Development finance in the land sector: tracking progress towards Paris

This report by the NewClimate Institute evaluates the role of Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) in transitioning the land sector toward Paris Agreement goals. It argues that current frameworks and strategies are insufficient, often prioritizing economic development and efficiency over transformative climate action, and identifies significant gaps in climate safeguards for projects in specific countries.

• The joint framework for Paris alignment used by Multilateral Development Banks (MDBs) is considered inadequate for the land sector because it relies too heavily on partner country policies, such as Nationally Determined Contributions (NDCs) and Long-Term Strategies (LTS), which are insufficient to meet Paris objectives. The report suggests using sectoral 1.5°C-aligned pathways instead. Furthermore, the proposed 'universally aligned list' includes activities like aquaculture, fishing, and non-ruminant livestock farming that the report argues should not be considered 'universally aligned' due to potential negative environmental and climate impacts.
• Current land sector strategies of MDBs and DFIs prioritize economic development and the support of agribusinesses over Paris alignment. While climate mitigation is mentioned, the focus is placed on efficiency gains rather than the transformative strategies required for the sector, leaving a gap in the vision of what a Paris-aligned land sector looks like.
• Analysis of DFI activities in Argentina, Egypt, and Viet Nam reveals that more than 50% of finance provided since 2015 lacked sufficient safeguards to address climate risks. High-risk projects often involve working capital for companies in deforestation risk areas or sectors like cattle, dairy, and first-generation biofuels, as well as commodities that drive deforestation due to poor value chain transparency. Unaddressed value chain risks represent over 80% of the finance flowing to these high-risk projects.
• The report recommends that DFIs improve their impact by developing ambitious sectoral strategies based on climate pathways, integrating these into country-specific strategies, and creating more stringent criteria for classifying economic activities. Additionally, it calls for improved safeguards to prevent the support of GHG-intensive industries and induced deforestation.

APA

NewClimate Institute (2022). Development finance in the land sector: tracking progress towards Paris. http://www.newclimate.org/resources/publications/development-finance-in-the-land-sector-tracking-progress-towards-paris

Chicago

NewClimate Institute. Development finance in the land sector: tracking progress towards Paris. 2022. http://www.newclimate.org/resources/publications/development-finance-in-the-land-sector-tracking-progress-towards-paris.

Wikipedia

{{cite report |author=NewClimate Institute |title=Development finance in the land sector: tracking progress towards Paris |date=6 December 2022 |url=http://www.newclimate.org/resources/publications/development-finance-in-the-land-sector-tracking-progress-towards-paris |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2022development, author = {{NewClimate Institute}}, title = {{Development finance in the land sector: tracking progress towards Paris}}, institution = {NewClimate Institute}, year = {2022}, month = dec, url = {http://www.newclimate.org/resources/publications/development-finance-in-the-land-sector-tracking-progress-towards-paris}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }