The Lay of the Land for Sustaining Climate-Smart Agriculture in the US and China: A China Town Hall Conversation

Speaker Highlights 

Shaoxin Li

The US is the largest country source for green, sustainable, and social bonds in total. China is placed number three, but China is the number one source for green bonds. From 2019 to 2022, China’s green bond market has grown 3.6 times, but land use sector receives limited funding from the green bond market, only 3-5% per year. 

Agricultural policy development in China has been very important to the growth. In 2021 China issued 14th five-year plan on green agricultural development...This provides strong signals that green agriculture should be developed and define the key areas. The 2023 Action Program for Methane Emission Control also identifies agriculture as a key sector, including livestock management, rice paddy, and manure management.  

We are facing gaps in financing agriculture to address climate change. Agriculture itself faces lots of finance challenge, such as low risk tolerance to nature and low risk tolerance to market impact. It’s hard to get finance from banks. There is a lack of climate finance for the agri-food system. $28.5 billion has been tracked from climate finance from 2019 to 2020, but we need more, we need $381 billion every year before 2030, according to UNEP report.  

Ben Thomas

The first program I want to talk about is the partnerships for climate smart commodities. This was announced by USDA in 2022. They've given over 3 billion in funding for 141 projects across the United States. And the scope of these projects is kind of threefold. One is technical and financial assistance to farmers. Second, how to develop innovative systems for MMRV. That's measuring, monitoring, reporting and verification. And in other words, how do we know what results we're getting out of these actions? How could we prove that and how sure we can be of those results, and third, market development and promotion. 

[Energy] does [fall under climate smart agriculture programs]. And as the first round of eligible activities were released last year, several related to irrigation.  There are a lot of questions about,“Well, how's irrigation can really mitigate greenhouse gas emissions?” And there may be a number of other ways, but electrifying that infrastructure is one way to really bring down carbon emissions from irrigation. I remember when I was a kid, you drive out around west Texas, and you hear all these engines running nonstop. We can do more of that [electrifying heavy equipment], bringing carbon emissions from equipment [down] is a big piece of the emissions pie. So yeah, we need to go at it. 

These conservation programs that I mentioned under the Inflation Reduction Act are typically four- or five-year contracts. And I think that's really key in getting farmers over that hump so that they can freely adopt practices that they're pretty sure will work on their farm, but that they can't necessarily afford to take a hit on for especially, you know, up to five years. So that kind of transitional phase where they're bringing in new practices, that’s where these programs really shine. Also wanted to respond to some excellent comments that were just made on resilience. Climate Smart Agriculture can not just be about mitigation, right? Farmers have to survive year to year if they're going to mitigate the emissions from their operations so that resilience is key.