Financing Adaptation Action

GEFFI NANC I NG ADAPTATION ACTION

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The GEF finances adaptation

to help meet development goals

in a changing climate.

The Global Environment Facility(GEF) unites 178 member governments – in partner-ship with international institutions, nongovernmentalorganizations (NGOs), and the private sector – toaddress global environmental issues. An independentfinancial organization, the GEF provides grants todeveloping countries and countries with economiesin transition for projects related to biodiversity, cli-mate change, international waters, land degradation,the ozone layer, and persistent organic pollutants.These projects benefit the global environment, link-ing local, national, and global environmental chal-lenges, and promoting sustainable livelihoods.

Established in 1991, the GEF is today the largest fun-der of projects to improve the global environment.The GEF has allocated $7.4 billion, supplemented bymore than $28 billion in cofinancing, for more than1,980 projects in more than 160 developing countriesand countries with economies in transition. Throughits Small Grants Programme (SGP), GEF has also made

more than 7,000 small grants directly to nongovern-mental and community organizations.

The GEF partnership includes ten agencies:U.N.Development Programme (UNDP); U.N. EnvironmentProgramme (UNEP); World Bank; U.N. Food andAgriculture Organization (FAO); U.N. IndustrialDevelopment Organization (UNIDO); AfricanDevelopment Bank (AfDB); Asian Development Bank(ADB); European Bank for Reconstruction andDevelopment (EBRD); Inter-American DevelopmentBank (IDB); and International Fund for AgriculturalDevelopment (IFAD). The Scientific and TechnicalAdvisory Panel (STAP) oversees the technical and sci-entific quality of GEF’s policies and projects.

GEF and Global Environmental Conventions

The GEF is a financial mechanism for implementingthe international conventions on biodiversity, climate

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change, and persistent organic pollutants. The GEF isalso a financial mechanism for the Convention toCombat Desertification and collaborates closely withother treaties and agreements.

A Sample of GEF’s Impact on Climate Change

Mitigation n More than 1 million rural households are powered

by solar home systems using photovoltaic tech-nology. Wind-power generation capacity alsoincreased from zero to over 1,700 megawatts –enough to power more than 5 million typicalhomes. India alone now has 40,000 solar street-lights.

n Five million energy efficient lights have beeninstalled. In Poland, the number of householdsusing compact fluorescent lighting increasedfrom 11 percent to 20 percent.

n GEF energy projects approved in 2003-2006, whichinclude renewable energy and energy efficiencyprojects, will directly reduce emissions of green-house gases by 388 million tons over their life-time. These projects are also conservativelyestimated to have an indirect impact: 1,726 to 3,176million tons of greenhouse gas emissions will beavoided over the lifetime of the investments.

Adaptationn The GEF has provided $280 million for adaptation

to climate change through the Strategic Priorityfor Adaptation, Least Developed Countries Fund,and the Special Climate Change Fund.

H I S T O R Y O F G E F S U P P O R TF O R A D A P TAT I O N

Following guidance from the U.N. FrameworkConvention on Climate Change (UNFCCC), the GEForiginally adopted a “staged approach” toward adaptation. Stage I encompasses assessments andStage II focuses on capacity building.

Also of note is that GEF has financed vulnerability and adaptation assessments through its support ofNational Communications under the UNFCCC. Since its inception, the GEF has disbursed about $120 millionfor National Communications, of which a significantamount is allocated by the countries to vulnerabilityand adaptation assessments.

In addition, the GEF-financed projects under Stages Iand II have built the capacities of developing coun-tries, and especially small island states, to gather andprocess data. The projects have also helped establish

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GEF Assistance to Address Adaptation

SPA:GEF Trust Fund Strategic Priority

Piloting an OperationalApproach to Adaptation

SCCF:Special Climate Change Fund

Top Priority to Adaptation

LDCF:Least Developed Country Fund

(preparation and implementationof NAPAs)

the institutional and local capacities to move to thenext step and start implementing adaptation proj-ects on the ground.

