Rice is a food table, but its production can be very damaging, with climate change causing rice agriculture to release potent greenhouse gas methane (CH4) on top of the existing carbon footprint. In short rice is estimated by the Environmental Defense Fund to have a similar short-term impact as 1,200 coal power stations – as is second only to cattle farming for methane production.

However, leveraging climate finance to scale climate-smart rice production could be a way to reduce the impact and create a ‘cornerstone’ of global food security, according to a report by Earth Security Group (ESG).

Proposing three innovative finance solutions to support sustainable rice production in line with the Paris Agreement climate targets, Financing Sustainable Rice for a Secure Future is published with support of the UN Capital Development Fund (UNCDF), the Sustainable Rice Platform (SRP), the food and agribusiness company Phoenix, the World Business Council for Sustainable Development (WBCSD), and the Swiss Agency for Development and Cooperation (SDC).

These ideas include a ‘rice bond’ to finance sustainable rice value chains taking advantage of 2020 being a key year for the growth of green bonds in the agriculture sector, as highlighted by the Climate Bonds Initiative. A rice bond would enable a global rice processor, trader, or retailer to provide farmers with capital to transition to sustainable production, improve farming practices, increase yields and revenue, and become more resilient to climate risks.

Rice provides food for over half the world’s population (3.5 billion), with Asia accounting for 90 per cent of global rice consumption. In lower-income countries such as Bangladesh, Cambodia and Vietnam, up to 70 per cent of people’s dietary energy comes from rice. Under a business-as-usual scenario, the Intergovernmental Panel on Climate Change (IPCC) anticipates that rice production will fall across the world. Asia will be particularly hard hit due to a convergence of land degradation, climate change, and water scarcity.

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