ADB Workshop: Green Financing and Natural Capital Investment Models
The Asian Development Bank (ADB) will host an in-person workshop on day 2 (November 17) of the Asia-Pacific Agri-Food Innovation Summit at 9am SGT.
Having announced that at least 75% of its projects will address climate change mitigation and adaptation by 2030 and committed to deliver $80 billion in climate finance cumulatively between 2019 and 2030, the ADB is hosting a workshop on “green financing and natural capital investment” live in Singapore. Broadcast to the international audience, the session will facilitate a high-level panel discussion between some of the most influential players in Asia’s agri-food industry, a Q&A and networking.
Speakers will join from:
Q&A with Martin Lemoine: What solutions can agribusiness offer to the global climate crisis?
Agriculture is central to the global climate crisis. While agriculture is essential to human survival, its contribution to greenhouse emissions also threatens human existence.
Studies have shown that climate change has reduced global agriculture productivity by 21% since 1961. It is further estimated that we would need $350 billion annually to transform our current agriculture practices to be greener and more resilient.
At the same time, food systems represent a third of total greenhouse gas emissions while utilizing 70% of freshwater resources and a major contributor to the planet’s biodiversity loss.
In this Q&A, Martin Lemoine, Head of ADB’s Private Sector Agribusiness Unit, outlines how agribusiness can offer solutions to the global climate crisis.
How can agriculture adapt to ongoing climate change?
Management of resources has always been key to agriculture production. The issue now is there are fewer and fewer resources available. At the very basic level, adaptation has been geared towards learning to do more with less or with greater efficiency.
Adaptation technology does not need to be new. Drip irrigation and greenhouses, for example, have already proven effective in managing limited resources and mitigating climate impacts. The hindrance is not the knowledge nor the available best practice. Rather, it is the investment in the infrastructure and training. Yet success stories like Akay Aromatics in India and Cambodia and Hasfarm in Vietam, the People’s Republic of China (PRC), and Indonesia can easily be replicated across the region.
In addition to helping agribusinesses to adopt climate-resilient technologies, ADB is partnering with companies to provide direct technical assistance to farmers. For example, an ADB technical assistance provided training in climate-smart agriculture practices, including water harvesting and soil management, to 20,000 smallholder coffee farmers that Olam International sources from in Indonesia, Papua New Guinea, Timor-Leste, and Vietnam.
What practices have shown promise in mitigating the impact of agriculture?
An effective way to reduce the climate impact of agriculture is to incorporate processes that not only limit greenhouse gas emissions but find sustainable ways to capture them.
Biogas digesters in livestock production can not only capture harmful methane gas but also create opportunities to benefit from this process by generating energy. Additionally, this significantly lowers the environmental impact, as waste does not get released or transported. Examples of working models of this approach are Saikexing and New Hope Liuhe in PRC.
Another effective practice is agroforestry, where growing tree and herbaceous plants alongside crops and livestock provides benefits to agriculture as well as the environment. Agroforestry is said to capture 7 times more carbon than monoculture plantation forestry. This form of land management also protects soil nutrients, prevents erosion and water evaporation, and provides shade, food, and timber to farmers. Annual prunings from agroforestry can be converted to biochar, which captures carbon and can be used as an organic input to improve soil moisture.
Combining the benefits of more efficient food production systems and the possibility to capture carbon in agricultural land and forests makes it possible to set the target for a carbon neutral agriculture in the medium term.
What are the other challenges faced by the agriculture value chain in Asia-Pacific?
Smallholder farmers dominate agriculture in Asia and the Pacific. 420 million of the world’s 570 million farmers are in Asia, with an average land holding of 0.5 hectare. Smallholder farmers produce 80% of the food consumed in the region. Despite their role in food security, they have always been vulnerable to climate and economic uncertainties. The global COVID-19 pandemic and its disruption to the agricultural value chain exacerbated these threats.
It is essential to safeguard the livelihoods of smallholder farmers by supporting the value chain that relies heavily on contract farming and smallholder farmer development and training. Throughout this challenging period, ADB and partners such as Olam International, New Hope Singapore, and Cisarua Mountain Dairy in Indonesia have tried to help through support for farmers to preserve their livelihoods and provide the foundation for a resilient recovery.
How can eating differently make a difference?
It can be as simple as making nutritious food more affordable. In India, Suguna has made great strides in making poultry an affordable source of animal protein that can reduce malnutrition. 31% of children in India are stunted and 53% of women are anaemic.
Other changes can come from a shift in what you choose to eat. Compared with meat, fish has a very low carbon footprint, which is one of the reasons ADB is actively pursuing sustainable aquaculture investments. Similarly, plant-based protein products, which will aim to replace animal proteins that have a higher carbon footprint, has been a response to the increasing desire of consumers to eat healthier, climate friendly food.
Large investments are required to develop plant-based protein value chains in Asia, including in farming and primary processing, not just new product development and marketing. Farming of beans must become as attractive to smallholder farmers in Asia as the rearing of livestock if the global food systems is to decrease its reliance on animal proteins.
How can greater circularity help preserve natural capital?
In addition to climate change, pollution and loss of biodiversity are significant costs of the existing food systems.
To preserve oceans and water resources, plastic pollution is an issue that needs to be tackled. ADB can help government and private sector companies to collect and recycle plastic waste. For example, ADB recently provided a blue loan to Indorama for PET bottles recycling in India, Indonesia, the Philippines, and Thailand.
To preserve soils, investments in alternatives to chemical fertilizers and regenerative agriculture should be supported. Nutrient recycling (compost, leaf mould, manure, etc.) can offset the need for conventional fertilizers. Enzymes produced by microbes can improve soil health and numerous promising biotechnology companies have invested this field.
Finally, restoration of natural forests, which are amongst the most powerful carbon sinks and a nest for biodiversity, should be pursued alongside investments in agroforestry, commercial forestry, and fruit tree plantations in non-forest areas. ADB is promoting the use of carbon credits and payments for ecosystem services by governments and donors. In particular, ADB’s natural capital lab – a virtual platform to be launched in the coming months – will help governments quantify the value of ecosystem services and design incentive mechanisms for farmers and agribusinesses to adopt more sustainable practices and help restore and preserve the region’s natural capital, while remaining economically viable.
Read more from ADB here and join the ‘Green Financing and Natural Capital Investment Models’ Workshop on November 17 at the Asia-Pacific Agri-Food Innovation Summit. RSVP when registering for the summit to let us know you are planning to attend.