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

==== 7.4.7.1 Financing mechanisms for land mitigation and adaptation ====

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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> ).

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