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This report describes the methodology used by the Climate Policy Initiative (CPI) to quantify and compare financial flows for land use with climate action components in Brazil for the period 2021-2023. It details the criteria for classifying finance into mitigation, adaptation, dual benefits, and loss and damage, while outlining the data sources and the 'Climate Finance Ecosystem' used to track public and private resources.

Climate finance for land use in Brazil averaged US$ 17.1 billion annually from 2021 to 2023, a 99% increase from the 2015-2020 period. Domestic sources provided 97% of these resources, with the private sector contributing 72% of domestic finance. Rural credit was the primary financial instrument, accounting for 58% of total flows. While crops received the most funding (74%), the native forest sector remained heavily dependent on the federal public budget and international public sources. Mitigation-focused finance dominated at 57% of total flows, while spending on climate losses and damages grew significantly, reaching US$ 2.0 billion by 2023.

The document outlines the methodological frameworks used to quantify climate finance needs for agrifood systems. It establishes a comprehensive taxonomy developed by CPI and FAO covering sectors such as crop and livestock systems, forestry, fisheries, and food diets. The 'top-down' approach aggregates data from 46 publications, using seven key reports to estimate needs for 2024-2030, while the 'bottom-up' approach extrapolates data from 167 Nationally Determined Contributions (NDCs). The analysis highlights significant data gaps for the post-2030 period and notes that agrifood system finance needs in low-income countries represent a larger relative proportion of their economy, averaging 2.7% of GDP.

The document analyzes the shift in Brazil's bioeconomy governance since 2023, highlighted by the creation of the National Bioeconomy Strategy and the National Bioeconomy Secretariat within the Ministry of Environment and Climate Change (MMA). It categorizes bioeconomy into three visions—biotechnological, bio-resources, and bio-ecological—noting that the current national strategy primarily aligns with the bio-ecological vision. The report details new regulatory frameworks such as the 'Fuel of the Future' law and various sustainable production programs, while mapping the transversal roles of multiple ministries (including MDIC, Fazenda, and MCTI) in coordinating the transition to a low-carbon economy.

Between 2021 and 2023, climate finance for land use in Brazil averaged US$ 17.1 billion per year, a 99% increase from the 2015-2020 period. Domestic sources provided 97% of these resources, with rural credit serving as the primary instrument (58% of total flows). While the crop sector was the largest recipient (74%), the native forest sector remained heavily dependent on the federal public budget. The report highlights a significant rise in 'loss and damage' spending due to extreme weather events and notes a sharp decline in the use of thematic bonds for land use after 2021.

Global climate finance reached USD 1.46 trillion in 2022, showing resilience despite global crises. While advanced economies saw steady growth driven by domestic policy and stimulus, emerging markets and developing economies (EMDEs) experienced inconsistent trends, with significant recoveries in sub-Saharan Africa and South Asia between 2020 and 2022. Private sector contributions to mitigation finance exceeded 50% in several EMDE regions, and finance to least developed countries (LDCs) more than doubled from 2018 to 2022.

The report finds that while agrarian reform settlements occupy only 8% of the Amazon biome, they accounted for 24% of forest loss in 2023. Deforestation is highly concentrated, with 5% of settlements responsible for 65% of the deforested area between 2017 and 2023. Evidence suggests that large-scale clearing is driven by external actors rather than resident settlers, as the scale of deforestation is incompatible with family farming. The report recommends that INCRA, IBAMA, and the Ministry of the Environment and Climate Change prioritize strategic interventions in these high-impact settlements and specific regional superintendencies, particularly those in Santarém, Amazonas, and Southern Pará.

This report, prepared by an Independent High-Level Expert Group (IHLEG) for the Brazilian G20 Presidency and the G20 Sustainable Finance Working Group, reviews the Vertical Climate and Environmental Funds (VCEFs). It assesses the current climate finance gap in emerging markets and developing economies (EMDEs) and provides a strategic framework to optimize VCEF operations and enhance their ability to mobilize sustainable finance.

The report analyzes the causal link between Amazon deforestation and reduced hydroelectric power generation in Brazil, utilizing case studies of the Teles Pires HPP and plants in the Paraná Basin to quantify energy and revenue losses.

The report finds that international development funding for clean air is chronically underfunded, representing only 1% of total international development funding in 2022. It highlights a heavy reliance on loans over grants, significant geographic disparities in funding distribution, and a concerning increase in funding for projects that prolong fossil fuel use.

The report finds that while agrarian reform settlements occupy only 8% of the Amazon biome, they accounted for 24% of its forest loss in 2023. Deforestation is highly concentrated, with 5% of settlements responsible for 65% of the loss in settled areas between 2017 and 2023. The analysis suggests that large-scale clearing is likely driven by external actors rather than smallholder farmers. Geographically, 63% of this deforestation is concentrated in three Incra Regional Superintendencies: Santarém, Sul do Pará, and Amazonas. The authors recommend that the Ministry of Environment and Climate Change (MMA), Ibama, and Incra implement focalized interventions in these priority settlements to enhance conservation.

The report details a systematic approach to quantifying 'bottom-up' climate finance needs—the capital countries state they require to meet national targets—as opposed to 'top-down' predictive models. CPI reviewed 168 NDCs, standardizing diverse data on currency, timeframes, and sector classifications using its Global Landscape of Climate Finance (GLCF) taxonomy. The methodology distinguishes between unconditional (domestic) and conditional (international) needs, while acknowledging significant data gaps, as less than half of the reviewed NDCs provided fully costed finance needs.

The report assesses the four Vertical Climate and Environmental Funds (VCEFs)—the Global Environment Facility (GEF), Adaptation Fund (AF), Climate Investment Funds (CIF), and Green Climate Fund (GCF)—concluding that while they provide essential concessional finance, they are fragmented and often inefficient. It proposes a 'process integration' approach to shift from individual projects to country-driven investment platforms, recommends harmonizing accreditation and reporting across funds, and suggests expanding the use of diverse financial instruments like guarantees and local currency lending to better catalyze private capital in emerging markets and developing economies.

The guide establishes 'Common Principles' for tracking green finance, emphasizing conservativeness and granularity. It details a three-step qualification process for adaptation finance and a whitelist-based approach for mitigation. It also introduces a methodology for biodiversity finance based on OECD Rio Markers and the Kunming-Montreal Global Biodiversity Framework, while addressing challenges like taxonomy misalignment and resource limitations within development finance institutions.

The guide establishes a standardized framework for tracking climate mitigation, adaptation, and biodiversity finance. It provides detailed lists of eligible activities for mitigation, a three-step validation process for adaptation, and specific criteria for biodiversity finance. The document emphasizes the use of ex-ante GHG emission reduction assessments and offers methodologies for quantifying finance through incremental or proportional approaches to ensure transparency and avoid double-counting.

The report finds that while agrarian reform settlements occupy only 8% of the Amazon biome, they accounted for 24% of its forest loss in 2023. Deforestation is highly concentrated, with 5% of settlements responsible for 65% of the deforested area between 2017 and 2023. Evidence suggests that forest loss is driven by external actors rather than resident settlers, as 75% of vegetation loss in these areas involves plots larger than 6.25 hectares, a pattern inconsistent with small-scale family farming. The report highlights that three INCRA regional superintendencies—Santarém, Amazonas, and Southern Pará—account for 63% of deforestation in settled areas. It recommends that the Ministry of the Environment and Climate Change (MMA), IBAMA, and INCRA implement targeted action plans for these priority settlements to enhance conservation effectiveness.

The report analyzes the employment opportunities arising from Jharkhand's energy transition, projecting significant job growth in green molecules, clean power, and clean mobility. It presents two scenarios: an Ambitious Policy Scenario (APS) and an Accelerated Green Transition Scenario (AGTS), estimating that by 2030, the state could create between 392,742 and 630,096 total direct and indirect green jobs. The document emphasizes the need for private investment and specialized skilling to transition a workforce currently heavily reliant on the solid fossil fuel mining sector.

Climate finance for land use in Brazil averaged R$ 88.1 billion annually from 2021 to 2023, a 145% increase over the 2015-2020 period. Domestic sources provided 97% of these funds, with rural credit serving as the primary instrument (58% of total flows). While mitigation remains the dominant climate use (57%), there was a significant surge in 'loss and damage' payments, which grew 357% between 2021 and 2023 due to government indemnities for extreme weather events. The report highlights a heavy reliance on self-declared sustainable practices in rural credit and a decline in thematic bonds, while noting the critical role of the federal budget in supporting native forests.

Global climate finance more than doubled between 2018 and 2022, reaching USD 1.46 trillion in 2022, yet remains far below the USD 7.4 trillion annual average needed by 2030 for a 1.5°C scenario. Mitigation finance dominates the landscape, driven by renewable energy and electric vehicles in advanced economies and China, while adaptation finance, though growing, remains severely underfunded, particularly for Least Developed Countries (LDCs) and Small Island Developing States (SIDS). The report highlights a critical imbalance, noting that fossil fuel subsidies reached USD 1.4 trillion in 2022, nearly equaling total climate finance. It recommends reforming the global financial architecture through increased concessional finance, risk mitigation, and the redirection of fossil fuel expenditures to close the investment gap.

In 2023, IDFC members committed $199 billion in green finance, a 31% decrease from 2022, largely due to currency depreciation in East Asia and the Pacific and the adoption of more conservative tracking methodologies. Climate finance dominated at 98% of total green finance, with mitigation accounting for 89% of that amount. Adaptation finance fell significantly to $10.5 billion, while biodiversity finance reached its lowest level since 2020 at $8.2 billion. The report emphasizes the role of public development banks (PDBs) in providing transformative finance and calls for the New Collective Quantified Goal on Climate Finance (NCQG) to integrate 'transformational criteria' to better catalyze private investment.