Land-based financial tools for urban climate change adaptation and mitigation: evidence from Ethiopia

Abstract

Cities worldwide face major climate finance gaps, while land-based financing remains underutilized. This study assessed the practices, opportunities, and challenges of using land-based financial tools for climate action in Bahir Dar City, Ethiopia. Using ten years of land lease and property tax data, surveys of 103 experts, 18 interviews, and six focus groups, the study found that land value capture (LVC) tools generated substantial revenue, with land leases contributing an average of 55% of municipal revenue and fully funding climate projects. Despite opportunities, challenges such as corruption, weak institutions, limited technology, and informal settlements require stronger governance and policy support.