneficial outcomes for disadvantaged and vulnerable groups when making future adaptation plans. Concentration of adaptation resources within wealthy business districts creating ecological enclaves exacerbated climate risks elsewhere and building of climate adaptive infrastructure such as sea walls or temporary flood barriers occurred at the expense of underserved neighbourhoods (Anguelovski et al. 2016a <sup>[[#fn:r659|659]]</sup> ).

<div id="section-7-4-6-2-conserving-biodiversity-and-ecosystem-services-es"></div>

<span id="conserving-biodiversity-and-ecosystem-services-es"></span>
==== 7.4.6.2 Conserving biodiversity and ecosystem services (ES) ====

<div id="section-7-4-6-2-conserving-biodiversity-and-ecosystem-services-es-block-1"></div>

There is ''limited evidence'' but ''high agreement'' that ecosystem-based adaptation (biodiversity, ecosystem services (ES), and Nature’s Contribution to People (see Chapter 6)) and incentives for ES – including payment for ecosystem services (PES) – play a critical part of an overall strategy to help people adapt to the adverse effects of climate change on land (UNEP 2009 <sup>[[#fn:r661|661]]</sup> ; Bonan 2008 <sup>[[#fn:r662|662]]</sup> ; Millar et al. 2007 <sup>[[#fn:r663|663]]</sup> ; Thompson et al. 2009 <sup>[[#fn:r664|664]]</sup> ).

Ecosystem-based adaptation can promote socio-ecological resilience by enabling people to adapt to the impacts of climate change on land and reduce their vulnerability (Ojea 2015 <sup>[[#fn:r665|665]]</sup> ). Ecosystem-based adaptation can promote nature conservation while alleviating poverty and even provide co-benefits by removing GHGs (Scarano 2017 <sup>[[#fn:r666|666]]</sup> ) and protecting livelihoods (Munang et al. 2013 <sup>[[#fn:r667|667]]</sup> ). For example, mangroves provide diverse ES such as carbon storage, fisheries, non-timber forest products, erosion protection, water purification, shore-line stabilisation, and also regulate storm surge and flooding damages, thus enhancing resilience and reducing climate risk from extreme events such as cyclones (Rahman et al. 2014 <sup>[[#fn:r668|668]]</sup> ; Donato et al. 2011 <sup>[[#fn:r669|669]]</sup> ; Das and Vincent 2009 <sup>[[#fn:r670|670]]</sup> ; Ghosh et al. 2015 <sup>[[#fn:r671|671]]</sup> ; Ewel et al. 1998 <sup>[[#fn:r672|672]]</sup> ).

There has been considerable increase in the last decade of PES, or programmes that exchange value for land management practices intended to ensure ES (Salzman et al. 2018 <sup>[[#fn:r673|673]]</sup> ; Yang and Lu 2018 <sup>[[#fn:r674|674]]</sup> ; Barbier 2011 <sup>[[#fn:r675|675]]</sup> ). However, there is a deficiency in comprehensive and reliable data concerning the impact of PES on ecosystems, human well-being, their efficiency, and effectiveness (Pynegar et al. 2018 <sup>[[#fn:r676|676]]</sup> ; Reed et al. 2014 <sup>[[#fn:r677|677]]</sup> ; Salzman et al. 2018 <sup>[[#fn:r678|678]]</sup> ; Barbier 2011 <sup>[[#fn:r679|679]]</sup> ; Yang and Lu 2018 <sup>[[#fn:r680|680]]</sup> ). While some studies assess ecological effectiveness and social equity, fewer assess economic efficiency (Yang and Lu 2018 <sup>[[#fn:r681|681]]</sup> ). Part of the challenge surrounds the fact that the majority of ES are not marketed, so determining how changes in ecosystems structures, functions and processes influence the quantity and quality of ES flows to people is challenging (Barbier 2011 <sup>[[#fn:r682|682]]</sup> ). PES include agri-environmental targeted outcome-based payments, but challenges exist in relation to scientific uncertainty, pricing, timing of payments, increasing risk to land managers, World Trade Organization compliance, and barriers of land management and scale (Reed et al. 2014 <sup>[[#fn:r683|683]]</sup> ).

PES is contested (Wang and Fu 2013 <sup>[[#fn:r684|684]]</sup> ; Czembrowski and Kronenberg 2016 <sup>[[#fn:r685|685]]</sup> ; Perry 2015 <sup>[[#fn:r686|686]]</sup> ) for four reasons: (i) understanding and resolving trade-offs between conflicting groups of stakeholders (Wam et al. 2016 <sup>[[#fn:r687|687]]</sup> ; Matthies et al. 2015 <sup>[[#fn:r688|688]]</sup> ); (ii) knowledge and technology capacity (Menz et al. 2013 <sup>[[#fn:r689|689]]</sup> ); (iii) challenges integrating PES with economic and other policy instruments (Ring and Schröter-Schlaack 2011 <sup>[[#fn:r690|690]]</sup> ; Tallis et al. 2008 <sup>[[#fn:r691|691]]</sup> ; Elmqvist et al. 2003 <sup>[[#fn:r692|692]]</sup> ; Albert et al. 2014 <sup>[[#fn:r693|693]]</sup> ); and (iv) top-down climate change mitigation initiatives which are still largely carbon-centric, with limited opportunities for decentralised ecological restoration at local and regional scales (Vijge and Gupta 2014 <sup>[[#fn:r694|694]]</sup> ).

These challenges and contestations can be resolved with the participation of people in establishing PES, thereby addressing trust issues, negative attitudes, and resolving trade-offs between issues (such as retaining forests that consume water versus the provision of run-off, or balancing payments to providers versus cost to society) (Sorice et al. 2018 <sup>[[#fn:r695|695]]</sup> ; Matthies et al. 2015 <sup>[[#fn:r696|696]]</sup> ). Similarly, a ‘co-constructive’ approach is used involving a diversity of stakeholders generating policy-relevant knowledge for sustainable management of biodiversity and ES at all relevant spatial scales, by the current Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) initiative (Díaz et al. 2015 <sup>[[#fn:r697|697]]</sup> ). Invasive species are also best identified and managed with the participation of people through collective decisions, coordinated programmes, and extensive research and outreach to address their complex social-ecological impacts (Wittmann et al. 2016 <sup>[[#fn:r698|698]]</sup> ; Epanchin-Niell et al. 2010 <sup>[[#fn:r699|699]]</sup> ).

Ecosystem restoration with co-benefits for diverse ES can be achieved through passive restoration, passive restoration with protection, and active restoration with planting (Birch et al. 2010 <sup>[[#fn:r700|700]]</sup> ; Cantarello et al. 2010 <sup>[[#fn:r701|701]]</sup> ). Taking into account the costs of restoration and co-benefits from bundles of ES (carbon, tourism, timber), the benefit-cost ratio (BCR) of active restoration and passive restoration with protection was always less than 1, suggesting that financial incentives would be required. Passive restoration was the most cost-effective with a BCR generally between 1 and 100 for forest, grassland and shrubland restoration (TEEB 2009 <sup>[[#fn:r702|702]]</sup> ; Cantarello et al. 2010 <sup>[[#fn:r703|703]]</sup> ). Passive restoration is generally more cost-effective, but there is a danger that it could be confused with abandoned land in the absence of secure tenure and a long time period (Zahawi et al. 2014 <sup>[[#fn:r704|704]]</sup> ). Net social benefits of degraded land restoration in dry regions range from about 200–700 USD per hectare (Cantarello et al. 2010 <sup>[[#fn:r705|705]]</sup> ). Investments in active restoration could benefit from analyses of past land use, the natural resilience of the ecosystem, and the specific objectives of each project (Meli et al. 2017 <sup>[[#fn:r706|706]]</sup> ). One successful example is the Working for Water Programme in South Africa that linked restoration through removal of invasive species and enhanced water security (Milton et al. 2003 <sup>[[#fn:r707|707]]</sup> ).

Forest, water and energy cycle interactions and teleconnections such as contribution to rainfall potentially (Aragão 2012 <sup>[[#fn:r708|708]]</sup> ; Ellison et al. 2017 <sup>[[#fn:r709|709]]</sup> ; Paul et al. 2018 <sup>[[#fn:r710|710]]</sup> ; Spracklen et al. 2012 <sup>[[#fn:r711|711]]</sup> ) provide a foundation for achieving forest-based adaptation and mitigation goals. They are, however, poorly integrated in policy and decision-making, including PES (Section 2.5.4).

<div id="section-7-4-6-3-standards-and-certification-for-sustainability-of-biomass-and-land-use-sectors"></div>

<span id="standards-and-certification-for-sustainability-of-biomass-and-land-use-sectors"></span>
==== 7.4.6.3 Standards and certification for sustainability of biomass and land-use sectors ====

<div id="section-7-4-6-3-standards-and-certification-for-sustainability-of-biomass-and-land-use-sectors-block-1"></div>

During the past two decades, standards and certification have emerged as important sustainability and conservation instruments for agriculture, forestry, bioenergy, land-use management and bio-based products (Lambin et al. 2014 <sup>[[#fn:r712|712]]</sup> ; Englund and Berndes 2015 <sup>[[#fn:r713|713]]</sup> ; Milder et al. 2015 <sup>[[#fn:r714|714]]</sup> ; Giessen et al. 2016a <sup>[[#fn:r715|715]]</sup> ; Endres et al. 2015 <sup>[[#fn:r716|716]]</sup> ; Byerlee et al. 2015 <sup>[[#fn:r717|717]]</sup> ; van Dam et al. 2010 <sup>[[#fn:r718|718]]</sup> ). Standards are normally voluntary, but can also become obligatory through legislation. A standard provides specifications or guidelines to ensure that materials, products, processes and services are fit for purpose, whereas certification is the procedure through which an accredited party confirms that a product, process or service is in conformity with certain standards. Standards and certification are normally carried out by separate organisations for legitimacy and accountability (Section7.6.6).The International Organization for Standardization is a key source for global environmental standards. Those with special relevance for land and climate include a recent standard on combating land degradation and desertification (ISO 2017 <sup>[[#fn:r719|719]]</sup> ) and an earlier standard on sustainable bioenergy and biomass use (ISO 2015 <sup>[[#fn:r720|720]]</sup> ; Walter et al. 2018 <sup>[[#fn:r721|721]]</sup> ). Both aim to support the long-term transition to a climate-resilient bioeconomy; there is ''medium evidence'' on the sustainability implications of different bioeconomy pathways, but ''low agreement'' as to which pathways are socially and environmentally desirable (Priefer et al. 2017 <sup>[[#fn:r722|722]]</sup> ; Johnson 2017 <sup>[[#fn:r723|723]]</sup> ; Bennich et al. 2017a <sup>[[#fn:r724|724]]</sup> ).

Table 7.3 provides a summary of selected standards and certification schemes with a focus on land use and climate: the tickmark shows inclusion of different sustainability elements, with all recognising the inherent linkages between the biophysical and social aspects of land use. Some certification schemes and best practice guidelines are specific to a particular agriculture crop (e.g., soya, sugarcane) or a tree (e.g., oil palm) while others are general. International organisations promote sustainable land and biomass use through good practice guidelines, voluntary standards and jurisdictional approaches (Scarlat and Dallemand 2011 <sup>[[#fn:r725|725]]</sup> ; Stattman et al. 2018a <sup>[[#fn:r726|726]]</sup> ). Other frameworks, such as the Global Bioenergy Partnership (GBEP) focus on monitoring land and biomass use through a set of indicators that are applied across partner countries, thereby also promoting technology/knowledge transfer (GBEP 2017 <sup>[[#fn:r727|727]]</sup> ). The Economics of Land Degradation (ELD) Initiative provides common guidelines for economic assessments of land degradation (Nkonya et al. 2013 <sup>[[#fn:r728|728]]</sup> ).

Whereas current standards and certification focus primarily on land, climate and biomass impacts where they occur, more recent analysis considers trade-related land-use change by tracing supply chain impacts from producer to consumer, leading to the notion of ‘imported deforestation’ that occurs from increasing demand and trade in unsustainable forest and agriculture products, which is estimated to account for 26% of all tropical deforestation (Pendrill et al. 2019 <sup>[[#fn:r729|729]]</sup> ). Research and implementation efforts aim to improve supply chain transparency and promote commitments to ‘zero deforestation’ (Gardner et al. 2018a <sup>[[#fn:r730|730]]</sup> ; Garrett et al. 2019 <sup>[[#fn:r731|731]]</sup> ; Newton et al. 2018 <sup>[[#fn:r732|732]]</sup> ; Godar and Gardner 2019 <sup>[[#fn:r733|733]]</sup> ; Godar et al. 2015 <sup>[[#fn:r734|734]]</sup> , 2016). France has developed specific policies on imported deforestation that are expected to eventually include a ‘zero deforestation’ label (Government of France 2019).

The sustainability of biofuels and bioenergy has been in particular focus during the past decade or so due to biofuel mandates and renewable energy policies in the USA, EU and elsewhere (van Dam et al. 2010 <sup>[[#fn:r735|735]]</sup> ; Scarlat and Dallemand 2011 <sup>[[#fn:r736|736]]</sup> ). The European Union Renewable Energy Directive (EU-RED) established sustainability criteria in relation to EU renewable energy targets in the transport sector (European Commission 2012 <sup>[[#fn:r737|737]]</sup> ), which subsequently had impacts on land use and trade with third-party countries (Johnson et al. 2012 <sup>[[#fn:r738|738]]</sup> ). In particular, the EU-RED marked a departure in the context of Kyoto/UNFCCC guidelines by extending responsibility for emissions beyond the borders of final use, and requiring developing countries wishing to sell into the EU market to meet the sustainability criteria (Johnson 2011b <sup>[[#fn:r739|739]]</sup> ). The recently revised EU-RED provides sustainability criteria that include management of land and forestry as well as socio-economic aspects (European Union 2018 <sup>[[#fn:r740|740]]</sup> ; Faaij 2018 <sup>[[#fn:r741|741]]</sup> ; Stattman et al. 2018b <sup>[[#fn:r742|742]]</sup> ). Standards and certification aim to address potential conflicts between different uses of biomass, and most schemes also consider co-benefits and synergies (see Cross-Chapter Box 7 in Chapter 6). Bioenergy may offer additional income and livelihoods to farmers as well as improvements in technical productivity and multi-functional landscapes (Rosillo Callé and Johnson 2010a <sup>[[#fn:r743|743]]</sup> ; Kline et al. 2017 <sup>[[#fn:r744|744]]</sup> ; Araujo Enciso et al. 2016 <sup>[[#fn:r745|745]]</sup> ). Results depend on the commodities involved, and also differ between rural and urban areas.

Analyses on the implementation of standards and certification for land and biomass use have focused on their stringency, effectiveness and geographical scope as well as socio-economic impacts such as land tenure, gender and land rights (Diaz-Chavez 2011 <sup>[[#fn:r746|746]]</sup> ; German and Schoneveld 2012 <sup>[[#fn:r747|747]]</sup> ; Meyer and Priess 2014 <sup>[[#fn:r748|748]]</sup> ). The level of stringency and enforcement varies with local environmental conditions, governance approaches and the nature of the feedstock produced (Endres et al. 2015 <sup>[[#fn:r749|749]]</sup> ; Lambin et al. 2014 <sup>[[#fn:r750|750]]</sup> ; Giessen et al. 2016b <sup>[[#fn:r751|751]]</sup> ; Stattman et al. 2018b <sup>[[#fn:r752|752]]</sup> ). There is ''low evidence'' and ''low agreement'' on how the application and use of standards and certification has actually improved sustainability beyond the local farm, factory or plantation level; the lack of harmonisation and consistency across countries that has been observed, even within a common market or economic region such as the EU, presents a barrier to wider market impacts (Endres et al. 2015 <sup>[[#fn:r753|753]]</sup> ; Stattman et al. 2018b <sup>[[#fn:r754|754]]</sup> ; ISEAL Alliance 2018 <sup>[[#fn:r755|755]]</sup> ). In the forest sector, there is evidence that certification programmes such as the Forest Stewardship Council (FSC) have reduced deforestation in the aggregate, as well as reducing air pollution (Miteva et al. 2015 <sup>[[#fn:r756|756]]</sup> ; Mcdermott et al. 2015 <sup>[[#fn:r757|757]]</sup> ). Certification and standards cannot address global systemic concerns such as impacts on food prices or other market-wide effects, but rather are aimed primarily at insuring best practices in the local context. More general approaches to certification such as the Gold Standard are designed to accelerate progress toward the SDGs as well as the Paris Climate Agreement by certifying investment projects while also emphasising support to governments (Gold Standard).

<div id="section-7-4-6-3-standards-and-certification-for-sustainability-of-biomass-and-land-use-sectors-block-2"></div>

<span id="table-7.3"></span>
<!-- START IMG -->
<!-- TABLE IMG -->
<!-- IMG TITLE -->
'''Table 7.3'''

<span id="selected-standards-and-certification-schemes-and-their-components-or-coverage."></span>
<!-- IMG CAPTION -->
'''Selected standards and certification schemes and their components or coverage.'''
<!-- IMG FILE -->
[[File:9eb3ea4cfc1cff52877c32deb96eb113 table-7.3.png]]

Source: Modified from (European Commission 2012; Diaz-Chavez 2015).

<!-- IMG FILE -->
[[File:3747e69a13526344e0f424f79fc33c6d v.png]] indicates that the issue is addressed in the standard or scheme

* a includes restoration of degraded land in some cases (especially ISO 14055–1)
* b where specifically indicated
* c reference to the RSB certification/standard
* d where specifically noted

<!-- END IMG -->
<div id="section-7-4-6-4-energy-access-and-biomass-use"></div>

<span id="energy-access-and-biomass-use"></span>
==== 7.4.6.4 Energy access and biomass use ====

<div id="section-7-4-6-4-energy-access-and-biomass-use-block-1"></div>

Access to modern energy services is a key component of SDG 7, with an estimated 1.1 billion people lacking access to electricity, while nearly 3 billion people rely on traditional biomass (fuelwood, agriculture residues, animal dung, charcoal) for household energy needs (IEA 2017 <sup>[[#fn:r758|758]]</sup> ). Lack of access to modern energy services is significant in the context of land-climate systems because heavy reliance on traditional biomass can contribute to land degradation, household air pollution and GHG emissions (see Cross-Chapter Box 12 in Chapter 7). A variety of policy instruments and programmes have been aimed at improving energy access and thereby reducing the heavy reliance on traditional biomass (Table 7.2); there is ''high evidence'' and ''high agreement'' that programmes and policies that reduce dependence on traditional biomass will have benefits for health and household productivity, as well as reducing land degradation (Section 4.5.4) and GHG emissions (Bailis et al. 2015 <sup>[[#fn:r759|759]]</sup> ; Cutz et al. 2017a <sup>[[#fn:r760|760]]</sup> ; Masera et al. 2015 <sup>[[#fn:r761|761]]</sup> ; Goldemberg et al. 2018a <sup>[[#fn:r762|762]]</sup> ; Sola et al. 2016a <sup>[[#fn:r763|763]]</sup> ; Rao and Pachauri 2017 <sup>[[#fn:r764|764]]</sup> ; Denton et al. 2014 <sup>[[#fn:r765|765]]</sup> ). There can be trade-offs across different options, especially between health and climate benefits, since more efficient wood stoves might have only limited effect, whereas gaseous and liquid fuels (e.g., biogas, LPG, bioethanol) will have highly positive health benefits and climate benefits that vary depending on specific circumstances of the substitution (Cameron et al. 2016 <sup>[[#fn:r766|766]]</sup> ; Goldemberg et al. 2018b <sup>[[#fn:r767|767]]</sup> ). Unlike traditional biomass, modern bioenergy offers high-quality energy services, although, for household cookstoves, even the cleanest options using wood may not perform as well in terms of health and/or climate benefits (Fuso Nerini et al. 2017 <sup>[[#fn:r768|768]]</sup> ; Goldemberg et al. 2018b <sup>[[#fn:r769|769]]</sup> ).

<div id="section-7-4-6-4-energy-access-and-biomass-use-block-2"></div>

'''Case study | Forest conservation instruments: REDD+ in the Amazon and India'''

More than 50 countries have developed national REDD+ strategies, which have key conditions for addressing deforestation and forest degradation (improved monitoring capacities, understanding of drivers, increased stakeholder involvement, and providing a platform to secure indigenous and community land rights). However, to achieve its original objectives and to be effective under current conditions, forest-based mitigation actions need to be incorporated in national development plans and official climate strategies, and mainstreamed across sectors and levels of government (Angelsen et al. 2018a <sup>[[#fn:r770|770]]</sup> ).

The Amazon region can illustrate the complexity of the implementation of REDD+, in the most biodiverse place on the planet, with millions of inhabitants and hundreds of ethnic groups, under the jurisdiction of eight countries. While different experiences can be drawn at different spatial scales, at the regional-level, for example, Amazon Fund (van der Hoff et al. 2018 <sup>[[#fn:r771|771]]</sup> ), at the subnational level (Furtado 2018 <sup>[[#fn:r772|772]]</sup> ), and at the local level (Alvarez et al. 2016 <sup>[[#fn:r773|773]]</sup> ; Simonet et al. 2019 <sup>[[#fn:r774|774]]</sup> ), there is ''medium evidence'' and ''high agreement'' that REDD+ has stimulated sustainable land-use investments but is also competing with other land uses (e.g., agroindustry) and scarce international funding (both public and private) (Bastos Lima et al. 2017b <sup>[[#fn:r775|775]]</sup> ; Angelsen et al. 2018b <sup>[[#fn:r776|776]]</sup> ).

In the Amazon, at the local level, a critical issue has been the incorporation of indigenous people in the planning and distribution of benefits of REDD+ projects. While REDD+, in some cases, has enhanced participation of community members in the policy-planning process, fund management, and carbon baseline establishment, increasing project reliability and equity (West 2016), it is clear that, in this region, insecure and overlapping land rights, as well as unclear and contradictory institutional responsibilities, are probably the major problems for REDD+ implementation (Loaiza et al. 2017 <sup>[[#fn:r777|777]]</sup> ). Despite legal and rhetoric recognition of indigenous land rights, effective recognition is still lacking (Aguilar-Støen 2017 <sup>[[#fn:r778|778]]</sup> ). The key to the success of REDD+ in the Amazon, has been the application of both incentives and disincentives on key safeguard indicators, including land security, participation, and well-being (Duchelle et al. 2017 <sup>[[#fn:r779|779]]</sup> ).

On the other hand, at the subnational level, REDD+ has been unable to shape land-use dynamics or landscape governance, in areas suffering strong exogenous factors, such as extractive industries, and in the absence of effective regional regulation for sustainable land use (Rodriguez-Ward et al. 2018 <sup>[[#fn:r780|780]]</sup> ; Bastos Lima et al. 2017b <sup>[[#fn:r781|781]]</sup> ). Moreover, projects with weak financial incentives, engage households with high off-farm income, which are already better off than the poorest families (Loaiza et al. 2015 <sup>[[#fn:r782|782]]</sup> ). Beyond operational issues, clashing interpretations of results might create conflict between implementing countries or organisations and donor countries, which have revealed concerns over the performance of projects (van der Hoff et al. 2018 <sup>[[#fn:r783|783]]</sup> ) REDD+ Amazonian projects often face methodological issues, including how to assess the opportunity cost among landholders, and informing REDD+ implementation (Kweka et al. 2016 <sup>[[#fn:r784|784]]</sup> ). REDD+ based projects depend on consistent environmental monitoring methodologies for measuring, reporting and verification and, in the Amazon, land-cover estimates are crucial for environmental monitoring efforts (Chávez Michaelsen et al. 2017 <sup>[[#fn:r785|785]]</sup> ).

In India, forests and wildlife concerns are on the concurrent list of the Constitution since an amendment in 1976, thus giving the central or federal government a strong role in matters related to governance of forests. High rates of deforestation due to development projects led to the Forest (Conservation) Act (1980) which requires central government approval for diversion of forest land in any state or union territory.

Before 2006, forest diversion for development projects leading to deforestation needed clearance from the Central Government under the provisions of the Forest (Conservation Act) 1980. In order to regulate forest diversion, and as payment for ES, a net present value (NPV) frame-work was introduced by the Supreme Court of India, informed by the Kanchan Chopra committee (Chopra 2017). The Forest (Conservation) Act of 1980 requires compensatory afforestation in lieu of forest diversion, and the Supreme Court established the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) which collects funds for compensatory afforestation and on account of NPV from project developers.

As of February 2018, 6825 million USD had accumulated in CAMPA funds in lieu of NPV paid by developers diverting forest land throughout India for non-forest use. Funds are released by the central government to state governments for afforestation and conservation-related activities to ‘compensate’ for diversion of forests. This is now governed by legislation called the CAMPA Act, passed by the Parliament of India in July 2016. The CAMPA mechanism has, however, invited criticism on various counts in terms of undervaluation of forest, inequality, lack of participation and environmental justice (Temper and Martinez-Alier 2013).

The other significant development related to forest land was the landmark legislation called the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 or Forest Rights Act (FRA) passed by the Parliament of India in 2007. This is the largest forest tenure legal instrument in the world and attempted to undo historical injustice to forest dwellers and forest-dependent communities whose traditional rights and access were legally denied under forest and wildlife conservation laws. The FRA recognises the right to individual land titles on land already cleared, as well as community forest rights such as collection of forest produce. A total of 64,328 community forest rights and a total of 17,040,343 individual land titles had been approved and granted up to the end of 2017. Current concerns on policy and implementation gaps are about strengths and pitfalls of decentralisation, identifying genuine right holders, verification of land rights using technology and best practices, and curbing illegal claims (Sarap et al. 2013; Reddy et al. 2011; Aggarwal 2011; Ramnath 2008; Ministry of Environment and Forests and Ministry and Tribal Affairs, Government of India 2010).

As per the FRA, the forest rights shall be conferred free of all encumbrances and procedural requirements. Furthermore, without the FRA’s provision for getting the informed consent of local communities for both diversion of community forest land and for reforestation, there would be legal and administrative hurdles in using existing forest land for implementation of India’s ambitious Green India Mission that aims to respond to climate change by a combination of adaptation and mitigation measures in the forestry sector. It aims to increase forest/tree cover to the extent of 5 million hectares (Mha) and improve quality of forest/tree cover on another 5 Mha of forest/non-forest lands and support forest-based livelihoods of 3 million families and generate co-benefits through ES (Government of India 2010).

Thus, the community forest land recognised under FRA can be used for the purpose of compensatory afforestation or restoration under REDD+ only with informed consent of the communities and a decentralised mechanism for using CAMPA funds. India’s forest and forest restoration can potentially move away from a top-down carbon centric model with the effective participation of local communities (Vijge and Gupta 2014; Murthy et al. 2018a).

India has also experimented with the world’s first national inter-governmental ecological fiscal transfer (EFT) from central to local and state government to reward them for retaining forest cover. In 2014, India’s 14th Finance Commission added forest cover to the formula that determines the amount of tax revenue the central government distributes annually to each of India’s 29 states. It is estimated that, in four years, it would have distributed 6.9–12 billion USD per year to states in proportion to their 2013 forest cover, amounting to around 174–303 USD per hectare of forest per year (Busch and Mukherjee 2017). State governments in India now have a sizeable fiscal incentive based on extent of forest cover at the time of policy implementation, contributing to the achievement of India’s climate mitigation and forest conservation goals. India’s tax revenue distribution reform has created the world’s first EFTs for forest conservation, and a potential model for other countries. However, it is to be noted that EFT is calculated based on a one-time estimate of forest cover prior to policy implementation, hence does not incentivise ongoing protection and this is a policy gap. It’s still too early but its impact on trends in forest cover in the future and its ability to conserve forests without other investments and policy instruments is promising but untested (Busch and Mukherjee 2017; Busch 2018).

In order to build on the new promising policy developments on forest rights and fiscal incentives for forest conservation in India, incentivising ongoing protection, further investments in monitoring (Busch 2018), decentralisation (Somanathan et al. 2009) and promoting diverse non-agricultural forest and range of land-based livelihoods (e.g., sustainable non-timber forest product extraction, regulated pastures, carbon credits for forest regeneration on marginal agriculture land and ecotourism revenues) as part of individual and community forest tenure and rights are ongoing concerns. Decentralised sharing of CAMPA funds between government and local communities for forest restoration as originally suggested and filling in implementation gaps could help reconcile climate change mitigation through forest conservation, REDD+ and environmental justice (Vijge and Gupta 2014; Temper and Martinez-Alier 2013; Badola et al. 2013; Sun and Chaturvedi 2016; Murthy et al. 2018b; Chopra 2017; Ministry of Environment, Forest and Climate Change, and Ministry of Tribal Affairs, Government of India 2010).

<span id="economic-and-financial-instruments-for-adaptation-mitigation-and-land"></span>
=== 7.4.7 Economic and financial instruments for adaptation, mitigation, and land ===

<div id="section-7-4-7-economic-and-financial-instruments-for-adaptation-mitigation-and-land-block-1"></div>

There is an urgent need to increase the volume of climate financing and bridge the gap between global adaptation needs and available funds ( ''medium confidence'' ) (Masson-Delmotte et al. 2018 <sup>[[#fn:r786|786]]</sup> ; Kissinger et al. 2019 <sup>[[#fn:r787|787]]</sup> ; Chambwera and Heal 2014 <sup>[[#fn:r788|788]]</sup> ), especially in relation to agriculture (FAO 2010 <sup>[[#fn:r789|789]]</sup> ). The land sector offers the potential to balance the synergies between mitigation and adaptation (Locatelli et al. 2016 <sup>[[#fn:r790|790]]</sup> ) – although context and unavailability of data sets makes cost comparisons between mitigation and adaptation difficult (UNFCCC 2018b <sup>[[#fn:r791|791]]</sup> ). Estimates of adaptation costs range from 140 to 300 billion USD by 2030, and between 280 and 500 billion USD by 2050; (UNEP 2016 <sup>[[#fn:r792|792]]</sup> ). These figures vary according to methodologies and approaches (de Bruin et al. 2009 <sup>[[#fn:r793|793]]</sup> ; IPCC 2014 2014 <sup>[[#fn:r794|794]]</sup> ; OECD 2008 <sup>[[#fn:r795|795]]</sup> ; Nordhaus 1999 <sup>[[#fn:r796|796]]</sup> ; UNFCCC 2007 <sup>[[#fn:r797|797]]</sup> ; Plambeck et al. 1997 <sup>[[#fn:r798|798]]</sup> ).

<div id="section-7-4-7-1-financing-mechanisms-for-land-mitigation-and-adaptation"></div>

<span id="financing-mechanisms-for-land-mitigation-and-adaptation"></span>
==== 7.4.7.1 Financing mechanisms for land mitigation and adaptation ====

<div id="section-7-4-7-1-financing-mechanisms-for-land-mitigation-and-adaptation-block-1"></div>

There is a startling array of diverse and fragmented climate finance sources: more than 50 international public funds, 60 carbon markets, 6000 private equity funds, 99 multilateral and bilateral climate funds (Samuwai and Hills 2018 <sup>[[#fn:r799|799]]</sup> ). Most public finance for developing countries flows through bilateral and multilateral institutions such as the World Bank, the International Monetary Fund, International Finance Corporation, regional development banks, as well as specialised multilateral institutions such as the Global Environmental Fund, and the EU Solidarity Fund. Some governments have established state investment banks (SIBs) to close the financing gap, including the UK (Green Investment Bank), Australia (Clean Energy Finance Corporation) and in Germany (Kreditanstalt für Wiederaufbau) the Development Bank has been involved in supporting low-carbon finance (Geddes et al. 2018 <sup>[[#fn:r800|800]]</sup> ). The Green Climate Fund (GCF) now offers additional finance, but is still a new institution with policy gaps, a lengthy and cumbersome process related to approval (Brechin and Espinoza 2017 <sup>[[#fn:r801|801]]</sup> ; Khan and Roberts 2013 <sup>[[#fn:r802|802]]</sup> ; Mathy and Blanchard 2016 <sup>[[#fn:r803|803]]</sup> ), and challenges with adequate and sustained funding (Schalatek and Nakhooda 2013 <sup>[[#fn:r804|804]]</sup> ). Private adaptation finance exists, but is difficult to define, track, and coordinate (Nakhooda et al. 2016 <sup>[[#fn:r805|805]]</sup> ).

The amount of funding dedicated to agriculture, land degradation or desertification is very small compared to total climate finance (FAO 2010). Funding for agriculture (rather than mitigation) is accessed through the smaller adaptation funds (Lobell et al. 2013 <sup>[[#fn:r806|806]]</sup> ). Focusing on synergies, between mitigation, adaptation, and increased productivity, such as through climate-smart agriculture (CSA) (Lipper et al. 2014b <sup>[[#fn:r807|807]]</sup> ) (Section 7.5.6), may leverage greater financial resources (Suckall et al. 2015 <sup>[[#fn:r808|808]]</sup> ; Locatelli et al. 2016 <sup>[[#fn:r809|809]]</sup> ). Payments for ecosystem services (Section 7.4.6) are another emerging area to encourage environmentally desirable practices, although they need to be carefully designed to be effective (Engel and Muller 2016 <sup>[[#fn:r810|810]]</sup> ).

The UNCCD established the Land Degradation Neutrality Fund (LDN Fund) to mobilise finance and scale-up land restoration and sustainable business models on restored land to achieve the target of a land degradation neutral world (SDG target 15.3) by 2030. The LDN Fund generates revenues from sustainable use of natural resources, creating green job opportunities, sequestering CO <sub>2</sub> , and increasing food and water security (Cowie et al. 2018a <sup>[[#fn:r811|811]]</sup> ; Akhtar-Schuster et al. 2017 <sup>[[#fn:r812|812]]</sup> ). The fund leverages public money to raise private capital for SLM and land restoration projects (Quatrini and Crossman 2018 <sup>[[#fn:r813|813]]</sup> ; Stavi and Lal 2015 <sup>[[#fn:r814|814]]</sup> ). Many small-scale projects are demonstrating that sustainable landscape management (Section 7.6.3) is key to achieving LDN, and it is also more financially viable in the long term than the unsustainable alternative (Tóth et al. 2018 <sup>[[#fn:r815|815]]</sup> ; Kust et al. 2017 <sup>[[#fn:r816|816]]</sup> ).

<div id="section-7-4-7-2-instruments-to-manage-the-financial-impacts-of-climate-and-land-change-disruption"></div>

<span id="instruments-to-manage-the-financial-impacts-of-climate-and-land-change-disruption"></span>
==== 7.4.7.2 Instruments to manage the financial impacts of climate and land change disruption ====

<div id="section-7-4-7-2-instruments-to-manage-the-financial-impacts-of-climate-and-land-change-disruption-block-1"></div>

Comprehensive risk management (Section 7.4.3.1) designs a portfolio of instruments which are used across a continuum of preemptive, planning and assessment, and contingency measures in order to bolster resilience (Cummins and Weiss 2016 <sup>[[#fn:r817|817]]</sup> ) and address limitations of any one instrument (Surminski 2016 <sup>[[#fn:r818|818]]</sup> ; Surminski et al. 2016 <sup>[[#fn:r819|819]]</sup> ; Linnerooth-bayer et al. 2019 <sup>[[#fn:r820|820]]</sup> ). Instruments designed and applied in isolation have shown short-term results, rather than sustained intended impacts (Vincent et al. 2018 <sup>[[#fn:r821|821]]</sup> ). Risk assessments limited to events and impacts on particular asset classes or sectors can misinform policy and drive misallocation of funding (Gallina et al. 2016 <sup>[[#fn:r822|822]]</sup> ; Jongman et al. 2014 <sup>[[#fn:r823|823]]</sup> ).

Comprehensive risk assessment combined with risk layering approaches that assign different instruments to different magnitude and frequency of events, have better potential to provide stability to societies facing disruption (Mechler et al. 2014 <sup>[[#fn:r824|824]]</sup> ; Surminski et al. 2016 <sup>[[#fn:r825|825]]</sup> ). Governments and citizens define limits of what they consider acceptable risks, risks for which market or other solutions can be developed and catastrophic risks that require additional public protection and intervention. Different financial tools may be used for these different categories of risk or phases of the risk cycle (preparedness, relief, recovery, reconstruction).

In order to protect lives and livelihoods early action is critical, including a coordinated plan for action agreed in advance, a fast, evidence-based decision-making process, and contingency financing to ensure that the plan can be implemented (Clarke and Dercon 2016a). Forecast-based finance mechanisms incorporate these principles, using climate or other indicators to trigger funding and action prior to a shock (Wilkinson 2018 <sup>[[#fn:r826|826]]</sup> ). Forecast-based mechanisms can be linked with social protection systems by providing contingent scaled-up finance quickly to vulnerable populations following disasters, enhancing scalability, timeliness, predictability and adequacy of social protection benefits (Wilkinson 2018 <sup>[[#fn:r827|827]]</sup> ; Costella et al. 2017b <sup>[[#fn:r828|828]]</sup> ; World Food Programme 2018 <sup>[[#fn:r829|829]]</sup> ).

Measures in advance of risks set aside resources before negative impacts related to adverse weather, climatic stressors, and land changes occur. These tools are frequently applied in extreme event, rapid onset contexts. These measures are the main instruments for reducing fatalities and limiting damage from extreme climate and land change events (Surminski et al. 2016 <sup>[[#fn:r830|830]]</sup> ). Finance tools in advance of risk include insurance (macro, meso, micro), green bonds, and forecast-based finance (Hunzai et al. 2018 <sup>[[#fn:r831|831]]</sup> ).

There is ''high confidence'' that insurance approaches that are designed to effectively reduce and communicate risks to the public and beneficiaries, designed to reduce risk and foster appropriate adaptive responses, and provide value in risk transfer, improve economic stability and social outcomes in both higher – and lower-income contexts (Kunreuther and Lyster 2016 <sup>[[#fn:r832|832]]</sup> ; Outreville 2011b <sup>[[#fn:r833|833]]</sup> ; Surminski et al. 2016 <sup>[[#fn:r834|834]]</sup> ; Kousky et al. 2018b <sup>[[#fn:r835|835]]</sup> ), bolster food security, help keep children in school, and help safeguard the ability of low-income households to pay for essentials like medicines (Shiferaw et al. 2014 <sup>[[#fn:r836|836]]</sup> ; Hallegatte et al. 2017 <sup>[[#fn:r837|837]]</sup> ).

Low-income households show demand for affordable risk transfer tools, but demand is constrained by liquidity, lack of assets, financial and insurance literacy, or proof of identity required by institutions in the formal sector (Eling et al. 2014 <sup>[[#fn:r838|838]]</sup> ; Cole 2015 <sup>[[#fn:r839|839]]</sup> ; Cole et al. 2013 <sup>[[#fn:r840|840]]</sup> ; Ismail et al. 2017 <sup>[[#fn:r841|841]]</sup> ). Microinsurance participation takes many forms, including through mobile banking (Eastern Africa, Bangladesh), linked with social protection or other social stabilisation programmes (Ethiopia, Pakistan, India), through flood or drought protection schemes (Indonesia, the Philippines, the Caribbean, and Latin America), often in the form of weather index insurance. The insurance industry faces challenges due to low public awareness of how insurance works. Other challenges include risk, low capacity in financial systems to administer insurance, data deficits, and market imperfections (Mechler et al. 2014 <sup>[[#fn:r842|842]]</sup> ; Feyen et al. 2011 <sup>[[#fn:r843|843]]</sup> ; Gallagher 2014 <sup>[[#fn:r844|844]]</sup> ; Kleindorfer et al. 2012 <sup>[[#fn:r845|845]]</sup> ; Lazo et al. <sup>[[#fn:r846|846]]</sup> ; Meyer and Priess 2014 <sup>[[#fn:r847|847]]</sup> ; Millo 2016 <sup>[[#fn:r848|848]]</sup> ).

Countries also request grant assistance, and contingency debt finance that includes dedicated funds, set aside for unpredictable climate-related disasters, household savings, and loans with ‘catastrophe risk deferred drawdown option’ (which allows countries to divert loans from development objectives such as health, education,  and infrastructure to make immediate disbursement of funds in the event of a disaster) (Kousky and Cooke 2012 <sup>[[#fn:r849|849]]</sup> ; Clarke and Dercon 2016b <sup>[[#fn:r850|850]]</sup> ). Contingency finance is suited to manage frequently occurring, low-impact events (Campillo et al. 2017 <sup>[[#fn:r851|851]]</sup> ; Mahul and Ghesquiere 2010 <sup>[[#fn:r852|852]]</sup> ; Roberts 2017 <sup>[[#fn:r853|853]]</sup> ) and may be linked with social protection systems. These instruments are limited by uncertainty surrounding the size of contingency fund reserves, given unpredictable climate disasters (Roberts 2017 <sup>[[#fn:r854|854]]</sup> ) and lack of borrowing capacity of a country (such as small island states) (Mahul and Ghesquiere 2010 <sup>[[#fn:r855|855]]</sup> ).

In part because of its link with debt burden, contingency, or post-event finance can disrupt development and is not suitable for higher consequence events and processes such as weather extremes or structural changes associated with climate and land change. Post-event finance of negative impacts such as sea level rise, soil salinisation, depletion of groundwater, and widespread land degradation, is likely to become infeasible for multiple, high-cost events and processes. There is ''high confidence'' that post-extreme event assistance may face more severe limitations, given the impacts of climate change (Linnerooth-bayer et al. 2019 <sup>[[#fn:r856|856]]</sup> ; Surminski et al. 2016 <sup>[[#fn:r857|857]]</sup> ; Deryugina 2013 <sup>[[#fn:r858|858]]</sup> ; Dillon et al. 2014 <sup>[[#fn:r859|859]]</sup> ; Clarke 2016 <sup>[[#fn:r860|860]]</sup> ; Shreve and Kelman 2014 <sup>[[#fn:r861|861]]</sup> ; Von Peter et al. 2012 <sup>[[#fn:r862|862]]</sup> ).

In a catastrophe risk pool, multiple countries in a region pool risks in a diversified portfolio. Examples include African Risk Capacity (ARC), the Caribbean Catastrophe Risk Insurance Facility (CCRIF), and the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) (Bresch et al. 2017 <sup>[[#fn:r863|863]]</sup> ; Iyahen and Syroka 2018 <sup>[[#fn:r864|864]]</sup> ). ARC payouts have been used to assist over 2.1 million food insecure people and provide more than 900,000 cattle with subsidised feed in the affected countries (Iyahen and Syroka 2018 <sup>[[#fn:r865|865]]</sup> ). ARC has also developed the Extreme Climate Facility, which is designed to complement existing bilateral, multilateral and private sources of finance to enable proactive adaptation (Vincent et al. 2018 <sup>[[#fn:r866|866]]</sup> ). It provides beneficiaries the opportunity to increase their benefit by reducing exposure to risk through adaptation and risk reduction measures, thus side-stepping ‘moral hazard’ problems sometimes associated with traditional insurance.

Governments pay coupon interest when purchasing catastrophe (CAT) bonds from private or corporate investors. In the case of the predefined catastrophe, the requirement to pay the coupon interest or repay the principal may be deferred or forgiven (Nguyen and Lindenmeier 2014 <sup>[[#fn:r867|867]]</sup> ). CAT bonds are typically short-term instruments (three to five years) and the payout is triggered once a particular threshold of disaster/damage is passed (Härdle and Cabrera 2010 <sup>[[#fn:r868|868]]</sup> ; Campillo et al. 2017 <sup>[[#fn:r869|869]]</sup> ; Estrin and Tan 2016 <sup>[[#fn:r870|870]]</sup> ; Hermann et al. 2016 <sup>[[#fn:r871|871]]</sup> ; Michel-Kerjan 2011 <sup>[[#fn:r872|872]]</sup> ; Roberts 2017 <sup>[[#fn:r873|873]]</sup> ). The primary advantage of CAT bonds is their ability to quickly disburse money in the event of a catastrophe (Estrin and Tan 2016 <sup>[[#fn:r874|874]]</sup> ). Green bonds, social impact bonds, and resilience bonds are other instruments that can be used to fund land-based interventions. However, there are significant barriers for developing country governments to enter into the bond market: lack of familiarity with the instruments; lack of capacity and resources to deal with complex legal arrangements; limited or non-existent data and modelling of disaster exposure; and other political disincentives linked to insurance. For these reasons, the utility and application of bonds is currently largely limited to higher-income developing countries (Campillo et al. 2017 <sup>[[#fn:r875|875]]</sup> ; Le Quesne 2017 <sup>[[#fn:r876|876]]</sup> ).

<div id="section-7-4-7-3-innovative-financing-approaches-for-transition-to-low-carbon-economies"></div>

<span id="innovative-financing-approaches-for-transition-to-low-carbon-economies"></span>
==== 7.4.7.3 Innovative financing approaches for transition to low-carbon economies ====

<div id="section-7-4-7-3-innovative-financing-approaches-for-transition-to-low-carbon-economies-block-1"></div>

Traditional financing mechanisms have not been sufficient and thereby leave a gap in facilitating a rapid transition to a low-carbon economy or building resilience (Geddes et al. 2018 <sup>[[#fn:r877|877]]</sup> ). More recently there have been developments in more innovative mechanisms, including crowdfunding (Lam and Law 2016 <sup>[[#fn:r878|878]]</sup> ), often supported by national governments (in the UK through regulatory and tax support) (Owen et al. 2018 <sup>[[#fn:r879|879]]</sup> ). Crowdfunding has no financial intermediaries and thus low transaction costs, and the projects have a greater degree of independence than bank or institution funding (Miller et al. 2018 <sup>[[#fn:r880|880]]</sup> ). Other examples of innovative mechanisms are community shares for local projects, such as renewable energy (Holstenkamp and Kahla 2016 <sup>[[#fn:r881|881]]</sup> ), or Corporate Power Purchase Agreements (PPAs) used by companies such as Google and Apple to purchase renewable energy directly or virtually from developers (Miller et al. 2018 <sup>[[#fn:r882|882]]</sup> ). Investing companies benefit from avoiding unpredictable price fluctuations as well as increasing their environmental credentials. A second example is auctioned price floors, or subsidies that offer a guaranteed price for future emission reductions, currently being trialled in developing countries, by the World Bank Group, known as the Pilot Auction Facility for Methane and Climate Change Mitigation (PAF) (Bodnar et al. 2018 <sup>[[#fn:r883|883]]</sup> ). Price floors can maximise the climate impact per public dollar while incentivising private investment in low-carbon technologies, and ideally would be implemented in conjunction with complementary policies such as carbon pricing.

In order for climate finance to be as effective and efficient as possible, cooperation between private, public and third sectors (e.g., non-governmental organisations (NGOs), cooperatives, and community groups) is more likely to create an enabling environment for innovation (Owen et al. 2018 <sup>[[#fn:r884|884]]</sup> ). While innovative private sector approaches are making significant progress, the existence of a stable policy environment that provides certainty and incentives for long-term private investment is critical.

<span id="enabling-effective-policy-instruments-policy-portfolio-coherence"></span>
=== 7.4.8 Enabling effective policy instruments – policy portfolio coherence ===

<div id="section-7-4-8-enabling-effective-policy-instruments-policy-portfolio-coherence-block-1"></div>

An enabling environment for policy effectiveness includes: (i) the development of comprehensive policies, strategies and programmes (Section 7.4); (ii) human and financial resources to ensure that policies, programmes and legislation are translated into action; (iii) decision-making that draws on evidence generated from functional information systems that make it possible to monitor trends, track and map actions, and assess impact in a manner that is timely and comprehensive (Section 7.5); (iv) governance coordination mechanisms and partnerships; and (v) a long-term perspective in terms of response options, monitoring, and maintenance (FAO 2017a) (Section 7.6).

A comprehensive consideration of policy portfolios achieves sustainable land and climate management ( ''medium confidence'' ) (Mobarak and Rosenzweig 2013 <sup>[[#fn:r885|885]]</sup> ; Stavropoulou et al. 2017 <sup>[[#fn:r886|886]]</sup> ; Jeffrey et al. 2017 <sup>[[#fn:r887|887]]</sup> ; Howlett and Rayner 2013 <sup>[[#fn:r888|888]]</sup> ; Aalto et al. 2017 <sup>[[#fn:r889|889]]</sup> ; Brander and Keith 2015 <sup>[[#fn:r890|890]]</sup> ; Williams and Abatzoglou 2016 <sup>[[#fn:r891|891]]</sup> ; Linnerooth-Bayer and Hochrainer-Stigler 2015 <sup>[[#fn:r892|892]]</sup> ; FAO 2017b <sup>[[#fn:r893|893]]</sup> ; Bierbaum and Cowie 2018 <sup>[[#fn:r894|894]]</sup> ). Supporting the study of enabling environments, the study of policy mixes has emerged in the last decade in regards to the mix or set of instruments that interact together and are aimed at achieving policy objectives in a dynamic setting (Reichardt et al. 2015 <sup>[[#fn:r895|895]]</sup> ). This includes studying the ultimate objectives of a policy mix – such as biodiversity (Ring and Schröter-Schlaack 2011 <sup>[[#fn:r896|896]]</sup> ) – the interaction of policy instruments within the mix (including climate change mitigation and energy (del Río and Cerdá 2017 <sup>[[#fn:r897|897]]</sup> )) (see Trade-offs and synergies, Section 7.5.6), and the dynamic nature of the policy mix (Kern and Howlett 2009 <sup>[[#fn:r898|898]]</sup> ).

Studying policy mixes allows for a consideration of policy coherence that is broader than the study of discrete policy instruments in rigidly defined sectors, but entails studying policy in relation to the links and dependencies among problems and issues (FAO 2017b <sup>[[#fn:r899|899]]</sup> ). Consideration of policy coherence is a new approach, rejecting simplistic solutions, but acknowledging inherently complex processes involving collective consideration of public and private actors in relation to policy analysis (FAO 2017b <sup>[[#fn:r900|900]]</sup> ). A coherent, consistent mix of policy instruments can solve complex policy problems (Howlett and Rayner 2013 <sup>[[#fn:r901|901]]</sup> ) as it involves lateral, integrative, and holistic thinking in defining and solving problems (FAO 2017b <sup>[[#fn:r902|902]]</sup> ). Such a consideration of policy coherence is required to achieve sustainable development (FAO 2017b <sup>[[#fn:r903|903]]</sup> ; Bierbaum and Cowie 2018 <sup>[[#fn:r904|904]]</sup> ). Consideration of policy coherence potentially addresses three sets of challenges: challenges that exist with assessing multiple hazards and sectors (Aalto et al. 2017 <sup>[[#fn:r905|905]]</sup> ; Brander and Keith 2015 <sup>[[#fn:r906|906]]</sup> ; Williams and Abatzoglou 2016 <sup>[[#fn:r907|907]]</sup> ); challenges in mainstreaming adaptation and risk management into ongoing development planning and decision-making (Linnerooth-Bayer and Hochrainer-Stigler 2015 <sup>[[#fn:r908|908]]</sup> ); and challenges in scaling-up community and ecosystem-based initiatives in countries overly focused on sectors, instead of sustainable use of biodiversity and ES (Reid 2016 <sup>[[#fn:r909|909]]</sup> ). There is a gap in integrated consideration of adaptation, mitigation, climate change policy and development. A study in Indonesia found that, while internal policy coherence between mitigation and adaptation is increasing, external policy coherence between climate change policy and development objectives is still required (Di Gregorio et al. 2017 <sup>[[#fn:r910|910]]</sup> ).

There is ''medium evidence'' and ''high agreement'' that a suite of agricultural business risk programmes (which would include crop insurance and income stability programmes) increase farm financial performance, reduce risk, and also reinforce incentives to adopt stewardship practices (beneficial management practices) improving the environment (Jeffrey et al. 2017 <sup>[[#fn:r911|911]]</sup> ). Consideration of the portfolio of instruments responding to climate change and its associated risks, and the interaction of policy instruments, improve agricultural producer livelihoods (Hurlbert 2018b <sup>[[#fn:r912|912]]</sup> ). In relation to hazards, or climate-related extremes (Section 7.4.3), the policy mix has been found to be a key determinant of the adaptive capacity of agricultural producers. In relation to drought, the mix of policy instruments including crop insurance, SLM practices, bankruptcy and insolvency, co-management of community in water and disaster planning, and water infrastructure programmes are effective at responding to drought (Hurlbert 2018b <sup>[[#fn:r913|913]]</sup> ; Hurlbert and Mussetta 2016 <sup>[[#fn:r914|914]]</sup> ; Hurlbert and Pittman 2014 <sup>[[#fn:r915|915]]</sup> ; Hurlbert and Montana 2015 <sup>[[#fn:r916|916]]</sup> ; Hurlbert 2015a <sup>[[#fn:r917|917]]</sup> ; Hurlbert and Gupta 2018 <sup>[[#fn:r918|918]]</sup> ). Similarly, in relation to flood, the mix of policy instruments including flood zone mapping, land-use planning, flood zone building restrictions, business and crop insurance, disaster assistance payments, preventative instruments, such as environmental farm planning (including soil and water management (Chapter 6)) and farm infrastructure projects, and recovery from debilitating flood losses, ultimately through bankruptcy, are effective at responding to flood (Hurlbert 2018a) (see Case study: Flood and flood security in Section 7.6.3).

