CLIMTRAIN Workshop: ‘GEF Funding for Climate Change’ IFAD HQ – Rome July 24-25 Bonizella Biagini Cluster Coordinator for Climate Change Adaptation Global.

CLIMTRAIN Workshop:

‘GEF Funding for Climate Change’IFAD HQ – Rome July 24-25

Bonizella Biagini Cluster Coordinator for Climate Change Adaptation

Global Environment Facility

Estimated supply and demand for mitigation and adaptation funding in developing countries – a brief overview

MITIGATION

DEMAND

UNFCCC estimate: $200-210 billion by 2030

SUPPLY

$3.3 billion allocated to mitigation projects in GEF since 1991

World Bank Clean Investment Funds and other donors’ initiatives

ADAPTATION

DEMAND

World Bank estimate: $10-40 billion/year

Oxfam: $50 billion/year and ‘far higher if greenhouse-gas emissions are not cut rapidly’

SUPPLY

SPA, SCCF and LDCF: $295 million over the last 5 years

AF: $80-300 million/year (2008-2012)

World Bank Clean Investment Funds and other donors’ initiatives

CLIMATE CHANGE Strategic Programs - Mitigation $1 billion/ 4years

Energy Efficiency> Promoting energy efficiency in residential and commercial

buildings

> Promote energy efficiency in industrial sector

Renewable Energy> Promote market approaches for renewable resources

> Promote sustainable energy from biomass

Sustainable Transport> Promote sustainable, innovative systems for urban transport

LULUCF> Manage land-use, land-use change and forestry to protect

carbon stocks and reduce GHG emissions

Examples of LULUCF and Biomass Projects

Village-Based Management of Woody Savanna and the Establishment of Woodlots for Carbon Sequestration

Global: Alternatives to Slash and Burn Agriculture (II) Global: Alternatives to Slash and Burn Iran: Carbon Sequestration in the Desertified

Rangelands of Hossien Abad, South Khorasan, through Community-based Management

Sudan: Community Based Rangeland Rehabilitation for Carbon Sequestration

Belarus: Biomass Energy for heating and Hot Water Supply

Peru: Biofuels and non-wood cellulose fiber from agriculture residues/waste

Background on the GEF and Adaptation

Four funding sources for Adaptation under the GEF

GEF Assistance to Address Adaptation

GEF Trust FundStrategic Priority

on Adaptation (SPA)

adaptation action with GEBs

Least Developed Country Fund

(LDCF)(implementation

of NAPAs)NO GLOBAL BENEFITS

Special Climate Change Fund

(SCCF)Top priority to

AdaptationNO GLOBAL BENEFITS

Total: $50M Total: $180M Total: $90M

Adaptation Fund (AF)

Adaptation in KP developing I

partiesNO GLOBAL BENEFITS

GEF Trust Fund

UNFCCC climate change funds

Kyoto Adaptation Fund

Estimate $80-300 million/year

“Piloting an Operational Approach to Adaptation” (SPA)

SPA Projects should: “Show how adaptation planning and assessment can be practically translated into projects that provide real benefits”.

• SPA Projects should primarily target Global Environmental Benefits under the GEF focal areas, whereas the other GEF administered fonds have development as their primary focus.

• $50 million allocation as of May 2008 all funds have been allocated following an internal evaluation of the pilot, the program will evolve.

• A total of 21 adaptation projects have been approved for support through the SPA.

“Piloting an Operational Approach to Adaptation” (SPA)

18 Approved projects – Total $47 million

Remaining $3 million is being programmed – once portfolio is completed the SPA will be reviewed and potentially replenished by the GEF Council.

Primarily targets Africa, South/Southeast Asia and Latin America, but also a few projects in Central and Eastern Europe.

SPA - Commited projects - by region

MENA12%

GLO14%

ECA7%

AFR18%

LAC28%

Asia 21%

SPA Commited Projects - by sector

Biodiversity40%

Land Degradation

34%

International Waters

12%

Cross Sectoral

13%

Climate Change

1%

Least Developed Countries Fund (LDCF)

LDCF projects support the implementation of National Adaptation Plans of Action (NAPAs) which identifies ‘urgent and immediate adaptation needs’ in each LDC.

• The LDCF has so far supported the preparation of NAPAs in 47 LDCs and will also support implementation of priority actions identified in completed NAPAs.

• As of May 2008, 32 NAPAs have been completed, and 10 implementation projects have been approved for LDCF funding.

• Existing resources, including new pledges: $180 million applying a principle of equal access this translates into roughly $3.7 million pr. country.

Least Developed Countries Fund (LDCF)

LDCF - Committed funds - Regional distributionBy funding

AFR60%

Asia32%

Pacific 8%

LDCF - Commited funds - Sectoral distribution - By funding

Coastal Management

8%

Agriculture/ food security

46%

Water management

33%

Disaster manage-

ment 13%

Least Developed Countries Fund (LDCF)

Special Climate Change Fund (SCCF)- Top priority under UNFCCC decision = (a) adaptation

SCCF adaptation projects support the implementation of adaptation actions in non-annex I parties.

• Priority areas: water, land management, agriculture, health, infrastructure development, fragile ecosystems, integrated coastal zone management, disaster risk management and prevention

• Total resources under the SCCF program for adaptation, including new pledges: $90 million.

• Demand greatly exceeds available funding, forcing a temporary freeze for new SCCF projects.

• As of May 2008, 10 projects have been approved for support under the SCCF. Future funding opportunities depend on donor contribution.

