Smart Net-Zero

Climate Policy Initiative (CPI) | Source | Report |

This report quantifies a structural underinvestment in small-scale agrifood systems, where climate finance flows dropped sharply to USD 5.53 billion in 2019/20—just 0.8% of total tracked climate finance, representing a 44% decline from the previous period. The financing mix remains highly imbalanced: 96% comes from public entities, nearly 50% is delivered as grants, and equity accounts for only 0.6%, revealing limited private-sector engagement. Importantly, the report places this shortfall in the context of a much larger unmet demand: smallholder farmers face an annual financing need of USD 170 billion, while agrifood SMEs require USD 106 billion, underscoring that climate finance addresses only a fraction of the USD 276 billion total need. Recommended pathways include blended finance, risk-sharing facilities, and adapted financial products that expand access for women and marginalized producers. Strengthening data, creditworthiness assessment, and pipeline development are also central to crowding in private capital.