INTEGRATING FINANCIAL AND CLIMATE POLICY IN ENSURING SUSTAINABLE DEVELOPMENT OF UKRAINE’S AGRICULTURAL SECTOR: A CONCEPTUAL MODEL OF THE FINANCIAL MECHANISM
Abstract
The article is devoted to the study of theoretical and applied foundations of integrating financial and climate policy to ensure sustainable development of Ukraine’s agricultural sector. Climate change generates systemic risks for agricultural production, which are transformed into financial risks and require the formation of an effective financial mechanism to support climate adaptation. The study identifies key challenges in financial support for climate adaptation in agriculture, including insufficient integration of climate considerations into financial policy, limited access to financial resources, and underdevelopment of climate finance instruments. The research substantiates the necessity of integrating financial and climate policy as a prerequisite for forming an effective financial mechanism for sustainable agricultural development. A conceptual model of the financial mechanism under climate change conditions is developed. The model includes institutional, instrumental, and performance components and reflects the interaction between public authorities, financial institutions, agricultural enterprises, and international organizations. The proposed model ensures coordinated mobilization, allocation, and use of financial resources to support climate adaptation and sustainable agricultural development. It also contributes to improving the resilience of agricultural enterprises to climate risks and strengthening long-term financial stability. The study systematizes financial instruments supporting climate adaptation, including budget financing, preferential lending, agricultural insurance, investment instruments, and green finance tools. Particular attention is given to climate-oriented financial instruments such as green bonds, sustainability-linked loans, climate risk insurance, and blended finance mechanisms. A system of indicators for assessing the effectiveness of financial mechanisms supporting climate adaptation is also proposed. The scientific novelty lies in the development of a conceptual model integrating financial and climate policy to ensure sustainable agricultural development. The practical significance of the results lies in their application in state financial policy, agricultural support programs, and climate adaptation strategies.
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