In respect of land conservation and management goals, consideration of differing strengths and weakness of instruments is necessary. While direct regulation may secure effective minimum standards of biodiversity conservation and critical ES provision, economic instruments may achieve reduced compliance costs as costs are borne by policy addressees (Rogge and Reichardt 2016) <sup>[[#fn:r919|919]]</sup> . In relation to GHG emissions and climate mitigation, a comprehensive mix of instruments targeted at emissions reductions, learning, and R&amp;D is effective ( ''high confidence'' ) (Fischer and Newell 2008 <sup>[[#fn:r920|920]]</sup> ). The policy coherence between climate policy and public financeis critical in ensuring the efficiency, effectiveness and equity of mitigation policy, and ultimately to make stringent mitigation policy more feasible (Siegmeier et al. 2018 <sup>[[#fn:r921|921]]</sup> ). Recycling carbon tax revenue to support clean energy technologies can decrease losses from unilateral carbon mitigation targets, with complementary technology polices (Corradini et al. 2018 <sup>[[#fn:r922|922]]</sup> ).

When evaluating a new policy instrument, its design in relation to achieving an environmental goal or solving a land and climate change issue, includes consideration of how the new instrument will interact with existing instruments operating at multiple levels (international, regional, national, sub-national, and local) (Ring and Schröter-Schlaack 2011 <sup>[[#fn:r923|923]]</sup> ) (Section 7.4.1).

<span id="barriers-to-implementing-policy-responses"></span>
=== 7.4.9 Barriers to implementing policy responses ===

<div id="section-7-4-9-barriers-to-implementing-policy-responses-block-1"></div>

There are barriers to implementing the policy instruments that arise in response to the risks from climate-land interactions. Such barriers to climate action help determine the degree to which society can achieve its sustainable development objectives (Dow et al. 2013 <sup>[[#fn:r924|924]]</sup> ; Langholtz et al. 2014 <sup>[[#fn:r925|925]]</sup> ; Klein et al. 2015 <sup>[[#fn:r926|926]]</sup> ). However, some policies can also be seen as being designed specifically to overcome barriers, while some cases may actually create or strengthen barriers to climate action (Foudi and Erdlenbruch 2012 <sup>[[#fn:r927|927]]</sup> ; Linnerooth-Bayer and Hochrainer-Stigler 2015 <sup>[[#fn:r928|928]]</sup> ). The concept of barriers to climate action is used here in a sense close to that of ‘soft limits’ to adaptation (Klein, et al. 2014 <sup>[[#fn:r929|929]]</sup> ). ‘Hard limits’ by contrast are seen as primarily biophysical. Predicted changes in the key factors of crop growth and productivity – temperature, water, and soil quality – are expected to pose limits to adaptation in ways that affect the world population’s ability to get enough food in the future (Altieri et al. 2015 <sup>[[#fn:r930|930]]</sup> ; Altieri and Nicholls 2017 <sup>[[#fn:r931|931]]</sup> ).

This section assesses research on barriers specific to policy implementation in adaptation and mitigation respectively, then addresses the cross-cutting issue of inequality as a barrier to climate action, including the particular cases of corruption and elite capture, before assessing how policies on climate and land can be used to overcome barriers.

<div id="section-7-4-9-1-barriers-to-adaptation"></div>

<span id="barriers-to-adaptation"></span>
==== 7.4.9.1 Barriers to adaptation ====

<div id="section-7-4-9-1-barriers-to-adaptation-block-1"></div>

There are human, social, economic, and institutional barriers to adaptation to land-climate challenges as described in Table 7.4 ( ''medium evidence, high agreement'' ). Considerable literature exists around changing behaviours through response options targeting social and cultural barriers (Rosin 2013 <sup>[[#fn:r932|932]]</sup> ; Eakin 2016 <sup>[[#fn:r933|933]]</sup> ; Marshall et al. 2012 <sup>[[#fn:r934|934]]</sup> ) (Chapter 6).

Since the publication of the IPCC’s Fifth Assessment Report (AR5) (IPCC 2014), research is emerging, examining the role of governance, institutions and (in particular) policy instruments, in creating or overcoming barriers to adaptation to land and climate change in the land-use sector (Foudi and Erdlenbruch 2012 <sup>[[#fn:r935|935]]</sup> ; Linnerooth-Bayer and Hochrainer-Stigler 2015 <sup>[[#fn:r936|936]]</sup> ). Evidence shows that understanding the local context and targeted approaches are generally most successful (Rauken et al. 2014 <sup>[[#fn:r937|937]]</sup> ). Understanding the nature of constraints to adaptation is critical in determining how barriers may be overcome. Formal institutions (rules, laws, policies) and informal institutions (social and cultural norms and shared understandings) can be barriers and enablers of climate adaptation (Jantarasami et al. 2010 <sup>[[#fn:r938|938]]</sup> ).

Governments play a key role in intervening and confronting existing barriers by changing legislation, adopting policy instruments, providing additional resources, and building institutions and knowledge exchange (Ford and Pearce 2010 <sup>[[#fn:r939|939]]</sup> ; Measham et al. 2011 <sup>[[#fn:r940|940]]</sup> ; Mozumder et al. 2011 <sup>[[#fn:r941|941]]</sup> ; Storbjörk 2010 <sup>[[#fn:r942|942]]</sup> ). Understanding institutional barriers is important in addressing barriers ( ''high confidence'' ). Institutional barriers may exist due to the path-dependent nature of institutions governing natural resources and public good, bureaucratic structures that undermine horizontal and vertical integration (Section 7.6.2), and lack of policy coherence (Section 7.4.8).

<div id="section-7-4-9-1-barriers-to-adaptation-block-2"></div>

<span id="table-7.4"></span>
<!-- START TABLE -->
'''Table 7.4'''

<span id="soft-barriers-and-limits-to-adaptation."></span>
'''Soft barriers and limits to adaptation.'''

<!-- TABLE -->
{| class="wikitable"
|-

Category

Description

References

|-

Human

– Cognitive and behavioural obstacles – Lack of knowledge and information

Hornsey et al. 2016; Prokopy et al. 2015; Wreford et al. 2017

|-

Social

– Undermined participation in decision-making and social equity

Burton et al. 2008; Laube et al. 2012

|-

Economic

– Market failures and missing markets: transaction costs and political economy; ethical and distributional issues

– Perverse incentives<br />
– Lack of domestic funds; inability to access international funds

Chambwera et al. 2014b; Wreford et al. 2017; Rochecouste et al. 2015; Baumgart-Getz et al. 2012

|-

Institutional

– Mal-coordination of policies and response options; unclear responsibility of actors and leadership; misuse of power; all reducing social learning

– Government failures<br />
– Path-dependent institutions

Oberlack 2017; Sánchez et al. 2016; Greiner and Gregg 2011

|-

Technological

– Systems of mixed crop and livestock – Polycultures

Nalau and Handmer 2015

|}
<!-- END TABLE -->

<div id="section-7-4-9-2-barriers-to-land-based-climate-mitigation"></div>

<span id="barriers-to-land-based-climate-mitigation"></span>
==== 7.4.9.2 Barriers to land-based climate mitigation ====

<div id="section-7-4-9-2-barriers-to-land-based-climate-mitigation-block-1"></div>

Barriers to land-based mitigation relate to full understanding of the permanence of carbon sequestration in soils or terrestrial biomass, the additionality of this storage, its impact on production and production shifts to other regions, measurement and monitoring systems and costs (Smith et al. 2007 <sup>[[#fn:r943|943]]</sup> ). Agricultural producers are more willing to expand mitigation measures already employed (including efficient and effective management of fertiliser, including manure and slurry) and less favourable to those not employed, such as using dietary additives, adopting genetically improved animals, or covering slurry tanks and lagoons (Feliciano et al. 2014 <sup>[[#fn:r944|944]]</sup> ). Barriers identified in land- based mitigation include physical environmental constraints such as lack of information, education, and suitability for size and location of farm. For instance, precision agriculture is not viewed as efficient in small-scale farming (Feliciano et al. 2014 <sup>[[#fn:r945|945]]</sup> ).

Property rights may be a barrier when there is no clear single- party land ownership to implement and manage changes (Smith et al. 2007 <sup>[[#fn:r946|946]]</sup> ). In forestry, tenure arrangements may not distribute obligations and incentives for carbon sequestration effectively between public management agencies and private agents with forest licences. Including carbon in tenure and expanding the duration of tenure may provide stronger incentive for tenure holders to manage carbon as well as timber values (Williamson and Nelson 2017 <sup>[[#fn:r947|947]]</sup> ). Effective policy will require answers as to the current status of agriculture in regard to GHG emissions, the degree that emissions are to change, the best pathway to achieve the change, and an ability to know when the target level of change is achieved (Smith et al. 2007 <sup>[[#fn:r948|948]]</sup> ). Forest governance may not have the structure to advance mitigation and adaptation. Currently top-down traditional modes do not have the flexibility or responsiveness to deal with the complex, dynamic, spatially diverse, and uncertain features of climate change (Timberlake and Schultz 2017 <sup>[[#fn:r949|949]]</sup> ; Williamson and Nelson 2017 <sup>[[#fn:r950|950]]</sup> ).