The GEF received the mandate from the ClimateConvention in 2001 to finance adaptation projects onthe ground. Thanks to this guidance, the GEF beganpiloting adaptation action under three financingavenues: 1) Strategic Priority on Adaptation (SPA), a$50 million pilot within the GEF trust fund; 2) LeastDeveloped Countries Fund (LDCF) whose resourcesare accessible only to the 49 Least DevelopedCountries (LDCs); and 3) Special Climate Change Fund (SCCF), whose resources are accessible to alldeveloping countries. The funds integrate adaptationmeasures into development practices.

F I N A N C I N G A D A P TAT I O NA C T I O N : T H E N E W C L I M AT EC H A N G E F U N D S

Strategic Priority on Adaptation

The SPA was a groundbreaking initiative, not onlywithin the GEF context, but also worldwide, becauseuntil that time multilateral and bilateral organiza-

tions had mainly focused on research, assessments,and screening tools, rather than on-the-ground adap-tation. Through this program, the GEF has financedthe first concrete adaptation projects, implementingmeasures for the specific purpose of reducing vulner-ability and increasing the adaptive capacity of vul-nerable communities and the ecosystems on whichtheir lives depend.

The following examples illustrate the types of adapta-tion projects that the GEF has financed through the SPA.

Caribbean Islands (Dominica, St. Lucia, St Vincent, andGrenadines). Small island states are highly vulnerable to the impacts of climate change becauseof their susceptability to sea level rise, the location ofcritical infrastructure in coastal areas, and given thatmost of the local populations live in coastal zones.This project aims to support Dominica, Saint Lucia,St. Vincent, and Grenadines in their efforts to imple-ment specific pilot adaptation measures addressingthe impacts of climate change on the naturalresource base of the region. It focuses on biodiversityand sustainable land management along coastalareas and sustainable use of fresh water resources.The pilot projects will form the foundation for learn-ing and adaptive capacity building not only in theproject countries, but across the Caribbean region.

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Table 1. Projects Implemented by GEF under Stage II

Project Title Implementing Agency GEF Funding ($million)

Caribbean Planning for Adaptation to Climate Change (CPACC) World Bank 6.5

Pacific Islands Climate Change Assistance Programme (PICCAP) UNDP 3.44

Mainstreaming Adaptation to Climate in the Caribbean (MACC) World Bank 5.345

Capacity Building for Stage II Adaptation to Climate Change UNDP 3.315in Central America

Assessments of Impacts of and Adaptation to Climate Change in UNEP 7.5Multiple Regions and Sectors (AIACC)

China: Targeted Research Related to Climate Change UNDP 1.72

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Table 2. GEF Projects under the Strategic Priority on AdaptationCo-financing

Country/ Project Grant Total (Approved/Region Project Title Agency (approved) Expected)

Kiribati Kiribati Adaptation Program – Pilot World Bank 1,800,000 4,800,000Implementation Phase

Dominica, Implementation of Pilot Adaptation Measures World Bank 2,100,000 3,370,000St. Lucia, in Coastal Areas of Dominica, St. Lucia and St. Vincent and St. Vincent & the GrenadinesGrenadines

Colombia Integrated National Adaptation Plan: High World Bank 5,400,000 9,500,000Mountain Ecosystems, Colombia's CaribbeanInsular Areas and Human Health (INAP)

Argentina, Sustainable Management of the Water UNEP 1,000,000 50,561,962Bolivia, Brazil, Resources of the la Plata Basin with Respect to Paraguay, the Effects of Climate Variability and ChangeUruguay

Global Adaptation Learning Mechanism: Learning By Doing UNDP 723,600 645,000

Hungary Lake Balaton Integrated Vulnerability Assessment, UNDP 985,000 3,090,000Early Warning, and Adaptation Strategies

Kenya, Integrating Vulnerability and Adaptation to UNEP 1,000,000 1,265,000Madagascar, Climate Change into Sustainable DevelopmentMozambique, Policy Planning and Implementation in Rwanda, Southern and Eastern AfricaTanzania

Mozambique Zambezi Valley Market Led Smallholder Development World Bank 1,520,000 21,200,000

Namibia Adapting to Climate Change through the UNDP 960,000 5,795,806Improvement of Traditional Crops and Livestock Farming

Senegal, Adaptation to Climate Change – Responding UNDP 3,300,000 9,729,517Gambia, to Coastline Change and its Human Guinea-Bissau, Dimensions in West Africa through Integrated Mauritania, Coastal Area ManagementCape Verde

Sri Lanka Participatory Coastal Zone Restoration and IFAD 1,919,915 7,569,450Sustainable Management in the Eastern Province of Post-Tsunami Sri Lanka

Global Community Based Adaptation (CBA) Programme UNDP 4,525,140 4,525,140(Bangladesh, Bolivia, Niger Samoa, Guatemala,Jamaica, Kazakhstan, Morocco, Namibia, Vietnam)

Yemen Adaptation to Climate Change Using Agrobiodiversity World Bank 4,000,000 4,080,000Resources in the Rain Fed Highlands of Yemen

Bolivia, Brazil, Integrated and Sustainable Management of UNEP 2,000,000 43,780,000Colombia, Transboundary Water Resources in the Amazon Ecuador, River BasinGuyana,Peru, Suriname,Venezuela

Colombia. Colombia is highly vulnerable to theeffects of climate change over a wide range of sectorsand geographical regions. Melting Andean glacierswill limit water availability for fragile mountainecosystems, agricultural and domestic purposes, andhydroelectricity. Sea-level rise will cause inundationof coastal regions and salt water intrusion, which inturn will lead to the relocation of coastal communi-ties and destruction of coastal ecosystems. This proj-ect aims to address all of these vulnerabilitiesthrough an integrated approach of capacity buildingand local pilot adaptation interventions. This projectalso links mitigation and adaptation. Because ofColombia’s strong reliance on hydropower, timelyadaptive measures in water management could pre-vent or limit the need for replacement power supplyfrom fossil fuels.

Least Developed Countries Fund

To date, the GEF has mobilized $165 million for theLDCF. Developed with the LDCs, this fund applies astreamlined procedure – including principles, modali-ties, and criteria to access the funds – that meets theneeds of the LDCs. The results speak for themselves.Although these countries are some of the poorest inthe world, and the least capable of adapting to theadverse impacts of climate change, 21 of them havealready developed and submitted their NationalAdaptation Plans of Action (NAPAs) and 10 of themhave submitted a concrete adaptation project to theGEF under the LDCF.

The LDCs have made impressive progress towardsreducing their vulnerability to climate change. They

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Table 3. GEF Projects under the Least Developed Countries Fund

Country/ Project Grant Total (Approved/Region Project Title Agency (approved) Expected)

Bangladesh Community Based Adaptation to Climate UNDP 3,000,000 6,080,000Change through Coastal Afforestation

Bhutan Reduce Climate Change-induced Risks and UNDP 3,455,050 3,496,224Vulnerabilities from Glacial Lake Outbursts in the Punakha-Wangdi and Chamkhar Valleys

Eritrea Integrating Climate Change Risks into UNDP 3,000,000 3,460,000Community Based Livestock Managementin the Northwestern Lowlands of Eritrea

Niger Implementing NAPA Priority Interventions to UNDP 1,900,000 4,050,000Build Resilience and Adaptive Capacity of the Agriculture Sector to Climate Change in Niger

Malawi Climate Adaptation for Rural Livelihoods AfDB 3,000,000 24,393,750and Agriculture (CARLA)

Mauritania Reducing Vulnerability of Arid Oasian Zones UNEP 1,630,000 1,400,000to Climate Change and Variability through Improved Watershed Management

Samoa Integrated Climate Change Adaptation UNDP 2,000,000 2,000,000in Samoa (ICCAS)

are now positioned to provide examples of adaptationexperience and lessons learned to other countriesaround the world.

