Why Regenerative Climate Solutions Fail to Get Funded

A $20M regenerative agriculture initiative launches. The press release looks great. Three years later, the program disappears. Most people assume regenerative agriculture fails in the field. Farmers didn’t adopt. Practices were too complex. The transition was too risky. But after a week of conversations with capital architects and sovereign funds, a different pattern became clear. Many regenerative agriculture initiatives fail long before the first agronomic change happens. They fail in the capital structure. Regenerative agriculture is often financed as if it were a conventional agricultural project. It isn’t. It is a multi-layer risk system involving: • biological transition risk • farmer adoption risk • long transition timelines • supply chain coordination • uncertain monetization mechanisms Yet capital is frequently deployed without matching the risk profile of each layer. That’s where projects begin to break. The most sophisticated investors approach this differently. They design risk-aligned capital structures, combining multiple layers of capital: • Grants or catalytic capital to unlock early experimentation • Offtake agreements to anchor demand • Insurance mechanisms to protect farmers during transition years • Patient capital aligned with biological timelines • Commercial capital entering once the model stabilizes When these layers are intentionally structured, regenerative agriculture becomes investable. When they are not, the burden falls entirely on the farmer. And the system stalls. The reality is this: Regenerative agriculture is not primarily an agronomic challenge. It is a capital architecture challenge. The real work is not announcing regenerative programs. It is structuring and operating them so that capital, farmers, and markets align over a 10–15 year horizon. Because when the capital architecture is right, the transition in the field finally becomes possible. Curious to hear where others see the system breaking first. Thanks Gon Zifroni and Richard B. for the great exchange last week!

Are we financing nature restoration the wrong way? That is the uncomfortable question raised by a new study published by Margaret Morales (former VP Marketing at Terraformation, former Head of Carbon at Trellis Group, advisor to the Symbiosis Coalition)... Her latest report is based on responses from 74 nature-based carbon project developers. It offers a rare, grounded view of how projects are actually financed today and where the system is breaking down. The findings are sobering. 🥶 The hard truths 1. Developers are financing the system themselves Nearly 60%of projects rely primarily on: - organization balance sheets around 33 percent - project-level equity at 26 percent For early-stage projects, this dependence is even stronger. Many projects do not fail because they are low quality, but because developers run out of runway before reaching financeable milestones. 2. Capital is the bottleneck, not ecology or demand When asked about their biggest obstacle to financing, developers overwhelmingly pointed to: - the cost of getting a project investment-ready - long and expensive due diligence cycles Even more striking: the cost of capital is the single largest source of uncertainty in total project costs, ahead of MRV, audits, or field operations. 3. Project debt barely exists without offtakes Only 13% of projects use project-level debt as their primary funding source. Among those projects, 85 percent already have a signed offtake or are in late-stage negotiations. No offtake, no debt. Which means capital remains expensive and poorly aligned with long biological timelines. 4. Concessional capital plays a minimal role Just 9%of projects rely primarily on grants or philanthropic capital. This funding is largely limited to very early-stage developers and does not support scale. So is this a dead end? Not at all. There are reasons for OPTIMISM 🥳 1. The problem is clearly identified This is not a demand issue. It is not a quality issue. It is a very specific financing gap between early development and bankable project finance. That makes it solvable. 2. Offtakes clearly work when they exist For ARR, IFM, and soil carbon, offtake prices are already higher than spot prices, signaling anticipated scarcity of high-quality credits. 3. The market is structurally underinvested Current funding commitments would supply only about 50 percent of expected 2030 demand. Even without demand growth, future supply is already insufficient. 👉 Projects that survive today will be exceptionally well positioned tomorrow. This report does not say nature restoration is unfinanceable. It says we are still trying to finance long-term, biological, complex systems with short-term, ill-adapted financial tools. And when a market can describe its bottleneck this clearly, it is usually on the verge of changing. Now, happy new year 🙃

What’s holding back natural climate solutions? Natural climate solutions (NCS)—from reforestation and agroforestry to wetland restoration—have long been championed as low-cost, high-benefit pathways for reducing greenhouse gases. In theory, they could provide over a third of the climate mitigation needed by 2030 to stay under 2°C of warming. But in practice, progress is stalling. A sweeping new PNAS Nexus study reveals why. Drawing on 352 peer-reviewed papers across 135 countries, researchers led by Hilary Brumberg cataloged 2,480 documented barriers to implementing NCS. The obstacles are not ecological. Rather, they are human: insufficient funding, patchy information, ineffective policies, and public skepticism. The result is a vast “implementation gap” between what is technically possible and what is politically, economically, or socially feasible. The analysis found that “lack of funding” was the most commonly cited constraint globally—identified in nearly half of all countries surveyed. Yet it rarely stood alone. Most regions face a tangle of interconnected hurdles. Constraints from different categories often co-occur, compounding difficulties: poor governance erodes trust; disinterest stems from unclear benefits; technical know-how is stymied by bureaucratic confusion. These patterns vary by region and type of intervention. Reforestation projects, for instance, face particularly high scrutiny over equity concerns—especially in the Global South, where land tenure insecurity and historical injustices run deep. Agroforestry and wetland restoration often struggle with the complexity of design and monitoring. Meanwhile, grassland and peatland pathways remain understudied, despite their importance. The study’s most striking insight may be spatial. Countries within the same UN subregion tend to share a similar profile of constraints—more so than across broader development regions. This geographic clustering suggests an opportunity: Supranational collaboration, if properly resourced and attuned to local context, could address shared challenges more efficiently than isolated national efforts. Crucially, the authors argue that piecemeal fixes will not suffice. Because most countries face an average of seven distinct constraints, many from different domains, effective solutions must be integrated and cross-sectoral. Adaptive management—a flexible, feedback-based approach—could help. By identifying which barriers arise at each stage of an NCS project’s lifecycle, it may be possible to design interventions that are not just technically sound, but socially and politically viable. Natural climate solutions still hold vast potential. But unlocking it will require less focus on where trees grow best—and more on where people can make them thrive. 🔬 Brumberg et al 2025. Global analysis of constraints to natural climate solution implementation. PNAS Nexus. https://lnkd.in/gDmYJEph

🌍 How is public money still flowing into industries that fuel the climate crisis, while crucial climate solutions struggle to get the funding they need? What does this imbalance mean for the future of the Global South? These are some of the critical questions tackled in ActionAid’s new report, "How the Finance Flows: Corporate Capture of Public Finance Fuelling the Climate Crisis in the Global South". This in-depth analysis uncovers the disturbing trend of public finances being funnelled into sectors like fossil fuels and industrial agriculture—both major contributors to the climate emergency—while support for sustainable solutions remains alarmingly low. Here are the key findings: 1️⃣ Corporate Capture of Public Finance:Public finance in the Global South is being used to subsidize the very industries causing the climate crisis. Fossil fuel and industrial agriculture sectors receive an average of US$ 677 billion in subsidies annually—an amount that could fund primary school education for all sub-Saharan African children more than 3.5 times over. 2️⃣ Imbalance in Subsidies: The industrial agriculture sector alone received US$ 238 billion annually between 2016 and 2021. Meanwhile, fossil fuels received US$ 438.6 billion a year, with subsidies rising steadily to US$ 495.3 billion in 2023. 3️⃣ Lack of Real Climate Finance: Climate finance grants from the Global North for climate-hit countries are grossly insufficient, amounting to just 1/20th of the public finance going to fossil fuels and industrial agriculture in the Global South. This results in renewable energy receiving 40 times less public finance than fossil fuels. 4️⃣ Decline in Renewable Energy Investment: Public investment in renewable energy in the Global South is critically low, averaging just US$ 10.3 billion annually and decreasing from US$ 15 billion in 2016 to US$ 7 billion in 2021, even as debt distress increases. 5️⃣ The Need for a Just Transition: Fossil fuel and industrial agriculture industries maintain an iron grip on the economies and public finances of Global South countries, preventing an equitable and just transition to renewable energy and agroecology, both essential for addressing the climate crisis. 🌱 It’s clear that urgent reforms in global finance are needed to redirect funds toward sustainable and equitable climate solutions. I encourage everyone to read this report and reflect on how we can all push for a financial system that supports climate action and social justice. #ClimateJustice #Sustainability #FinanceForClimate #GlobalSouth #ESG #RenewableEnergy 📖 Read the full report here: https://lnkd.in/eqaAXiaJ

Why do billions flow to "nature finance" but the community rewilding project down the road can't get funded? 🌿 It's not an accident. It's architecture. I've seen it first-hand. Amazon Sacred Headwaters, one of the most incredibly organised, indigenous-led, protecting millions of acres of rainforest and yet deploying huge amounts of energy to raise $5k scholarships for their extraordinary Living School program. Meanwhile, billions meant for nature flow through structures that lead to further commodification and centralisation. Only 1% reaches the frontlines. Samantha Power spent years at the World Bank before writing the book on what's actually needed: Bioregional Financing Facilities and building through The BioFi Project https://www.biofi.earth/ BFFs decentralise financial resource governance and connect capital to regenerative projects at bioregional scale. Watersheds, not boardrooms. Place-based knowledge, not top-down metrics. The shift: putting financial decision-making in the hands of people living in relationship to place. The indigenous stewards. The farmers rebuilding soil. The communities who know their bioregion's watersheds, seasons, needs. 🌱 I hear family offices ask "Where do we actually deploy capital for regeneration?" Here's the answer: It's not another carbon offset or ESG fund extracting from the same system. It's not actually a funding gap. It's a power and governance gap. Capital exists, but it just flows to people in boardrooms, not people on the land. More soon on Monty Bryant 🧙🏼♂️✨and Franz Josef Allmayer 's inspiring work on creating the infrastructure for bioregional finance. Who's working on bioregional finance where you are? No matter how small the initial project.🌍 #BioregionalFinance #RegenerativeEconomy #CircularBioeconomy #PlaceBasedSolutions Amy Clarke Tyler Wakefield Ma Earth Matthew Monahan Jessica Flore Angel Maxime de Rostolan Marion Schuppe Per Espen Stoknes Esben Stockmarr Damien Jourdan 🦋 Marc Palahí Justin Adams OBE

I spent a great part of my career arguing that tropical forests, peatlands, and agroforestry landscapes deserve FAR more investment than they receive. I believe that still. What I have come to believe with equal force is that the financial architecture currently mobilized to fund them is built on a physical fiction, and that the fiction will eventually destroy the funding. The problem is not fraud, though fraud has occurred. The problem is more fundamental. Carbon and biodiversity markets have been designed around the concept of permanence, and permanence has been misconceived from the beginning. Not mis-calibrated, not under-resourced but misconceived. The 40-year or 100-year permanence standards that underpin these markets have no physical basis as equivalence claims against fossil emissions whose atmospheric perturbation extends across centuries to hundreds of thousands of years. You cannot fix this with better satellites, larger buffer pools, or more rigorous baselines. The instrument is wrong for the liability it claims to cover. This matters urgently because the failure mode is now visible. California's wildfire buffer, intended to insure 100 years of carbon permanence, was effectively consumed in a decade. Zimbabwe's Kariba project was found in 2025 to have issued 57 percent of its credits in excess of any verifiable climate benefit. Across 52 tropical REDD+ projects studied in Science last year, only 19 percent met their stated emission targets. These are not anomalies. They are the architecture working as designed, which is the problem. The way forward therefore is not to abandon nature-based finance but it is to stop pretending that forests are something they are not.

The idea that “anything good for the planet should be free” is one of the biggest obstacles to real regeneration. Last week I had a conversation with someone who told me: “I only want to do permaculture through NGOs… for free. I don’t want to design gardens for wealthy people, what if they don’t even believe in climate change?” She said it with conviction. Even turned around mid-sentence to check if I was listening. But here’s the truth that nobody wants to say out loud: Nature is not political. And regeneration is not charity. This mindset — that anything good for the land must be free or cheap, is exactly why so many environmental movements stay small, underfunded, and exhausted. The NGO model can inspire awareness, yes. But it will never scale the regeneration we need. Because real regeneration requires: • capital • expertise • long-term stewardship • and a business model that actually works And yes — fair pricing. Here’s the irony people forget: Regeneration is one of the biggest economic opportunities of our time. It increases land value. It improves soil. It reduces water costs. It lowers long-term maintenance. It produces healthier food. It strengthens communities. I’ve seen properties double in long-term value simply because the land was regenerated instead of depleted. That isn’t charity. That’s smart design. Rich people aren’t the problem. Poor people aren’t the problem. Climate believers, climate deniers: that’s not the point either. The real problem is believing regeneration only belongs in the NGO world. If we only do it for free… we guarantee it will stay small. We guarantee it will be slow. We guarantee it will never reach the scale required. We need regenerative businesses. Regenerative estates. Regenerative farms. Regenerative developments. The future belongs to those who understand that healing the land creates value: ecological, social, and financial. The environmental movement will win the moment we stop apologizing for charging fairly to fix the deepest problems on Earth. Because regeneration is not a donation. It’s an investment. And it’s time we treat it as such. #regenerativedesign #regenerativeeconomy #landscapearchitecture #soilhealth #naturesteaches #futureofwork #impactinvesting #biodiversity #systemschange

Everywhere I look, there’s another #ClimateConference.  Another panel. Another paper.  Always the same words: #mitigation, #adaptation, #NetZero.  The big problem: finance follows carbon and not context. This framing of “mitigation vs. adaptation” shapes everything: How money flows How projects are designed How “success” is measured It works in boardrooms.  It doesn’t work in African farms and schools. In climate funding, the money goes where there’s a measurable outcome: eg tonnes of CO₂ avoided or sequestered, or  credits that can be traded.  The icing on the cake: global benefits for high-emitting countries chasing net-zero. The risk? African landscapes becoming carbon farms for the Global North, serving offset markets more than local resilience. But farmers don’t care about categories. They care about protecting the next harvest: 🌱 Mulching that saves water (and locks carbon) 🌱 Zai pits that trap rain (and heal soils) 🌱 Agroforestry that shades crops (and stores carbon) Africa doesn’t need to be told what regeneration is.  It’s already happening in sack gardens, banana circles, solar dryers. The real question: Does it help people thrive today and protect the planet tomorrow? Will the global system recognize, trust, and scale this? When the answer is yes,  that’s the kind of green growth Africa should be incentivizing. And the kind the world should be financing. This issue inspired me to finally write a longer piece after a long time!

The growing momentum for regenerative land use is essential — but the financing model matters. In this Forbes article by Felicia Jackson, I reflect on the deep flaws of voluntary carbon markets and why so many countries are turning to them — not because they are effective, but because the international community has failed to provide the real financing needed for sustainable land use and development. 👉 https://lnkd.in/gpUz7m4A For individual countries or communities, carbon markets may seem like the only available pathway to access finance. But globally, this model guarantees collective failure — undermining our ability to meet climate goals and harming the very communities these projects are meant to support. Conservation, regenerative agriculture, and ecosystem restoration are essential for climate change mitigation, climate resilience, biodiversity preservation, food security, and improving rural livelihoods. That’s precisely why they must be financed on their own terms, through mechanisms that ensure broad integration into national and regional development strategies with long-term, adequate and sustainable financing. Voluntary carbon markets not only fail to deliver those integrated outcomes, but critically they also rest on the fiction that complex emissions in one place can be “neutralized” by carbon-only removals elsewhere. Worse, many projects funded by credits are not even removals, meaning they allow for net emissions growth (+ continuation of other local pollutants). The credit markets also regularly over-credit and under-deliver, and divert scarce finance toward project developers, brokers, verifiers, and data platforms instead of the actual activities that need financing. What’s exciting is that real, transformative pathways do exist. With the right combination of technology, policy, and public finance, we can really achieve systemic land-use transformation. New tools — like Soil in Formation, PBC's real-time, self-operating, multi-parameter soil sensors; in situ weather forecasting apps to inform planting/harvesting timing; and digital diagnostic & treatment plans for failing crops; among others — offer game-changing insights for farmers and policymakers, helping to improve on-farm practices AND to allow tailored, responsive extension services, subsidies, etc.. for improved land use management. The argument that carbon markets are necessary “because nothing else works” often reflects a lack of vision and an overly simplistic understanding of what constitutes political will. In reality, systems solutions are possible — and already emerging across so many sectors and at many levels of governance (local, national, regional), with the support of diverse public and private actors. It is both possible and necessary to design and invest in the integrated, systemic solutions that will deliver the transformations we urgently need.

A new review identifies 33 distinct nature-positive climate risk transfer and financing instruments globally, but finds only 76 of 313 documented projects have actually been implemented.                                                         The authors screened publications and databases to map mechanisms that transfer disaster risk to another party while mitigating climate hazards through nature-based solutions. The instruments span insurance products, parametric coverage, blended finance, debt-for-nature swaps, and resilience bonds. Roughly three-quarters of documented concepts remain unrealised at scale. The review identifies limited equity considerations, persistent uncertainties in risk modelling, and almost no systematic post-project evaluation as the binding constraints, leaving cost-benefit data for nature-based solutions too sparse to support pricing. For insurers, the architecture for monetising nature-based adaptation already exists at the instrument level, but cannot yet be deployed at portfolio scale because the underlying risk and outcome data are too thin to support reserving and capital allocation. Bridging that gap is the next commercial frontier. Kudos to Alina Bill-Weilandt, David Lallemant, Vivien Chan, Meherwan Rohinton Patel, and Perrine Hamel. cc CarbonRisk Intelligence