GEF Funding for Adaptation to Climate Change By: Lars Christiansen

1. GEF Funding for Adaptation to Climate Change By: Lars Christiansen Program Assistant - Climate Change Adaptation Global Environment Facility (GEF) Prepared for REC workshop: ‘Adaptation to the Consequences of the Climate Change: progress achieved and capacity building needed’

2. Outline of presentation • Background on the GEF and Adaptation • Relevant funding sources for the region: SPA and SCCF • Priority areas • Current status and funds available • (Examples of projects) • How to apply for GEF funding • From project idea to implementation – brief overview of the GEF project cycle • Key modalities for SPA and the new funds • GEF experience with adaptation and challenges to come • Questions

3. Background on the GEF and Adaptation • The Global Environment Facility (GEF) was established in the early 1990s to provide new and additional financing for projects and programs that would address development needs and at the same time would protect the global environment. • As the financial mechanism of the UNFCCC, the GEF has been working under convention guidance to implement COP decisions on adaptation. • Initial guidance (COP 1, COP4) focused on Enabling Activities such as funds for V&A assessments and capacity building for preparation of national communications. • Recent guidance (COP 7 ) has emphasized implementation – leading to the establishment of the strategic priority for adaptation under the GEF trust fund, and two newly established funds (SCCF and LDCF) operated separately from the GEF Trust Fund.

4. Background on the GEF and Adaptation • General approach: The GEF supports interventions that increase resilience to the adverse impacts of climate change on vulnerable countries, sectors, and communities • The underlying thought behind GEF’s approach is that the adverse impacts of climate change impose an additional cost on vulnerable countries to meet their development goals  GEF supplies the funding to overcome this additional cost. • Total funds made available for Adaptation - $275 M (total pledges) • Adaptation – a suite of complementary Funds • Strategic Priority on Adaptation (SPA) – (GEF Trust Fund) • Least Developed Countries’ Fund (LDCF) – (UNFCCC) • Special Climate Change Fund (SCCF) – (UNFCCC) • Under Discussion • Adaptation Fund of the Kyoto Protocol

5. Background on the GEF and Adaptation Three funding sources for Adaptation under the GEF GEF Assistance to Address Adaptation GEF Trust Fund Strategic Priority Piloting an Operational Approach to Adaptation (SPA) Least Developed Country Fund (LDCF) (implementation of NAPAs) NO GLOBAL BENEFITS Special Climate Change Fund (SCCF) Top priority to Adaptation NO GLOBAL BENEFITS Total: $57M Remaining: $0M Total: $165M Remaining: $135M Total: $50M Remaining: $4M

6. Background on the GEF and Adaptation

7. “Piloting an Operational Approach to Adaptation” (SPA) The SPA was established as a strategic priority under the GEF Trust Fund as response to guidance from UNFCCC at COP7. $50 million initial allocation, currently $46 million have been committed to projects => after an evaluation of the pilot the program will evolve/be replenished. • Primary focus must be on the protection of Global Environmental benefits in the GEF focal areas (Biodiversity, CC mitigation, Land Degradation, International Waters and POPs)  Typically mainstreaming of adaptation into existing (GEF) development/environment project. • Must include on-the-ground pilot adaptation actions (as opposed to pure capacity building and/or studies)

8. “Piloting an Operational Approach to Adaptation” (SPA) • 18 Approved projects – Total $46 million • More projects are approaching – likely that portfolio will be completed late 2007, early 2008. • Primarily targets Africa, South/Southeast Asia and Latin America, but also a few projects in Central and Eastern Europe (Hungary, Albania and Armenia)

9. SPA – Examples of projects in Central and Eastern Europe ALBANIA: Drini-Mati River Delta CC Vulnerabilities: • More frequent and longer flooding events in coastal zone  severe stress on unique biodiversity depending on the delta ecosystem. ↓ Adaptation Actions: • Development of monitoring and forecasting capacity • Mainstreaming of adaptation concerns into conservation and development plans, programs and policies (e.g. the plan to expand the protected area). • A suite of pilot adaptation actions to promote learning and upscaling (to be identified). ↓ Outcomes: • Adaptation concerns are integrated into all coming conservation and development efforts in the DMRD, thus increasing the CC resilience of a key global ecosystem

