CLIMTRAIN Workshop: ‘GEF Funding for Climate Change’ IFAD HQ – Rome July 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: $ 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: $ million/year ( )  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 Fund Strategic 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 Adaptation NO GLOBAL BENEFITS Total: $50M Total: $180MTotal: $90M Adaptation Fund (AF) Adaptation in KP developing I parties NO GLOBAL BENEFITS GEF Trust Fund UNFCCC climate change funds Kyoto Adaptation Fund Estimate $ 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.

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)

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 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 Funds Additional 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 Funds Additional 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: $5mil – GEF 25%.

Features of Climate Change Funds Co-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 : $ million/year

Thank you

THANK YOU FOR YOUR ATTENTION! GEF Adaptation-related papers: GEF projects database: