In terms of innovative mechanisms, economic and financial mechanisms that rely on regulationand markets to provide incentives for environmental stewardship are also relevant. These mechanisms include different types of regulations and direct or indirect payments schemes, for example tradable development rights, trading of emission reduction and payment for environmental services.
Investment based mechanisms, like microfinance, are other types of mechanism that can provide financing for UNCCD and SLM practises.
Undoubtedly, official development aid and resources from affected country budgets are still the largest and most important sources of finance for land management. However, the call reflects the recognition that these are not sufficient to finance a full scale implementation of the UNCCD at the various levels. In addition, innovative finance, as outlined in the Ten Year Strategy, reflects the need to address the inter-sectoral nature of desertification and land degradation, and the often strong role of the private sector in land management.

While providing new opportunities, it is important to recognise that innovative financing is not a panacea for addressing the financial challenges of the UNCCD. Innovative resources often come in small pieces with high transaction costs, and co-financing may be needed. Innovative finance should therefore be regarded as complementary to more traditional sources of funding.

"Innovative financing sources and mechanisms for UNCCD implementation and SLM include “the private sector, market-based mechanisms, trade organizations, foundations, CSOs, and other financing mechanisms, for climate
change adaptation and mitigation, biodiversity, conservation and sustainable use, and the fight against hunger and poverty.”

Accordingly, the terminology ’innovative financing for the UNCCD and sustainable land management (SLM)’ can be considered as an umbrella covering a range of sources, mechanisms and instruments, as well as related processes and thematic areas through which funding can be mobilised for UNCCD implementation and SLM. These includes i) actors and institutions, ii) investment based mechanisms, iii) incentive and market based mechanisms, and iv) thematic
entry points for finance. Examples of mechanisms within these categories are illustrated in Annex I.

It is important to note that the different sub-groups of innovative financing sources and mechanisms are often linked. Private sector and CSOs are for example important partners and actors setting up market based mechanisms. It is also understood that what is regarded “innovative” will vary from country to country. And more “innovative” or “new” opportunities for financing emerge from the ever changing international context. It is therefore important to be vigilant, monitor processes and seize opportunities when they arise.

Submissions from Parties:
• Canadian submission on innovative financial mechanisms
• EU submission on innovative financial mechanisms
• India submission on innovative financial mechanisms
• Japan submission on innovative financial mechanisms
• Mexico submission on innovative financial mechanisms
• Moldova submission on innovative financial mechanisms
• Norway submission on innovative financial mechanisms
• Russia Academy of Sciences submission on innovative financial mechanisms

Submissions from Relevant Organizations and Initiatives
• OECD submission on innovative financial mechanisms
• GDI submission on innovative financial mechanisms
• IUCN submission on innovative financial mechanisms
• UNCCD/GM submission on innovative financial mechanisms
• BBOP submission on innovative financial mechanisms
• TNC submission on innovative financial mechanisms
• CEEweb for Biodiversity submission on innovative financial mechanisms
• IFRIK submission on innovative financial mechanisms
• Global Forest Coalition submission on innovative financial mechanisms
• Forest Peoples Programme submission on innovative financial mechanisms