 You are listening to Make Change Happen, the podcast from the International Institute for Environment and Development. At the COP26 climate conference, political leaders called for more action to address biodiversity loss and climate change together. In this episode, hosted for the first time by James Persad, IID's new director of communications, we discuss how this must be financed and the possible mechanisms for spurring actions on the ground. Good morning, good afternoon and good evening wherever you are in the world. Welcome to the latest Make Change Happen podcast, episode 19. I'm James Persad, the new director of communications at IID. Handing on from Liz Carlisle and I'll be your new host for the series going forward. Today's episode is about getting the money to where it matters for nature and climate and I've got a fantastic panel with me. Experts from around the world who are going to talk about why it's important to make sure that finance for actions on nature and climate must flow to the local level. What are the barriers and what are the opportunities to making that happen? And what changes are needed in the current global financing mechanisms to more effectively spur actions at scale for climate and nature. So without further ado, I will ask guests to introduce themselves. Firstly, Xiaoting, if I can ask you to introduce yourself please. I'm Xiaoting Hou Jones, working as a senior researcher at the Natural Resource Group in IID. Thanks James and thanks everyone. Thank you Xiaoting. Introducing our next guest, Mandy Barnett. Good morning everybody, morning from South Africa. I'm Mandy Barnett from the South African National Biodiversity Institute. And we are accredited with the Adaptation Fund and Green Climate Fund and look very forward to sharing some of our experiences with you today. Thanks Mandy and great to have you here today with us. Moses Egaru, can I introduce you please. A very good morning from Kampala, Uganda. My name is Moses Egaru. I work with the International Union for Conservation of Nature IUCN as a senior program officer. Thank you. Thank you Moses. And last but not least, introducing Yi Qing Song. Hi from China everyone. My name is Yi Qing Song, leader and a device of Pharmacy Network in China. Okay, so the theme of the podcast is around getting the money to where it matters for nature and climate and essentially since COP26 in Glasgow, political leaders have been calling for more actions and more financing for nature and climate. We're growing interest in understanding how to design and strengthen financing mechanisms to get greater action at scale. So what are the options? What are the challenges? And what do we need to do to get the finance to where it needs to go so it can be used effectively? Xiao Ting, we've set the scene a little but maybe you can give us a bit more background and tell us what we mean by a financing mechanism please. Thanks James. As you mentioned, in recent years, we have seen increasing interest from both governments and companies in investing in what we call integrated solutions that can help address the pressing challenges of climate change and biodiversity loss together. As more people around the world experience more frequent extreme weather events, for example, the yet again record breaking heat waves this summer in many parts of the world. More people are also recognizing the important role nature can play in helping us adapt to climate change. For example, I definitely appreciate the shade provided by the trees when the temperature salt here in England. For the field we've seen communities restoring mangroves that can help mitigate impacts of coastal storms. Some call those ecosystem-based adaptation, others call it nature-based solution for adaptation. But no matter what terminologies we use, they're essentially about restoring, conserving or sustainable use nature so we can better adapt to climate change impacts. And there is strong evidence showing that those type of approach are cost effective including our own IED research. But those integrated approach are still largely underfunded and underutilized. For example, a UN report published last year found the amount of funding goes to support those solutions is considerably smaller than the total amount invested for climate change. And the same report also argues that the total amount of funding for nature-based solutions must triple by 2030 if the world is to meet its climate and biodiversity targets, including those set in the Glasgow Corpus you mentioned before. Although when we talk about financing nature and climate we often tend to forget it's not just about how much money is available, it's equally and sometimes even more important to think about how the limited funding available is spent. This is what we mean by talking about financing mechanisms. This is the part of that big finance puzzle that looks at how finance is governed, how the money is spent, who ultimately benefit from it, which all determine whether the finance for nature and climate can actually make positive change on the ground. Thank you, Xiaoting. So it's about getting positive actions with nature-based solutions at the centre and who are they implemented by? Mandy, perhaps you could help shed some light on that question. Yes, I would love to do that. I relate very well to what's being raised here, because Sanbi is a biodiversity institution that's of course very interested in the role that biodiversity and ecosystem services can play in supporting better lives for people. And of course in the context of climate change, this couldn't be more important. So we've had some very interesting experiences with the adaptation fund in particular, where the adaptation fund took a very interesting chance on Sanbi and allowed us to build the funds very first what they're called enhanced direct access project. So I need to tell you a little bit about the background of how climate finance works in order for you to understand what this means and why it's so significant. What it means essentially is that in the international climate finance space, there's been a massive innovation, which is about channeling funds to national entities so that these national entities can go on to programme these funds in country. And this modality is called direct access. And there's a lot of efforts globally to build the capacity of national entities to be able to do this important work. When this happens, what usually happens is that the funds are pre-programmed. So national entities are driving the work, but the funds have determined what the programmes of work will be. When we started doing our programming for the adaptation fund opportunity and we started to engage with stakeholders in South Africa, we were very excited to explain to our stakeholders that Sanbi was accredited as a direct access entity of the adaptation fund. And a whole lot of local community members said to us, what do you mean direct access if it's millions of dollars going to government? Direct access is only important or it only matters when it's about money going to the ground. And out of that was born this idea of what if we do a small grant facility where we channel relatively small, relatively small, not so small in the eyes of the communities themselves, but relatively small amounts in terms of how the global funds see this. What will happen if we channel these funds to the ground? And the adaptation fund supported this, the new concept of enhanced direct access was born, and we were supported to do this project that channels relatively small, $100,000 per project, relatively small amounts of money to the ground. Which, after seven years, huge successes. And if I can talk just to two of these projects, just to give you a flavour of what they look like and how they bring biodiversity and climate change together in integrated responses. One of them was in a community in a very dry area of South Africa where the communities practice livestock herding. And the project introduced climate resilient breeds into the herds of the sheep and the goats. These animals have now successfully bred into the breeds and their offspring are now continuing to breed. And seven years later, we've got herds that are much more able to tolerate high and low temperatures that are aligned with what we expect in climate change to increasingly bring to the areas. But importantly, they're also grazed differently. So the impact that they're having on the biodiversity and in terms of the overall condition of the catchments is fundamentally different. So communities are able to better respond to climate change in the context of investing in nature and ecosystem services. And another really interesting project was in a different community where the community has livestock that rely on very shallow dams to collect water and provide that for the livestock over different seasons. And these dams were silted up because of the condition of the catchment. There was a lot of erosion. There was a lot of invasive alien plants. And the project came in, sorted out the dams, removed the invasive aliens, dealt with the gullies that were causing the erosion. And now we have a much better managed catchment, water in the dam and a community that overall is much better able to cope with climate change. Thanks, Mandy. Yeah, I mean, they are wonderful examples. And it just shows what happens when you put the power into the hands of local expertise who really understand the issues on the ground that will help to enhance communities lives at a local level. I think they're fabulous. Thank you. Yiching, does that resonate with you? Is it the same situation in China or are there different issues? Yes, the issues we are dealing with and we are facing are more or less the same. However, given the country tax, our local community and small farmers situation are a bit different. And one factor here I should remind everybody here is that China is still the world's biggest smallholder farming countries. We still have 200 millions of farming households with an average farming areas of less than 0.6 hectares, you can imagine. Those smallholder farmers are living in 2.6 million natural villages. And those natural villages cross vastly across ecological and culturally very diversified areas of China. And more importantly, those smallholder farmers are the main force of agricultural production and contribute to about 80% of the food supply in China still today. And they are not only provided food, but also act as a steward for diversity of plant, animals, and forest around their farms. So far, they are still dealing with those farming practices and maintaining those small-sized farms and dealing with continual changing climate and also the increasing of social economic changes in the past few decades. But for those smallholder farmers, it's their production and livelihood issues. And they have two dealing and adapting in their daily base in a very diversified and integrated way. Everyday with combined with natural resource management farming practice and even dealing with changing market and social contact for very practical solutions and for their livelihood continuity and resilience everyday. Thank you, Yixing. And what was the money spent on? Could you give us some examples perhaps? For example, the continuous big spring drought in Yunnan province, where is our one of our starting base? In the last few years, the big spring drought become more and more severe. So far, farmers