Three Tools to Unlock Finance for Land-Use Mitigation and Adaptation

The report argues that while land use generates approximately a quarter of global greenhouse gas emissions and is highly vulnerable to climate change, current financial flows are predominantly 'business-as-usual' (BAU). To address this, the authors introduce three tools: the Landscape of Land Use Finance, the Financial Viability Gap Analysis tool, and the Public Finance Mapping tool. These tools are designed to help low and middle-income countries identify financial blockages, assess the viability of green projects, and ensure policy coherence to scale up private sector investment in climate-resilient agriculture and forestry.

• Land-use sectors, including agriculture and forestry, are responsible for approximately 25% of global greenhouse gas emissions and are highly susceptible to climate change impacts.
• Current financial flows for land-use mitigation and adaptation are small compared to total land-use investments, with estimates for the former ranging from USD 1.3 billion to 51.8 billion annually.
• The majority of land-use finance is provided by domestic private actors and is largely 'business-as-usual' (BAU), meaning it does not mitigate or adapt to climate change and may even increase emissions.
• Three primary barriers impede the flow of finance to green land-use activities: viability gaps (where costs exceed revenues), risk gaps (technology, financial, political, and market risks), and information gaps (lack of knowledge or institutional capacity).
• The 'Landscape of Land Use Finance' tool provides a quantitative and qualitative snapshot of public and private investments to identify channels, gaps, and blockages in financial flows.
• The 'Financial Viability Gap Analysis' tool assesses the costs and revenues of specific activities to identify where public support—such as grants, concessional loans, or revenue support—is needed to make green projects viable for private investors.
• The 'Public Finance Mapping' tool allows governments to track public financial instruments and determine if they are supporting BAU or green activities, helping to identify incoherence in policy incentives.
• A case study of the Kalimantan Forests and Climate Partnership in Indonesia demonstrated that while peatland rehabilitation could generate annual returns between AUD 3.5 million and AUD 20 million, investors face significant risks regarding land tenure and taxation.
• The report defines 'green' activities as those with a GHG emissions profile below a defined baseline or benchmark, provided they address sustainability risks such as leakage, the rebound effect, and long-term lock-in.

APA

Falconer, A., Parker, C., Keenlyside, P., Dontenville, A., & Wilkinson, J. (2015). Three Tools to Unlock Finance for Land-Use Mitigation and Adaptation. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2015/07/Three-Tools-to-Unlock-Finance-for-Land-Use-Mitigation-and-Adaptation-Full-Report.pdf

Chicago

Falconer, Angela, Charlie Parker, Paul Keenlyside, Adeline Dontenville, and Jane Wilkinson. Three Tools to Unlock Finance for Land-Use Mitigation and Adaptation. Climate Policy Initiative, 2015. https://www.climatepolicyinitiative.org/wp-content/uploads/2015/07/Three-Tools-to-Unlock-Finance-for-Land-Use-Mitigation-and-Adaptation-Full-Report.pdf.

Wikipedia

{{cite report |last1=Falconer |first1=Angela |last2=Parker |first2=Charlie |last3=Keenlyside |first3=Paul |last4=Dontenville |first4=Adeline |last5=Wilkinson |first5=Jane |title=Three Tools to Unlock Finance for Land-Use Mitigation and Adaptation |publisher=Climate Policy Initiative |date=July 2015 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2015/07/Three-Tools-to-Unlock-Finance-for-Land-Use-Mitigation-and-Adaptation-Full-Report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{falconer2015three, author = {Falconer, Angela and Parker, Charlie and Keenlyside, Paul and Dontenville, Adeline and Wilkinson, Jane}, title = {{Three Tools to Unlock Finance for Land-Use Mitigation and Adaptation}}, institution = {Climate Policy Initiative}, year = {2015}, month = jul, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2015/07/Three-Tools-to-Unlock-Finance-for-Land-Use-Mitigation-and-Adaptation-Full-Report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }