Sustainable land bonds: how governments can finance climate commitments and strengthen rural economies.
When it comes to fighting climate change, cutting back on fossil fuels is not enough. It has become clear that without urgent changes to land management practices, particularly in tropical forest countries, it is not simple to attain the emissions reduction targets set out in the Paris Agreement and keep global temperature increases below 2°C. The good news is that research shows there are changes in the way land is being managed that can contribute 37% of the emissions reductions needed to help meet the Paris goals by 2030. Now, people may have a better understanding of the green technologies needed to achieve these reductions in land-based emissions today. The question remains, though, of how to finance such work. This is especially a challenge for many tropical forest countries that depend on continued growth of their rural economies and lack the resources to sustainably develop their land. Sustainable land bonds offer one possibility. This report, produced in partnership with the Climate Bonds Initiative, shows how tropical forest countries can use sustainable land bonds to access the capital they need to transition to sustainable, low-carbon land-management systems. By tapping into mainstream bond markets and matching those funds with results-based payment agreements for achieving emission targets, they can help deliver sustainable economies that meet the objectives laid out in the Paris Agreement and mitigate the impacts of a changing climate.