Special Climate Change Fund (SCCF)- Top priority under UNFCCC decision = (a) adaptation

SCCF - Commited funds - Sectoral distribution - By funding

Water management

56%

Agriculture/ food security

32%

Coastal Management

12%

SCCF - Committed funds - Regional distributionBy funding

AFR42%

LAC58%

Asia 17%

Special Climate Change Fund (SCCF)

Features of Climate Change Funds

GEF TRUST FUND: (SPA)

Incremental cost Global benefits RAF Co-financing

UNFCCC FUNDS: (LDCF & SCCF)

Additional cost Sliding scale (optional) NO RAF NO Global benefits Different approach to

co-financing

Features of Climate Change FundsAdditional costs/Sliding Scale

Additional Cost - Definition: the costs imposed on vulnerable countries to meet their immediate adaptation needs (Decision 3/CP.11)

The additional 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)

The LDCF will finance only the additional costs imposed on vulnerable LDC countries to meet their (urgent and immediate) adaptation needs, as identified by their NAPAs.

Features of Climate Change FundsAdditional costs/Sliding Scale

Sliding Scale: An OPTION introduced to simplify the

determination of additional costs, especially for smaller projects.

Instead of determining additional costs through a complete baseline/alternative scenario analysis, additional costs are estimated as a percentage of total project funding request, with the LDCF/SCCF funding a proportionately larger share of smaller projects, and a smaller share of larger projects (with the remaining funding to be leveraged in co-financing). E.g. under the SCCF the steps are: <$1mil – GEF 50%, $1mil-$5mil – GEF 33%, >$5mil – GEF 25%.

Features of Climate Change FundsCo-financing

Co-financing: The full cost of adaptation is always covered by GEF/LDCF/SCCF. ‘Co-financing’ may therefore be better termed ‘baseline financing’ for the adaptation cost to be covered by

GEF/LDCF/SCCF.

Co-financing refers solely to funding already present in the recipient countries in the form of development projects, national investments etc, no additional funds need to be raised for the purpose of adaptation.

Stand alone adaptation financing can be acceptable. In practice, however, this will be very rare, as most LDCF/SCCF projects and activities are usually based in a context of human and socioeconomic development with an added element of CC adaptation.

Bhutan: Reduce CC-induced Risks and Vulnerabilities from Glacial Lake Outbursts in the Punakha-Wangdi and Chamkar Valleys (LDCF)

LDCF/GEF amount: $3.64M

CC Vulnerabilities: Glacial lakes reaches critical threshold as

Himalayan glaciers melt massive flashfloods in river valleys

↓Adaptation Actions: Increase disaster risk management

capacity in affected valleys Artificial lowering of water level in glacial

lakes Creation of an Early Warning System for

glacial flashfloods ↓

Outcomes: Decreased risk of massive destruction

from glacial flash floods Limitation of human and economic loss

if/when catastrophic flash floods occur

Malawi:Climate Adaptation from Rural Livelihoods and Agriculture

(LDCF)

LDCF/GEF amount:: $3.00 million

CC Vulnerabilities: Drought and rainfall variability will pose

risks to the agricultural sector and food security

↓Adaptation Actions: Targeted adaptation pilots including

• Crop diversification• Improved cropping sequences• Conservation tillage• Irrigation and efficient water use• Food storage

Creation of an enabling environment for Climate Risk Management

• Policy development and implementation

• Institutional coordination• Generation of knowledge and

awareness raising ↓

Outcomes: Increased food security and sustainable

agricultural development

Cambodia: Building Capacities to Integrate Water Resources Planning in

Agricultural Development (LDCF)

LDCF/GEF $1.85M

CC Vulnerabilities: Increased drought and/or flooding poses

risk to agricultural sector and food security

↓Adaptation Actions: Training of ‘adaptation experts’ in

agricultural extension teams a Implementation of pilot projects in local

communities • Rainwater harvesting techniques • Measures to decrease soil erosion

and preserve genetic diversity in rice agriculture

• Changed design of reservoirs and irrigation channels to prevent risks from increased peak flows

Lessons learned disseminated to national and international levels

↓Outcomes: Increased food security and sustainable

agricultural development Reduced risks of climate induced

disasters

Regional (Government of the Cook Islands, Federated States of Micronesia, Fiji, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands,

Tonga, Tuvalu and Vanuatu, Marshall Islands, Palau:Pacific Adaptation to Climate Change (SCCF)

SCCF/GEF amount:: $13.125M

CC Vulnerability Decreased water availability Decreased food production Loss of land and coastal infrastructure

↓Adaptation Actions Raising of awareness and capacity for

climate change risks at all levels. Locally relevant pilot measures

including:• Innovative farming and water

management techniques• Introduction of new crops better

suited to changed climate conditions

• Installation of breakwater at important harbors

• Climate proofing of existing roads↓

Outcomes: Negative effects of climate change on

local livelihoods and economy minimized.

Adaptation Fund

AF was established in 2001 at COP7 under the Kyoto Protocol

The AF will support concrete adaptation projects in developing countries that are Parties to the KP

To be funded by the 2% of the proceeds of the Clean Development Mechanism (CDM) and by voluntary contributions

Adaptation Fund

The AF has innovative features including:

• An independent governing Body (AFB) where the majority of the members are representatives from developing countries

• The majority of financial resources come from two percent of the proceeds of the CERs of CDM projects

• Parties can access resources directly from the fund or trough implementing agencies

Adaptation Fund: the way forward

• Details regarding priority sectors, eligibility criteria and administrative processing of AF projects, will be determined during upcoming Adaptation Fund Board meetings (June and November 2008).

• GEF was selected as interim secretariat• WB as interim trustee

• Two meetings have been held so far

• UNFCCC estimate of available funding for period 2008-2012: $80-300 million/year

Thank you

THANK YOU FOR YOUR ATTENTION!

GEF Adaptation-related papers: www.thegef.org

GEF projects database:www.gefonline.org