Land-use
Finance Tool

Do you want to learn how to unlock finance for sustainable land use?

This Tool was developed by the EU REDD Facility and Climate Policy Initiative to help countries/jurisdictions and their partners better understand investments affecting forests at national and sub-national levels.

Tell me moreAccess the tool

Why analysing land-use finance can help countries meet their climate and forest goals

Protecting and regenerating forests, combined with sustainable agricultural practices and efficient land-use planning, could deliver up to 37% of emission reductions needed by 2030 to comply cost-effectively with the Paris Agreement on climate change.

The private sector and domestic budgets will have to provide most of the investment required for countries to achieve their climate and forest goals.

International public finance sources have provided an estimated USD 20 billion to support these goals since 2010. However, while these sources can be a key support, they cannot meet the scale of investment required.

In addition, investments from international public finance have made major contributions to activities that could be driving deforestation and increasing emissions.

Tropical forest countries can struggle to mainstream climate objectives within sectoral policies and balance competing development priorities. When this is the case, investments that impact forests and land use are often uncoordinated or incoherent. This is a barrier to the implementation of climate and sustainability objectives.

Countries can help attract private finance and make the case for more international support by presenting a transparent analysis of land-use investments, as well as plans to increase the coherence of spending.

Our Land-use Finance Tool can help!

What is the Land-use Finance Tool?

In short: The Land-use Finance Tool is a diagnostic tool that enables a quantitative and qualitative analysis of the alignment of public and private spending with climate and forest objectives.

In detail: Finance mapping derives from traditional budget review approaches but seeks to offer additional insights to inform policy development. The analytical focus used is a quantitative and qualitative analysis of the life cycle of financial flows related to land use in selected sectors. The Tool is a set of guidelines, templates and training materials to assist the analysis of the life cycle of financial flows, as illustrated in the diagram below:

The Tool can help answer questions such as:

  • What is the volume and nature of past and current investments supporting forest and climate objectives?

  • What is the volume and nature of investments driving deforestation and forest degradation? In which sectors?

  • Who are the main actors involved in financing land-use sectors?

  • What are the main funding gaps and barriers to investment in sustainable land use?

  • What are the key financial opportunities and priorities to support sustainable land use?

  • How could investments be better aligned to climate and forest objectives?

  • How has spending for REDD+ evolved over time?

  • Do current levels of climate finance meet the country’s climate and forest ambitions?

The Tool builds on several years of work conducted by Climate Policy Initiative on mapping financial flows at global level. Côte d’Ivoire, Papua New Guinea and Vietnam have recently tested this approach with a specific land-use focus.

How does the Tool help unlock finance for sustainable land-use?

The Tool builds the capacity of national stakeholders to analyse land-use finance and develop investment strategies, funding proposals and public-private partnerships.

Main functions

Planning

It can support resource mobilisation for forest and climate objectives by analysing spending, clarifying sources of finance and identifying gaps and barriers.

Aligning

It can help ensure that land-use spending is coherent with forest and climate objectives.

Monitoring

It can be used to generate baseline information, monitor mobilisation or redirection of resources, and increase transparency and accountability.

Steps

The analytical steps involved in tracking land-use finance are broadly summarised in the figure below. These steps might vary according to the specific objectives and scope of the analysis. The Tool offers detailed guidance on framing the study.

Tool

You can download the complete guidelines of the Land-use Finance Tool, which consists of eight modules.

Below is a short description of the modules, including a link to each module and the related editable templates.

Scoping the mapping exercise

This module explains how to develop a ‘vision’ for the exercise of mapping land-use finance: to define objective, outputs and the potential scope of the analysis. Ultimately to develop a project plan.

Stakeholder engagement

This module illustrates how to develop an idea about who to involve and consult, why and how often.

Defining sustainable land use

This module is designed to understand the options and key aspects for consideration when building a land-use finance definition and typology.

Setting the mapping framework

This module will help the reader to confirm the final scope of the analysis, and to develop a first qualitative sketch of the finance mapping for consultation with experts to refine data collection needs.

Data collection

This module explains how to collect quantitative and qualitative data to fill out the mapping framework and gaps.

Data consolidation for analysis

This module will enable the reader to consolidate and classify quantitative data to construct a database against the land-use finance definition.

Data analysis and presentation

This module will assist the reader in understanding the options to create different output formats, for example Sankey diagram, pie charts, and tables for the qualitatively and quantitatively analysis.

Data interpretation: using the results

This module clarifies how best to use results to feed into objectives and inform policy or project processes.

Training

Training resources will progressively be made available to support interested users of the Land-use Finance Tool.

Below you can watch a recording of an introductory webinar to the Land-use Finance Tool, view the slides and get the answers to some FAQ.

Webinar

Join Climate Policy Initiative and the EU REDD Facility for an introduction to the Land-use Finance Tool. Webinar – Mapping finance to achieve forest and climate objectives.

FAQ

Our FAQ section answers some of the most common questions about the Land-use Finance Tool. Don’t hesitate to contact us through our contact form if you would like to learn more about the Tool.

How to initiate a land-use finance mapping?

  1. Watch our introductory webinar.
  2. Take a look at the Tool guidelines and templates available on www.landusefinance.org
  3. Define the objectives of the mapping and develop a first outline of the scope of analysis. Careful scoping will save time and resources (see Module 1).
  4. Identify relevant partners. You should define who should be engaged, why, when and how, in light of the envisaged scope and data to be collected (see Module 2).

Can I get support to use the Tool?

This open source Tool is standardised to allow countries to carry out the mapping analysis themselves or with limited support. The guidelines and templates are freely available on the website in three languages (English, French and Spanish). In the near future, additional training material will be available online.

The EU REDD Facility has limited resources to provide technical backstopping to countries in their use of the Tool. However, we support a community of practice, extract lessons from experiences and provide selected training. We will also improve the Tool over time to support users and allow them to perform the mapping analysis themselves.

What resources do I need to use the Tool?

The resources required vary greatly depending on the scope of the mapping and sectors considered, and the ease of data collection and stakeholder engagement. On average, a mapping exercise takes about 9-15 months to complete.

The team’s size depends on its members’ skill set, as well as the level of buy-in and involvement of key stakeholders who can help access and interpret data. Some key data sources, such as government ministries, may require allocation of dedicated internal staff to assist in the work. See Module 1 for more information on required resources.

Can the Tool map private land-use finance flows?

Tracking private finance remains a challenge for most countries as private finance data is heavily fragmented. You can use bottom-up approaches to data collection, but collection and aggregation of information is time-consuming and challenging. It might be advisable to narrow the sectoral or actor scope. You can also use proxies to estimate investment flows. See Module 5 for insights on approaches to collect private finance data.

Stay tuned for more guidance on approaches to collect private data and information.

Why map flows of finance supporting unsustainable activities?

Tracking climate-aligned land-use activities can improve the overall understanding of the scale of finance planned or delivered to reduce emissions from deforestation and forest degradation. However, mapping finance flows that are potentially driving deforestation and/or forest degradation can be very helpful. It will enable you to identify opportunities to redirect existing finance flows to achieve forest or climate-related objectives and ensure greater policy coherence. See Module 8 for more information on how you can use these results.

How are financial flows classified as aligned, conditionally aligned and/or non-aligned with climate and forest objectives?

The land-use finance mapping can include any (or all) of these suggested categories based on the objective of the analysis. The typology of land-use activities is developed nationally to reflect the country context – it is not a standard approach. That is why one activity can be considered as aligned in one country, and not aligned in another. The typology should be based on consensus among land-use stakeholders. Module 2 provides details on stakeholder engagement and Module 3 explains the different steps to build a typology.

How to engage all actors, even the most reluctant?

Broad stakeholder engagement is crucial to ensure data access as well as ownership of the results of the study. Reasons to engage will vary among actors. It is important to identify incentives for each category of stakeholders as part of the stakeholder engagement plan (see Module 2). For example, sectoral ministries might want to make the case for additional budget by demonstrating the need for more climate and forest-related finance. The Ministry of Finance may want to increase its financial accountability or its efficiency. Actors in sectors driving deforestation might be the most reluctant at first, but such analysis could also be an opportunity to value their efforts or make the case for greater investment in greening their interventions.

How to ensure data confidentiality?

Concerns about confidentiality of data can be a barrier to accessing data for land-use finance mapping. For reasons of data confidentiality and sensitivity, only aggregate data that is shared in public reports and infographics, and after it has been validated by data sources. Non-disclosure agreements can be signed with specific data sources if needed.

How can a land-use finance mapping exercise support policy change?

The mapping of land-use finance can identify which finance flows are aligned, conditionally-aligned or not aligned with climate and forest objectives. By identifying gaps and barriers to sustainable investments, land-use finance mapping can inform policies aimed at mobilising additional resources and creating incentives for forest and climate-friendly investments. By identifying and quantifying financial flows potentially driving deforestation, land-use finance mapping can serve as a basis for cross-sectoral coordination and the mainstreaming of forest and climate objectives in relevant sectoral policies. For example, results from land-use finance mapping in Côte d’Ivoire served as a basis for the Ministry of Planning’s efforts to mainstream forest safeguards in budget programming.

Module 8 offers an overview of how results can be used.

Can the Tool be used for periodic tracking?

Periodic tracking helps improve accountability and build trust with partners. Monitoring of financial flows over time can also provide useful input to regular international reporting requirements. If you plan to undertake frequent land-use finance mapping, you should pay specific attention to developing mechanisms that can ease periodic data collection, such as budget tagging or relevant domestic reporting approaches. You should also build a robust database or information system that can efficiently consolidate data over time.

Can I link finance flows to an emission reduction or increase, or to a real impact?

Yes, if you can collect sufficiently detailed data or proxies to inform such a link. Most land-use finance mapping exercises have been limited to characterising financial flows with respect to their intended outcomes, as described in project documents. Additional information on the impact and final beneficiaries of specific projects or budget lines (such as from evaluation reports) can be used if available. However, this additional information may only become available a few years after project spending.

What are the main challenges in mapping land-use finance?

Data availability, access and quality are usually the main challenges. Data collection is time-consuming and a sufficient level of detail is essential for creating a representative and coherent image of the situation. However, the Land-use Finance Tool does not aim to generate a perfectly accurate picture. Rather, it identifies trends and priorities for action in order to incentivise or influence policy and investment flows.

Can I use the Tool to map finance in other sectors?

Climate Policy Initiative (CPI) originally developed finance mapping to track global financial commitments to climate action. The approach has since been adapted and further developed to support countries and jurisdictions in understanding their financial landscape in selected sectors of interest. Some countries, like Indonesia, have mapped climate finance across all sectors of the economy.

This Tool provides guidance that is specific to land-use objectives and related sectors to support countries’ efforts towards their forest and climate objectives.

How can I produce a Sankey diagram?

Module 7 provides detailed guidelines on the approach to build a robust database, which you can use to generate visualisation products such as a Sankey diagram. It also provides examples of software that you can access to generate such outputs.

Would you like to receive more information?

The EU REDD Facility and Climate Policy Initiative will organise training events and webinars for tropical country practitioners and their partners in 2019. To find out more, please complete the form so we can understand your needs and inform you about the release of material and training opportunities.

Are you interested in online or in-person training events about the Land-use Finance Tool?

Contact

For more information on the Tool, please contact:

Adeline Dontenville, EU REDD Facility, adeline.dontenville@efi.int

Angela Falconer, Climate Policy Initiative, angela.falconer@cpiclimatefinance.org

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About the Land-use Finance Tool

The EU REDD Facility and Climate Policy Initiative have developed a Tool to help countries/jurisdictions and their partners to better understand investments affecting forests at national and sub-national levels. The Tool includes guidelines, templates and training to analyse the life cycle of financial flows related to land-use.

Disclaimer

This website was produced with the assistance of the European Union and the Governments of France, Germany, Ireland, the Netherlands, Spain and the United Kingdom. The contents of this website are the sole responsibility of the EU REDD Facility and Climate Policy Initiative and can under no circumstances be regarded as reflecting the position of funding organisations.

All the content on this page is protected by a Creative Commons license: CC BY-NC-ND. Credit information: EU REDD Facility and Climate Policy Initiative, linking back to the original source of the work, www.landusefinance.org