In respect of forest mitigation, two main institutional barriers have been found to predominate. First, forest management institutions do not consider climate change to the degree necessary for enabling effective climate response, and do not link adaptation and mitigation. Second, institutional barriers exist if institutions are not forward looking, do not enable collaborative adaptive management, do not promote flexible approaches that are reversible as new information becomes available, do not promote learning and allow for diversity of approaches that can be tailored to different local circumstances (Williamson and Nelson 2017 <sup>[[#fn:r951|951]]</sup> ).

Land-based climate mitigation through expansions and enhancements in agriculture, forestry and bioenergy has great potential but also poses great risks; its success will therefore require improved land- use planning, strong governance frameworks and coherent and consistent policies. ‘Progressive developments in governance of land and modernisation of agriculture and livestock and effective sustainability frameworks can help realise large parts of the technical bioenergy potential with low associated GHG emissions’ (Smith et al. 2014b, p. 97 <sup>[[#fn:r952|952]]</sup> ).

<div id="section-7-4-9-3-inequality"></div>

<span id="inequality"></span>
==== 7.4.9.3 Inequality ====

<div id="section-7-4-9-3-inequality-block-1"></div>

There is ''medium evidence'' and ''high agreement'' that one of the greatest challenges for land-based adaptation and SLM is posed by inequalities that influence vulnerability and coping and adaptive capacity – including age, gender, wealth, knowledge, access to resources and power (Kunreuther et al. 2014 <sup>[[#fn:r953|953]]</sup> ; IPCC 2012 <sup>[[#fn:r954|954]]</sup> ; Olsson et al. 2014 <sup>[[#fn:r955|955]]</sup> ). Gender is the dimension of inequality that has been the focus of most research, while research demonstrating differential impacts, vulnerability and adaptive capacity based on age, ethnicity and indigeneity is less well developed (Olsson et al. 2015a <sup>[[#fn:r956|956]]</sup> ). Cross-Chapter Box 11 in Chapter 7 sets out both the contribution of gender relations to differential vulnerability and available policy instruments for greater gender inclusivity.

One response to the vulnerability of poor people and other categories differentially affected is effective and reliable social safety nets (Jones and Hiller 2017 <sup>[[#fn:r957|957]]</sup> ). Social protection coverage is low across the world and informal support systems continue to be the key means of protection for a majority of the rural poor and vulnerable (Stavropoulou et al. 2017 <sup>[[#fn:r958|958]]</sup> ) (Section 7.4.2). However, there is a gap in knowledge in understanding both positive and negative synergies between formal and informal systems of social protection and how local support institutions might be used to implement more formal forms of social protection (Stavropoulou et al. 2017 <sup>[[#fn:r959|959]]</sup> ).

<div id="section-7-4-9-4-corruption-and-elite-capture"></div>

<span id="corruption-and-elite-capture"></span>
==== 7.4.9.4 Corruption and elite capture ====

<div id="section-7-4-9-4-corruption-and-elite-capture-block-1"></div>

Inequalities of wealth and power can allow processes of corruption and elite capture (where public resources are used for the benefit of a few individuals in detriment to the larger populations) which can affect both adaptation and mitigation actions, at levels from the local to the global that, in turn, risk creating inequitable or unjust outcomes (Sovacool 2018 <sup>[[#fn:r960|960]]</sup> ) ( ''limited evidence, medium agreement'' ). This includes risks of corruption in REDD+ processes (Sheng et al. 2016 <sup>[[#fn:r961|961]]</sup> ; Williams and Dupuy 2018 <sup>[[#fn:r962|962]]</sup> ) and of corruption or elite capture in broader forest governance (Sundström 2016 <sup>[[#fn:r963|963]]</sup> ; Persha and Andersson 2014 <sup>[[#fn:r964|964]]</sup> ), as well as elite capture of benefits from planned adaptation at a local level (Sovacool 2018 <sup>[[#fn:r965|965]]</sup> ).

Peer-reviewed empirical studies that focus on corruption in climate finance and interventions, particularly at a local level, are rare, due in part to the obvious difficulties of researching illegal and clandestine activity (Fadairo et al. 2017 <sup>[[#fn:r966|966]]</sup> ). At the country level, historical levels of corruption are shown to affect current climate polices and global cooperation (Fredriksson and Neumayer 2016 <sup>[[#fn:r967|967]]</sup> ). Brown (2010) <sup>[[#fn:r968|968]]</sup> sees three likely inlets of corruption into REDD+: in the setting of forest baselines, the reconciliation of project and natural credits, and the implementation of control of illegal logging. The transnational and north-south dimensions of corruption are highlighted by debates on which US legislative instruments (e.g., the Lacey Act, the Foreign Corrupt Practices Act) could be used to prosecute the northern corporations that are involved in illegal logging (Gordon 2016 <sup>[[#fn:r969|969]]</sup> ; Waite 2011 <sup>[[#fn:r970|970]]</sup> ).

Fadairo et al. (2017) <sup>[[#fn:r971|971]]</sup> carried out a structured survey of perceptions of households in forest-edge communities served by REDD+, as well as those of local officials, in south eastern Nigeria. They report high rates of agreement that allocation of carbon rights is opaque and uncertain, distribution of benefits is untimely, uncertain and unpredictable, and the REDD+ decision-making process is vulnerable to political interference that benefits powerful individuals. Only 35% of respondents had an overall perception of transparency in REDD+ process as ‘good’. Of eight institutional processes or facilities previously identified by the government of Nigeria and international agencies as indicators of commitment to transparent and equitable governance, only three were evident in the local REDD+ office as ‘very functional’ or ‘fairly functional’.

At the local level, the risks of corruption and elite capture of the benefits of climate action are high in decentralised regimes (Persha and Andersson 2014 <sup>[[#fn:r972|972]]</sup> ). Rahman (2018) discusses elicitation of bribes (by local-level government staff) and extortion (by criminals) to allow poor rural people to gather forest products. The results are a general undermining of households’ adaptive capacity and perverse incentives to over-exploit forests once bribes have been paid, leading to over-extraction and biodiversity loss. Where there are pre-existing inequalities and conflict, participation processes need careful management and firm external agency to achieve genuine transformation and avoid elite capture (Rigon 2014 <sup>[[#fn:r973|973]]</sup> ). An illustration of the range of types of elite capture is given by Sovacool (2018) <sup>[[#fn:r974|974]]</sup> for adaptation initiatives including coastal afforestation, combining document review and key informant interviews in Bangladesh, with an analytical approach from political ecology. Four processes are discussed: enclosure, including land grabbing and preventing the poor establishing new land rights; exclusion of the poor from decision-making over adaptation; encroachment on the resources of the poor by new adaptation infrastructure; and entrenchment of community disempowerment through patronage. The article notes that observing these processes does not imply they are always present, nor that adaptation efforts should be abandoned.

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==== 7.4.9.5 Overcoming barriers ====

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Policy instruments that strengthen agricultural producer assets or capital reduce vulnerability and overcome barriers to adaptation (Hurlbert 2018b, 2015b <sup>[[#fn:r975|975]]</sup> ). Additional factors like formal education and knowledge of traditional farming systems, secure tenure rights, access to electricity and social institutions in rice-farming areas of Bangladesh have played a positive role in reducing adaptation barriers (Alam 2015 <sup>[[#fn:r976|976]]</sup> ). A review of more than 168 publications over 15 years about adaptation of water resources for irrigation in Europe found the highest potential for action is in improving adaptive capacity and responding to changes in water demands, in conjunction with alterations in current water policy, farm extension training, and viable financial instruments (Iglesias and Garrote 2015 <sup>[[#fn:r977|977]]</sup> ). Research on the Great Barrier Reef, the Olifants River in Southern Africa, and fisheries in Europe, North America, and the Antarctic Ocean, suggests that the leading factor in harnessing the adaptive capacity of ecosystems is to reduce human stressors by enabling actors to collaborate across diverse interests, institutional settings, and sectors (Biggs et al. 2017 <sup>[[#fn:r978|978]]</sup> ; Schultz et al. 2015 <sup>[[#fn:r979|979]]</sup> ; Johnson and Becker 2015 <sup>[[#fn:r980|980]]</sup> ). Fostering equity and participation are correlated with the efficacy of local adaptation to secure food and livelihood security (Laube et al. 2012 <sup>[[#fn:r981|981]]</sup> ). In this chapter, we examine the literature surrounding appropriate policy instruments, decision-making, and governance practices to overcome limits and barriers to adaptation.

Incremental adaptation consists of actions where the central aim is to maintain the essence and integrity of a system or process at a given site, whereas transformational adaptation changes the fundamental attributes of a system in response to climate and its effects; the former is characterised as doing different things and the latter, doing things differently (Noble et al. 2014). Transformational adaptation is necessary in situations where there are hard limits to adaptation or it is desirable to address deficiencies in sustainability, adaptation, inclusive development and social equity (Kates et al. 2012 <sup>[[#fn:r982|982]]</sup> ; Mapfumo et al. 2016 <sup>[[#fn:r983|983]]</sup> ). In other situations, incremental changes may be sufficient (Hadarits et al. 2017 <sup>[[#fn:r984|984]]</sup> ).

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