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Operationalizing Climate Adaptation at the US International Development Finance Corporation The Case for an Agriculture-Led Agenda in Low-Income Countries

Operationalizing Climate Adaptation at the US International Development Finance Corporation: The Case for an Agriculture-Led Agenda in Low-Income Countries

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  • Creator / Author: Joan Addedis
  • Resource Type: Africa Capacity Report
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January, 2021

Basic Information
Creator / Author
Clemence Landers , Jocilyn Estes and Scott Morris
Source / Publisher
Center for Global Development
Number of Pages
12
Geographic & Audience Details
Classification & Domains
Subject
Climate change
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Abstract

The US International Development Finance Corporation (DFC) could be well placed to lead among development finance institutions (DFIs) on agriculture adaptation to climate change. With its mandate to support private investment in developing country markets, overcoming barriers to investment in agricultural adaptationwhere agricultural growth is an estimated two to four times more effective at reducing poverty than growth originating from other sectorsis exactly the type of activity DFC is intended to pursue. Yet, DFC is paradoxically prone to the same investment incentives and disincentives as private investors with an investment portfolio that tends to favor lower risk, higher deal size (and lower overhead) transactions. So, while global estimates for adaptation investments financing needs total close to $140-$300 billion by 2030, a fraction of the global mitigation needs measured in the trillions of dollars, the barriers to project level investment in agriculture adaptation and resilience raises the risk that DFC will continue to favor larger and lower risk mitigation investments in more established markets. This paper reviews DFCs agriculture portfolio, and based on this review, proposes elements of an agriculture strategy that can overcome barriers to adaptation and resilience investments in the most climate vulnerable markets.
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Keywords

low income countries
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