Review: Climate Finance readiness of the animal protein sector: overview of experience in linking the sector to Climate Finance, and options to address bottlenecks

Despite the importance of the role of Climate Finance to comply with the United Nations Framework Convention on Climate Change 1.5°C objective, there is no consensus on the definition of Climate Finance and the estimated assessment of its aggregated flows and effects remains challenging. Despite being a major emitter and having a significant and cost-effective mitigation potential, the livestock sector has so far only received a marginal share of Climate Finance. As demand for animal protein products continues to increase (68% between 2010 and 2050), there is a compelling case for channeling more Climate Finance investments into the sector to incentivize greenhouse gas emissions reduction at scale. Bottlenecks in linking the livestock sector to Climate Finance include the insufficient capacity to assess the cost-benefit of projects, high upfront cost and risk perception of investors, the informality of the sector, non-existence of Climate Finance instruments dedicated to the livestock sector and lack of cost-efficient Monitoring, Reporting and Verification systems. Nevertheless, recent developments provide avenues to increase the access of the animal protein sector to Climate Finance.