have two working on drought resistant seed crop and agro forest water irrigation, maintenance, soil management, all those integrated approach and solutions through collective actions, community level. However, their crucial roles and the contributions in food production, agro biodiversity and climate change are not fully recognized or are not really recognized and supported, very under supported. Those under supported issues are more or less the same as other countries. However, the fund programs and intent are a bit different and very, very little fund is flowing to the local level to help support those efforts. As you may know that China's climate change effort are more in the mitigation rather than adaptation in a big approach. And at a grass root level, there's almost no adaptation fund flow to. So there are a lot of more effort are from like local NGOs and network working with farmers. Thank you. And Moses in Uganda, will this kind of approach work for you? Yes, thank you very much, James. Suddenly in Uganda, maybe I should first begin by noting that just last week we had a massive landslide in one of the landscapes in the eastern part of the country where quite a number of investments and lives were lost. And really, this is the reality of the climate change impacts that we are facing as a country. And it cannot be overstated how much we need to realign our development pathway to ensure that we incorporate climate proofing of investments, but also managing of the catchments and natural resources to avoid some of these disasters. That being said, I think for Uganda really, again, take it more at the local level. For Uganda, we really, as a country, appreciate the need for bringing in financing at the local level. And currently, there is very little financing avenues available that trickle down to the communities. And even when they get there, the magnitude or impact caused by these financial models is not really helping to trigger the kind of shift in terms of natural resources and ecosystem resilience. That is MVC. So for Uganda, we've innovated and piloted an approach called the Community Environment Conservation Fund model. And this approach is really a model that is trying to link the restoration or landscape ecosystem management actions to small-scale financing. And how it works is that the communities are facilitated to develop restoration action plans. But these restoration plans have targets that are agreed with the communities. And then once these targets are achieved, then the communities are eligible to access financing or to access grants from the projects that we implement. And this really means that we are able to achieve two things. One is the communities participate in the restoration of their landscapes and natural resources. This, of course, leads to better landscapes. But again, in addition to that, there's the issue of the livelihood. How do we link livelihood enhancement to ecosystem management? So this is where the Community Environmental Conservation Fund comes in to boost the livelihood needs of the communities. And this approach has been piloted since 2012 with very interesting results. We've been able to see increased community participation. But also maybe one of the key things I need to mention is the gender perspective of this approach. Because most of the people who are directly reliant on the natural resources in the rural settings in Uganda are actually mostly the women. Because they are the ones who take care of the families. They are the ones responsible for picking firewood, the nutrition of the families. So they are mostly in the collection of water from the wells. So they are mostly directly in contact with the natural resource base. And as a result of this mechanism, we've been able to realize through our feedback mechanisms that the women are appreciating this even more. Because now it is able to impact on their lifestyles in terms of being able to provide economic benefits to them and their families. But also reducing maybe the distances they take to collect firewood. But also in terms of providing their families with sources of income and that has had multiplier effects. And this has been really appreciated at that level. So for us, we really believe that these mechanisms that directly go to communities really empower the communities to be able to become stewards of natural resources. That's a really important point, Moses, about the importance on the women and girls in Uganda benefiting from this financing and really great to hear. So you've tested this mechanism. What do you think needs to be done to scale it up? For us, we believe that the pathways for scaling up have already been defined in some of the assessments that we've undertaken. For example, now this approach is currently being implemented by IUCN and also some partners are coming on board and even government. But for scaling up purposes, we believe that it's very important to get private sector on board. For example, how do we get the local financing institutions to be part and parcel of this so that they can support in the management of the funds and be able to connect with the communities at the local level. But also how do we embed this in the government planning cycles? So we believe that for scaling up, once we have this kind of shift in terms of the policies, but also bringing other actors, government, private sector and all other stakeholders to support and drive this process. Then we believe that the scaling up pathways would already be set. And it will be very easy for us now to work together with the communities to move this beyond the scale at which we are operating. Thanks, Moses. And I guess it's really important to demonstrate the impact both from a livelihood's point of view as well as an environmental impact point of view. So sort of the social impact that it's having on the ground as you describe as well as the environmental benefits. Now, Mandy, Moses talked about loans facility. Would you mind just touching on other ways, other mechanisms for delivering finance to the local level for me please? Yes, absolutely. And maybe before I do that, just to say that I resonate very well with a lot of what Moses is raising. And what's really interesting about that is that the lessons that are emerging from developing countries across the world are very similar. So there's a lot of convergence around what is needed, what is impactful and what needs to be unlocked really in order for this work to happen. And, you know, related to that, I think is of course the challenge of scaling. And that's a challenge for adaptation in general, because, you know, in the mitigation work, it's very easy to get to scale. In adaptation, when we're getting to the ground, it becomes a very almost individualized set of responses that are needed. And that calls on investments in process. And so, you know, I think it's very important as we move forward in unlocking climate finance for this very important work that we don't get locked into a trap that it's just about assets or just about things. And remember, all the lessons that have come from community based adaptation and community based natural resource management and community based development around how investing in the kind of enabling systemic softer skills are so critical to delivering on these programs of work. If I come to the question that you're asking me about about finance, I think what's very important here is to never lose sight on the fact of the public good associated with this kind of work. I think the private sector is important. But I think that there's an obligation in terms of the climate crisis of supporting vulnerable communities in developing countries to respond to climate change with public funds. And I think that we need to make sure that the global funds continue to mobilize in the ground space so that communities that are unfairly impacted by the climate crisis are able to be supported to do what they need to do. Of course, in a way that we're building sustainability into the work, you know, we want to leave communities better off, not with projects that unravel once we leave. But I think that there's a danger in us thinking that we can access private sector finance for this work. And in that way, actually divert attention from the importance of mobilizing as I said public sector finance to support these vulnerable communities to adapt. I've got you. Thank you, Mandy. And you talked about the proliferation of possible projects at a local level. Do you, which strikes me as a barrier, do you have thoughts or examples of how those can be managed in a way that helps to scale up the projects locally? Yes. I mean, we have a lot of thoughts and a lot of lessons that have emerged from our experience doing this over the past seven years. You know, the first point to make is that it's difficult. And, you know, it's not as simple as, you know, dropping some money into a postbox and thinking that the results will just come. We need to be working across the whole system. And then the second point which is related to the point about it being difficult is the need to invest right across the system to enable this. So, you know, if climate finance is going to flow to the ground, what we need is for the missing middle to be working. And there's been a lot said about the missing middle in climate finance and around how we need government, subnational government, local government, NGOs, community organizations all working in partnership in order to be able to get the money to flow to the ground and the benefits to materialize on the ground and to be sustained. I think that we need to have investments at all of those different levels of the system and a recognition that investments at these different levels of the system are important in order to sustain this impact. And I think critically for developing countries, and this might be a controversial point, I think we need to be investing in building capable states. So, you know, I think it's very important the work of civil society in working alongside communities. Often civil society is stepping into a gap that is there because government is not doing what it needs to be doing and I think we really need to be working into those spaces and understanding what are the barriers to government doing its work in service delivery, et cetera, keep supporting communities on the ground and looking at how we build a capable state that can then work alongside communities and civil society to deliver these important programs of work. Thanks Mandy. So we're saying need a whole systems approach need to look at national level, regional level and local level authorities in order to deliver kind of complete and an accurate solution. Yes, absolutely. And everybody working together talking to each other. Terrific. Thank you. Just coming back to you shouting so we've discussed some of the issues today and IED and partners have been highlighting these issues around climate finance for several years now. What do you think the next step should be? Good question, James. Indeed, we have been working on what we call money where it matters for years now, including documenting the learning from those very interesting diverse complimentary finance deliver mechanisms, including the example we just heard from Moses, Yi Qing and Mandy. There's a lot of evidence pointing to what's not working in the system and the change needed to transform the current funding system to make finance flow better to local level. Those lessons has built a foundation for a set of what we call locally led adaptation principles, which have been gaining global support. One of the key next step for me is to continue to emphasize that those principles are not only applicable for climate adaptation, but also for addressing biodiversity poverty and inequality together. And as we have heard from Yi Qing, Mandy and Moses, we often see local communities already championing those integrated approach with support from a variety of local stakeholders, including government and civil society. Because climate change and biodiversity laws are already felt at the local level and they already impact the daily lives of those vulnerable communities. And when we go to local level, there's no sectoral silos, there's no different departments for climate nature and development. Therefore, by making funding flow better to local level, we can avoid the often sectoral approach and tunnel visions that prevents what you mentioned about scaling up those integrated approach like ecosystem based approach and make them more the norm rather than exception. Though local communities are often, I think the forgotten investors in nature and the climate responses, we often mention governments, we often mention private sector, but from what we heard already from the examples from China, Japan and South Africa, they show that local communities and local governments are investing their time limited resources in trying out different approach to cope with changing climate and environment. Individually or at local level, those investment may look really small in comparison, for example, to millions of dollars from international funders, but collectively we have seen those collective investment by those local stakeholders transform landscape from mountains in China, dry lands in South Africa to watersheds in Uganda. So if governments and companies and banks can design their funding mechanism to leverage those local actions and leverage those missing middle, as Mandy mentioned, it will help unlock vast amount of resources and innovation at local level. So what does that mean for IED's work? Part of IED's work going forward is also continuing to strengthen the local voices in national and international discussions on nature and climate, including how to finance nature and climate, and ensure that international national policies can reflect those local realities, can reflect and think about what we can learn from those existing mechanisms and support integrated approach like ecosystem based approach, nature based solutions that consider some difficult trade-offs but ulti-optimized synergies among different objectives for climate nature and the development. That's terrific. Thanks, Xiaoting. And just to say, just to add, I think the locally led adaptation principles report can be found on the IED.org website. Moses, what do you think the next step should be with regards to getting over the barriers that are hampering climate finance flowing to the local level? What's the next step? For us, we really believe, speaking from a developing country perspective, we believe that the international financing mechanisms are already in place. But I think for us at the local level is how best then can we work together with these existing financing mechanisms to ensure that the perspectives of the communities embedded in the type of financing mechanisms that are available. Whatever is designed or the frameworks through which they are designed and provide financing down to the grassroots, building the community perspective, the interests of the communities, and ensure that the other issue that we need to also address is how do we then support transformation of the communities, but also the capacity issues, you know, the soft skills that are required to be able to push over the hurdle. So I think these are very critical. But also, again, how do we bring the critical actors to work together in a synergistic manner? Private sector, government, civil society, and be able to speak more so in the same language, but also drive in the same direction. So that whatever investment is coming in is really delivered to the local level. But it also has support systems from these actors and players that are able to support the communities to ensure that the results are attained. That's wonderful. Thanks, Moses. Yixing, just finally to you, we've discussed the issues your organization and other partners of IID have been highlighting this issue around how to get the money to where it matters for years. What's the next step, do you think? My organization, Pharmacy Network in China as a nonprofit community based organizations, our goal and aims to strengthen pharmacy systems and improve their livelihood while enhancing food security and climate change resilience. We're working closely with small farmers and communities. Our approach is quite integrated and we're trying to facilitate the collaboration between farmers, communities and multiple stakeholders from both public and private sectors, including scientists, local government, and even local enterprises, and more and more civil society groups involved in the process. Pharmacy Network in China now working with more than 45 pilot rural communities with more than 50,000 smallholder farmers in 10 provinces across the country in China. And I think to scaling up what works at grassroots levels are quite important is what we are thinking we should try to push forward in the coming years. Thank you, Yixing. So final question from me. Thanks for a wonderful, wonderful podcast. My first one is host so thanks for making it a really interesting conversation. It's all about making change happen. So what's the