Bhutan. The NAPA for Bhutan highlighted the coun-try’s vulnerability to glacial lake outbursts. As waterlevels increase, critical thresholds can be reached,causing catastrophic flash floods downstream intothe valleys. Such massive flash floods pose a majorthreat to life as well as infrastructure and economyin the affected valleys, such as farming areas. As afollow up to the NAPA, Bhutan has requestedfinancing through the LDCF aimed at reducingBhutan’s vulnerability to glacial lake outbursts. Thisproject has a two-pronged strategy: first, physicalmeasures to artificially lower the water level of crit-ical glacial lakes will be implemented and, secondly,capacities for responding to and predicting disas-ters will be increased through targeted disaster riskmanagement development and installation of earlywarning systems.

Malawi. This country is heavily dependent uponrain-fed subsistence agriculture, with more than 80percent of the population generating their dailylivelihoods from small-scale agriculture. As Malawifaces increasing rates of extreme weather events,such as recurrent floods and droughts, efforts at fos-tering sustainable economic growth and improvedrural livelihoods are put at risk of failing. A LDCFproject is addressing this situation through two keycomponents: a) investments aimed at improvingagricultural practices, land management, and natu-ral systems as well as rural livelihoods through tar-geted adaptation interventions in cropdiversification, cropping sequences, conservationtillage, food storage and irrigation, and efficientwater use; and b) creation of an enabling environ-ment for climate risk management, including activi-ties in policy development and implementation,institutional coordination, and generation of knowl-edge on climate risk management.

Special Climate Change Fund

The SCCF, a special fund established by the UNFCCC,addresses the special needs of developing countriesunder the climate regime. The fund includes fouravenues of financing: (a) adaptation, which is the toppriority; (b) technology transfer; (c) energy, transport,industry, agriculture, forestry and waste manage-ment; and (d) economic diversification. The resourcesfor adaptation now amount to about $65 million.

Bolivia, Ecuador, Peru. Millions of people throughoutthe Andean region depend on run-off from glacialmelting in the highlands for their daily fresh waterneeds. As Andean glaciers are projected to rapidlyrecede over the coming years, fresh water access willbe severely strained in the region, threatening agri-culture, hydro power generation, and health. The GEFhas financed, through the SCCF, a project that willimplement measures to meet the anticipated conse-quences of the catastrophic glacier retreat inducedby climate change. This will be achieved through thedesign and implementation of strategic pilot adapta-tion measures to address key impacts of glacierretreat, including: management plans for potablewater systems in urban areas; promotion of lesswater consuming management practices in the agri-cultural sector; and measures to increase the naturalwater storage capacity of highland ecosystems.

China. The Huang-Huai-Hai (3H) Basin is home tomore than 400 million people and is China’s primeagricultural area. With a high water demand, theregion is sensitive to the decreases in stream flowsand ground water recharges that are projected as animpact of climate change. At the same time, risingtemperatures could increase water demand in theagricultural sector even further, causing major short-ages in water and, ultimately, grain which affects thelivelihoods of millions of people. China has accessedthe SCCF’s resource to implement adaptation meas-ures that will enhance the resilience of agricultural

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Table 4. GEF Projects under the Special Climate Change Fund

Co-financing Country/ Project Grant Total (Approved/Region Project Title Agency (approved) Expected)

Tanzania Mainstreaming Climate Change in Integrated UNDP 1,000,000 1,574,875Water Resources Management in Pangani River Basin