10. HUNGARY: Lake Balaton SPA – Examples of projects in Central and Eastern Europe CC Vulnerabilities: • Negative water balance leading to falling water level in shallow lake. Complex causes, but CC thought to be important contributor. • Unique biodiversity as well as agricultural and tourism economies under pressure. ↓ Adaptation Actions: • Capacity building to increase understanding of watershed and lake processes in response to climate change • Strengthened organizational and individual capacities for interpreting and addressing approaching CC vulnerabilities • Adaptation mainstreamed into all policies and planning for the lake area • A suite of local pilot activities to facilitate learning and replication. ↓ Outcomes: • A better understanding of the Lake Balaton system in relation to CC (ecological and socio economic aspects) , and how to effectively implement policy-making and adaptation measures in this context.  Decreased CC vulnerability of ecosystems and local economies

11. Special Climate Change Fund (SCCF) • The SCCF was created as a special fund under the UNFCCC, administered by the GEF, but separately from the GEF Trust Fund. (a) top priority: adaptation • Targets human development in the following priority areas: Water, land management, agriculture, health, infrastructure development, fragile ecosystems, integrated coastal zone management, disaster risk management and prevention • Total resources for adaptation, including new pledges: $57 million • All resources have been programmed

12. Special Climate Change Fund (SCCF) • 10 projects approved or under approval – Total $48 million • Pipeline currently holds some $65 million worth of additional projects, and due to lacking replenishment the pipeline is currently closed for new submissions. As soon as funds become available the pipeline will reopen. • All non-annex I countries are eligible, but funding has this far primarily been directed to low income countries in Africa, Asia and Latin America. No current projects in Central and Eastern Europe although several countries would be eligible.

13. How to apply for funding through the SPA/SCCF • The GEF Trust Fund and SCCF/LDCF works with 10 implementing GEF agencies: AfDB, ADB, EBRD, FAO, IDB, IFAD, UNDP, UNEP, UNIDO and WB. • Projects must be submitted through GEF agencies. • For Medium Sized Projects (< $2 million), projects are submitted and approved on a rolling basis. • For Full sized projects (> $2 million), projects are submitted in certain windows every 3 months for inclusion in a work program approved by the GEF council. • The GEF Secretariat reviews proposals on a rolling basis, and usually makes a decision within 10 days of receiving proposals.

14. From project idea to implementation • Formulation of project idea – What is it that needs to be done differently because of global warming, and how do we go about doing it?? • Consultation with GEF agency • Submission of PIF (3-4 pages briefly describing the project idea, structure and outcomes of the proposed project) • GEF secretariat reviews PIF, and ensures that project conforms to the criteria of the fund • Project is approved by the GEF CEO and Council • (Optional submission of request for project preparation funding) • Submission of final project document • GEF secretariat reviews final project document, and ensures that project conforms to criteria of fund and lives up to GEF fiduciary standards. • Project is endorsed by GEF CEO and Council • Implementation starts

15. GEF TRUST FUND: (SPA) Incremental cost Global benefits RAF (but not in SPA!) Co-financing FULL COST: Existing development financing (resources already present in the country) can be used as co-financing New FUNDS: (LDCF & SCCF) Additional cost Sliding scale (optional) NO RAF NO Global benefits Stand alone activities are possible (but rare) FULL COST: Existing development financing (resources already present in the country) can be used as co-financing Modalities for SPA and new funds

16. Additional/incremental costs approach The additional/incremental cost approach includes: • A baseline scenario => what development activities would be undertaken also in absence of cc (baseline costs) • An adaptation scenario => which includes additional activities to be implemented to address the adverse impacts of climate change in the vulnerable sector selected for the project (baseline costs + additional costs) • Eligible funding = Adaptation scenario costs – baseline scenario costs • For the SCCF a sliding scale may be used to simplify the determination of additional costs

17. Adaptation – some experiences from GEF • How to estimate the costs of adaptation? Additional costs sounds simple on paper, but is anything but simple in a complicated reality. • The challenge is not so much how to improve the quality and funding for individual adaptation projects, but rather how to mainstream adaptation concerns into general development and policymaking. • More information, data and experiences are definitely needed…but many existing good practices and local knowledge to cope with current climate stresses already exists => there is enough knowledge and expertise on the ground to start implementing adaptation!

18. THANK YOU FOR YOUR ATTENTION! GEF Adaptation-related papers: www.thegef.org GEF projects database: www.gefonline.org