Paying for nature and society

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Innovation in financial mechanisms to support an inclusive, sustainable transition in agriculture

Finance is a key lever for turning agriculture from a potential source of environmental harm and social inequity to a driver of conservation and social inclusiveness. Private and public sector funding for farmers to combat climate change and protect and restore nature (‘Paying for Nature’) is rapidly increasing. Yet this new funding may not reach its aims without drastically improving farm-level reward mechanisms.

CoSAI commissioned a study from the SDG Center for Latin America and the Caribbean (CODS) at the Universidad de Los Andes (Bogota, Colombia) to look at the experience with different financial instruments on farms. CoSAI also worked with partners, in particular IUCN, to hold a series of public conversations with experts in this area.

Find out more in this CoSAI policy brief.

Actions needed

Public and private investors who want to deliver environmental outcomes should invest sufficient resources into innovating fair and effective farm payment mechanisms that support farmers to protect and restore nature and tackle climate change in agri-food systems of the Global South.
Investors should work with farmers, communities and local governments to innovate and monitor payments and payment mechanisms to ensure they are practical and relevant to local conditions and to jointly address policy constraints.
Investors should develop credible systems to monitor investment impact and ensure no one is left behind, for example rural workers with little or no land. Badly- designed payments can make the poor poorer.
Governments and international development partners need to invest sufficient public finance to reach public goals, including for financial innovation, technical assistance to farmers, and fixing underlying conditions for success such as land and subsidy policy.

The Paying for Nature and Society study provides a global review of financial innovation to support an inclusive sustainability transition in agri-food systems, with a focus on payments for ecosystem services, REDD+ and voluntary standards, as well as investment in sustainable agriculture projects. The report offers recommendations for designing, implementing and evaluating new instruments to address multiple goals for the environment, productivity and inclusion.

Read our policy brief to learn more.