Ethiopia Coping with Drought and Climate Change UNDP 995,000 1,866,667

Mozambique Coping with Drought and Climate Change UNDP 960,000 929,840

Zimbabwe Coping with Drought and Climate Change UNDP 983,000 1,156,000

Guyana Conservancy Adaptation Project World Bank 3,800,000 16,200,000

Kenya Adaptation to Climate Change in Arid Lands World Bank 6,500,000 44,844,681(KACCAL) /UNDP

Bolivia, Peru, Design and Implementation of Pilot Climate World Bank 6,900,000 21,750,000Venezuela) Change Adaptation Measures in the Andean

Region

Ecuador Adaptation to Climate Change through UNDP 3,000,000 6,000,000Effective Water Governance

China Mainstreaming Adaptation to Climate Change World Bank 5,000,000 50,000,000Into Water Resources Management and RuralDevelopment

and water development to climate change in the 3HBasin. This will be achieved through the identificationand pilot demonstrations of a range of adaptationoptions in the agricultural sector: exploration of alter-native water sources; improved efficiency of irrigation;and promotion of alternative (less water-consuming)crops. The project also supports mainstreaming adap-tation into national agricultural planning.

L E S S O N S L E A R N E D F R O MI N I T I A L E X P E R I E N C E O NT H E G R O U N D

The projects described above are some of the first adap-tation projects on the ground worldwide. Designing,preparing, and implementing these projects have beena challenge at different levels, given the various capaci-

ties within countries. Moreover, only a few countrieshad identified the adaptation measures to be imple-mented and were ready to ask for financial support.Through an ongoing dialogue among the countries,the agencies, and the GEF, a momentum was createdon moving from assessments to action. A pipeline ofprojects started to be developed and submitted thatincluded concrete adaptation practices. The result wasa portfolio of projects that includes a combination ofpreparation work and adaptation actions.

To facilitate this process, the GEF staff, in cooperationwith the agencies, developed operational guidelinesconsistent with Convention guidance that could betranslated into project design and implementation.This process included workshops and seminarsamong the GEF, agencies, and vulnerable countries,particularly LDCs and small island states.

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Thanks to the new climate funds, innovativeapproaches are being promoted among the GEFagencies that integrate adaptation into developmentprograms and policies.

From GEF’s early experience on adaptation actions,here are some lessons learned:

A: The capacity and knowledge baseline significantlyvaries among countries. Each country has a uniquesituation that must be taken into account beforedoing an adaptation project. In some cases, a projectwill include preparation work aimed at improvingknowledge, collecting missing data, or better process-ing the data, before acting. All projects, however, even-tually include concrete adaptation actions.

Although there is still a lack of adaptation knowl-edge, climate data, and data processing skills, allcountries, including LDCs, have enough informa-tion to start implementing adaptation actionsand utilizing the SPA, LDCF, and SCCF to financetheir plans.

B: Climate change affects all sectors of development.Adaptation projects financed under these funds areaimed at ensuring that food security, access to drink-ing and irrigation water, sound public health, coastalinfrastructure and other basic needs are preserveddespite a changing climate and future challengesthat have no precedent in human history. The largemajority of projects reviewed under these three pro-grams address the impacts of climate change onagriculture and water supply.

It is clear, from early experience, that adaptation is linked to development and for this reason, wepropose to define adaptation as “climate–resilientdevelopment.”

C: A significant scaling up of adaptation experiencesand much larger resources are needed.

Nevertheless, it is worth noting and taking intoaccount the first results from GEF experience,because these results are concrete and are thefirst interventions on adaptation action on the ground.

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Photo CreditsFront cover: Frank May/dpa/Corbispage 1: Maarten van Aalstpage 8: Jeremy Horner/Corbis

Writers: Bonizella Biagini, Lars Christiansen,Rawleston MooreEditor: Carollyne HutterDesign: Patricia Hord.Graphik DesignPrinting: Jarboe Printing

Copyright November 2007Global Environment Facility1818 H Street NW, Washington, DC 20433

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