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Climate change is a major challenge for agriculture – a vital source of food, income and employment for most of the world’s poor.

Agricultural investments, as a result, need to become more climate sensitive. This is as true for general agricultural investments focused on development outcomes as it is for agricultural investments specifically addressing climate change adaptation and mitigation.

FAO recently unveiled a new knowledge product Making Climate-Sensitive Agricultural Investments – Approaches, tools and selected experiences containing practical reference material on integrating climate risk considerations at all stages of the investment project cycle, from design to implementation, monitoring and evaluation.

Produced by a multidisciplinary team from across FAO, the knowledge product builds on a 2012 FAO guidance document and draws on the most recent information and data sources, including the latest Intergovernmental Panel on Climate Change (IPCC) reports.

It showcases FAO-developed tools, tested approaches and selected experiences, while also discussing climate financing opportunities for agriculture.

The publication is particularly geared to investment practitioners from national governments and technical agencies, international financing institutions and development organizations.

Kanta Kumari Rigaud, the World Bank’s Lead Environment Specialist who led the Bank’s Next Generation Africa Climate Business Plan, noted in her review of this publication that “with food insecurity mounting in the face of climate change, the need for ‘hands-on’ and practical advice for teams to integrate climate change in an informed manner is a necessity.” 

She further acknowledged that the selected case studies were particularly useful “as practitioners are increasingly confronted with an abundance of tools and not enough demonstration on how to use them and, equally importantly, how to drive improvements in the narrative and the design of projects.” 

Tools, approaches and experiences

This new knowledge product is organized as a compendium of modules and thematic sections.

Module 1 looks at the linkages between climate, agriculture and food security and the role that climate-sensitive investments play in addressing climate-related challenges in the sector.

Module 2 describes tools and approaches for integrating climate risk considerations into project design, appraisal and implementation, as well as strategic investment planning.

Module 3 provides a set of technical and sector-specific notes illustrating relevant practical applications and good practices, while Module 4 gives an overview of the growing stream of climate financing opportunities, like the Green Climate Fund.

The knowledge product’s case studies focus on agricultural subsectors such as crop production, livestock, irrigation, aquaculture and forestry.

And the resource features a range of tested FAO instruments, including the Ex-Ante Carbon Balance Tool (EX-ACT), the Global Livestock Environmental Assessment Model-interactive (GLEAM-i) and the Resilience Index Measurement Analysis methodology (RIMA), used to incorporate climate change in agricultural investment design and implementation.

Constant learning process

Agriculture is both a victim of and a contributor to climate change.

But agriculture can play an important role in helping countries adapt to and mitigate the negative impacts of climate change.

By adopting sustainable climate technologies and practices, farmers and agribusinesses can contribute to reduced emissions and a better use of natural resources.

FAO Investment Centre Senior Adviser Rimma Dankova, who coordinated the work on the publication, said the increase in resources available to support the climate change agenda in agriculture was encouraging.

“We need to make sure we are well-equipped to address climate change when it comes to agricultural investment and that investment resources are used in the most efficient way,” she said. 

“The challenge for us is to keep pace with new tools and approaches, which are under development non-stop, and to strengthen our expertise and skills in applying them. That is what we hoped to capture with this knowledge product. It is a constant learning process,” she added.

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Making climate-sensitive investments in agriculture: approaches, tools and selected experiences is published as part of the Investment Toolkits series under the FAO Investment Centre’s Knowledge for Investment (K4I) programme.