one thing you think needs to change to get finance to local level access for adaptation initiatives if there was one thing you could choose. The first thing I would say is we need to make it simple. You know, we talk about supporting integrated responses, but in reality, the complexity of accessing finance is such that it doesn't enable the easy integration of local and indigenous knowledge into the development of responses. You know, anyone who's working with the Green Climate Fund will know the conversation about the development of the climate rational, which seemed like a very good idea in the beginning, but is so complicated at the at the moment that without specialist consultants to put an argument together, there's no project proposal. And so how does that fly in the face of the principle of locally led adaptation. And then the second point that I would make in there is that in order for us to work across the system. We need to have warm bodies that are able to work into those issues at different levels of the system and I think the big gap there is resourcing for subnational capacity. So of course not to take away of the imperative of resourcing at the local level because that's what this is all about. But in order for the system to work what we need to be doing is building the capacity of subnational actors so that they can work to join the dots across the whole system that needs to work for sustainable flows of finance. Terrific. Thanks Mandy. I think one key thing needs to change is that when we talk about financing for nature and the climate, we should not only talk about the volume of funding needed, which is often mentioned in media and when we speak about this with founders, but also really start to think about and talk in the same breath about how does money spend the deliver mechanism that can make the limited limited funding being spent better. And Mandy Moses and eating already gave us a lot of food for thoughts of how that can happen. At the same time the cases from China, Uganda and South Africa also point to the importance of very patient and long term investment, which is utterly lacking at the moment skills relationships networks, all take time to build and nurture. So patient investment really is crucial in all cases. Great stuff. So Moses any reflections on what we've just heard and the one thing that you think needs to happen in order to make change happen. Yes, thanks very much James. From our context we really believe that in as much as my colleagues have mentioned some of the things that need to happen to transform availability of finance for climate change adaptation and mitigation. But for us in our context we really believe that it is important to integrate both indigenous or local knowledge with the science. And the reason being is that in the local communities, the communities understand what works for them within the landscapes. For example, what species thrive, how are they adapted to the environment. But then it's also important then to integrate the science to match with this indigenous knowledge and the science brings in what transformation needs to be done, what kind of projections, how do we improve the breed of maybe livestock. So once we integrate the science and indigenous knowledge, then it helps us to develop packages that speak to the needs of both the local communities, but also are informed by the general source of knowledge. And this makes sure that whatever interventions that we are delivering are really fit for purpose and they will be able to meet the needs of both the communities but also ensure that they are climate proofed and they are responsive to what is necessary or what the catchment or the environment under which they are bring prescribed works or needs. So it's very important to integrate both of these approaches because in our perspective it is what delivers the results. Thank you. I think that given the situations in China that this from the national strategy we have a number of big programs like climate change adaptation, like rural revitalization, like agriculture transformation. Those programs are quite good, but the implementation at a very grass roots levels need to be integrated for climate change adaptation, we really need to combine all those top down program together. And then to support the very grass root level NGO to fill up the missing gaps to bridge in the communities with the outside supporters with integrated approach. What we can do is that is that to do a integrate capacity building for supporting those communities and also link those communities to multiple stakeholders. So this is what I think that the local NGOs like a pharmacy network and other NGO network could do at a grass root level to play the role as a platform to bridge in the local communities actions to the public fund to the private fund and then to assess the support to multiple stakeholders. And the more and more important also involved in CV societies working together with the local communities, both in rural and urban. Thank you, Yiching and a huge thank you to all of our panelists today for a really fascinating conversation. Thank you for listening, especially as it's my first time hosting and look forward to the next episode of the make change happen podcast. Thank you. And you can find out more about today's podcast, our guests and their work at www.iied.org slash podcast where you can also listen to more episodes searching for ecosystem based adaptation on the website will lead you to information on finance delivery mechanisms and some interesting story maps. You can leave us feedback or follow the podcast at soundcloud.com slash the IED. For more information about IED and our work, please visit us online at www.iied.org.