Sustainable Land Bonds

This report proposes Sustainable Land Bonds (SLBs) as a financial mechanism for tropical forest countries to secure low-cost, long-term capital from mainstream bond markets to transition toward sustainable, low-carbon land management and meet Paris Agreement commitments.

• Sustainable Land Bonds (SLBs) are sovereign debt instruments backed by the full faith and credit of the issuing country, designed to finance the transition of rural economies to a low-carbon footing. They differ from standard bonds by earmarking proceeds for sustainable land management and linking interest payments to a Results-Based Payment (RBP) agreement with a third party, which can potentially reduce the cost of borrowing to zero if emission reduction targets are met.
• Natural climate solutions, such as improved land management, are estimated to be capable of delivering 37% of the cost-effective CO2 mitigation required by 2030 to keep global warming below 2°C. This represents approximately 11.3 gigatonnes of CO2e per year, with one-third of this mitigation achievable at a cost under $10 per tCO2e.
• Tropical forest countries face a critical need to increase agricultural output without further converting ecosystems. The report identifies two primary strategies: utilizing abandoned land that was previously converted and increasing production intensity on currently used land, both of which require significant capital investment with long payback periods.
• The SLB model leverages existing results-based payment mechanisms used by entities like the World Bank's Forest Carbon Partnership Facility Fund and governments such as Norway, the UK, and Germany. The report suggests that early SLBs should focus on incentivizing reforestation and avoided deforestation at scale, using proxies like forest cover or wildfire incidence rather than getting bogged down in complex carbon reporting.
• Beyond carbon mitigation, SLBs are intended to catalyze a virtuous cycle of rural economic growth. By protecting environmental infrastructure, governments can improve soil fertility and water resources, which supports higher yields, increases rural incomes, and enhances GDP resilience against extreme weather events like storms and droughts.
• The report highlights the economic importance of agriculture in specific tropical nations: in Indonesia, it accounts for 15% of GDP, 41% of employment, and 26% of exports; in Brazil, it accounts for 6% of GDP, 15% of employment, and 40% of exports.

APA

Climate Bonds Initiative (2018). Sustainable Land Bonds. https://www.climatebonds.net/files/documents/publications/Sustainable_Land_Bonds_Report_2018.pdf

Chicago

Climate Bonds Initiative. Sustainable Land Bonds. 2018. https://www.climatebonds.net/files/documents/publications/Sustainable_Land_Bonds_Report_2018.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Sustainable Land Bonds |date=March 2018 |url=https://www.climatebonds.net/files/documents/publications/Sustainable_Land_Bonds_Report_2018.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2018sustainable, author = {{Climate Bonds Initiative}}, title = {{Sustainable Land Bonds}}, institution = {Climate Bonds Initiative}, year = {2018}, month = mar, url = {https://www.climatebonds.net/files/documents/publications/Sustainable_Land_Bonds_Report_2018.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }