The first day of the seventeenth Conference of the Parties to the UN Convention to Combat Desertification (UNCCD COP17) highlighted a critical puzzle: how to turn the goal of Land Degradation Neutrality (LDN) into projects that capital markets can recognize and finance. This challenge is set against a stark financial backdrop, where the annual investment needed for global land restoration and drought resilience from 2025 to 2030 is estimated at $355 billion, yet current funding flows stand at only $77 billion, leaving a massive annual gap of approximately $278 billion.
At a side event titled "From LDN Targets to Investable Projects," three experts tackled this issue from distinct angles. Sharyn Rossrakesh, Strategic Planning Director at Swedish climate tech firm Earthbanc, focused on the initial screening of restoration projects. Rieko Lee, from the Global Business Division of Japanese carbon credit developer Green Carbon, addressed the role of carbon markets, while Ilex Lam, a Practice Professor at City University of Hong Kong's Department of Social and Behavioural Sciences and Co-Director of the Impact Finance and Transition Lab, discussed blended finance models. Their collective focus was on improving the bankability of restoration projects to move them from mere necessity to actual investment.
A key bottleneck, according to Rossrakesh, is that many restoration needs are not yet packaged as mature projects ready for development and funding. While there is no shortage of degraded land, the number of projects that have undergone the necessary preliminary work to attract potential financiers remains limited. To address this upstream gap, Earthbanc is deploying a digital tool called Earthbanc Intelligence to conduct early-stage screening and assessment, aiming to identify projects with the highest development potential.
While Earthbanc's work centers on the 'front-end' before projects enter the investment pipeline, Green Carbon's Lee extended the discussion to the carbon market and international buyers, specifically focusing on how Mongolian restoration efforts can connect to global demand for carbon credits. Lee noted that financing is a major constraint for land restoration in Mongolia, but carbon finance could serve as a supplementary funding source. By improving grassland management and boosting soil organic carbon, some projects could generate carbon credits, linking restoration needs with international buyers through the carbon market.
On cross-border cooperation, Lee highlighted that Japan and Mongolia have already laid a foundation for collaboration under Article 6 of the Paris Agreement. Green Carbon is exploring pathways like the Joint Crediting Mechanism (JCM) to connect Mongolian grassland and other restoration projects with carbon credit demand in Japan. However, transforming restoration projects into viable carbon assets involves significant technical hurdles. Lee pointed out that methodologies for Mongolian grassland restoration are still under development, and projects must address baseline setting, additionality, soil carbon measurement, and Monitoring, Reporting, and Verification (MRV), while also considering risks like carbon leakage and permanence. To this end, Green Carbon is conducting feasibility studies in Mongolia, partnering with local herder communities, universities, research institutions, digital MRV experts, and government bodies to establish the technical and institutional groundwork for future grassland carbon projects.
Beyond technicalities, carbon credits are not the sole criterion for potential buyers. Lee emphasized that purchasers also evaluate credit quality, delivery capability, cost, and whether the project creates tangible benefits for local communities beyond emission reductions. A significant part of the discussion centered on how herders and local communities can participate in and share the benefits of land restoration. Lee stressed the need to tailor projects to the specific socio-cultural and land-use contexts of different regions in Mongolia, with full engagement from local governments, herders, and community organizations. Exploring mechanisms like benefit-sharing from carbon credit revenue is also crucial to ensure communities benefit more directly from these initiatives.
Addressing the challenge of scaling up restoration, Ilex Lam shifted the focus to financing models and project governance. He argued that large-scale land restoration cannot rely on a single source of capital; it requires cross-sectoral collaboration that links government, private capital, research capabilities, technology, and project execution frameworks to build a more complete financing and governance structure. Citing examples from China, Lam mentioned ecological governance projects that have innovated in resource allocation and governance to reduce the costs of afforestation and restoration while integrating community development into the project design. He also highlighted the potential of digital platforms to connect public participation and funding with tangible ecological projects, using Ant Forest as an example. This platform converts users' green behaviors into online incentives that translate into real-world tree planting and ecological restoration, bridging the gap between public engagement and physical projects.
However, Lam cautioned that public participation or a single funding source is insufficient for creating scalable, investable restoration projects. He underscored the need for a comprehensive lifecycle management system that covers project development, implementation, monitoring, reporting, and traceability. Such a system is essential for quantifying, transparently disclosing, and verifying the environmental and social benefits generated, which in turn builds the trust and data integrity required to attract significant investment at scale.
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