Tunis, July 18, 2012

LDCF and SCCF Two Convention Funds on adaptation managed by the GEF

Why finance adaptation?

• Convention guidance • GEF Trust Fund does not

support adaptation under GEF-5

Purpose • Bridge time between now and the launch of the new financial architecture under the Climate Convention • Mobilize scaled up and predictable resources

2

GEF Assistance to

Address Adaptation

GEF Trust Fund

Strategic Priority

on Adaptation

(SPA)

adaptation action

with GEBs

Total: $50M Total: $534M Total: $241M

GEF Trust

Fund

UNFCCC climate

change funds

Kyoto

Adaptation Fund

Estimate $80-300

million/year

Secretariat services

for the AF provided

by GEF on an

interim basis.

Background on the GEF and Adaptation*

Adaptation Fund

(AF)

Adaptation in KP

developing I

parties

NO GLOBAL

BENEFITS

Special Climate

Change Fund

(SCCF)

Top priority to

Adaptation

NO GLOBAL

BENEFITS

Least Developed

Country Fund

(LDCF)

(implementation

of NAPAs)

NO GLOBAL

BENEFITS

*As of May 31, 2012

LDCF and SCCF: Main Features

LDCF and SCCF follow GEF

procedures except for when the LDCF?SCCF Council decides otherwise in response to Climate COP guidance

Examples: No Incremental Cost No Global Environmental

Benefits (GEBs) No cofinancing No RAF/STAR allocations

–

4

LDCF and SCCF: Main Features

LDCF and SCCF are Voluntary

Funds LDCF supports the special needs of the LDCs under the Convention: Preparation and implementation of National Adaptation Programmes of Action (NAPAs) • streamlined project cycle, sliding

scale • equitable access • ongoing dialogue and training

workshops with LDCs SCCF finances two programs: A. Adaptation B.Technology Transfer

–

5

Climate Change Adaptation: Goals and Mandate in the Context of Each Fund

Goal: To finance concrete adaptation actions that increase resilience to climate change of vulnerable countries

6

Mandate & COP Guidance – LDCF (Decisions 7/CP.7; 28/CP.7; 3/CP.11)

7

• LDCF established under UNFCCC at COP7 2001, managed by the Global Environment Facility (GEF)

• Addresses the special needs of the Least Developed Countries (LDCs)

• Priority: to finance the preparation and the implementation of NAPAs

• NAPAs identify “urgent and immediate needs”

specific guidelines provided by the Least Developed Countries Expert Group (LEG)

• LDCF operational guidelines developed consistent with specific guidance COP11

Mandate & COP Guidance – SCCF (Decisions 7/CP.7; 5/CP.9)

8

• SCCF established under UNFCCC at COP7 2001, managed by the Global Environment Facility (GEF)

• 4 different windows, financing through 2 so far:

• Adaptation

• Transfer of technologies (for adaptation and mitigation)

• Energy, transport, industry, agriculture, forestry, and waste management

• Economic diversification

Governance – LDCF and SCCF (Council Decisions: GEF/C.19/6; GEF/C.29/5)

9

• GEF functions under the guidance of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP):

• policies and procedures and the governance structure of the GEF apply to the climate change funds

• LDCF/SCCF Council:

• decides if it is necessary to modify policies and procedures to respond better to COP guidance

• All GEF documents regarding the governance of the LDCF and SCCF : www.thegef.org

Access to Resources – LDCF

• Eligibility – all LDCs

• Resources available per LDC:

Equitable Access Balanced Access

• Ensuring funding for implementation will be available to all LDCs

• No first-come, first-served

• Upwardly moving ceiling per LDC • Currently at US $20 million per country

10

Priorities – LDCF

• NAPA: Project/Program resources can be accessed after NAPA has been submitted

• NAPA priorities guide eligibility of activities proposed

11

Priorities – LDCF

12

Status of Pledges – LDCF

• Status of pledges: US $ 540,242,191*

• Pledges by donor**

• No. of donor

countries: 25

* June 30, 2012

** January 31, 2012

13

Germany $149,482,660

28%

United Kingdom

$65,364,563 12%

United States

$55,000,000 10%

Sweden $42,397,294

8%

Australia $32,953,583

6%

Denmark $29,791,251

6%

Canada $29,654,525

6%

Belgium $26,568,918

5%

Norway $21,711,130

4%

Netherlands, $15,358,462, 3%

Other donor countries

$64,828,375 12%

Status of Pledges – LDCF

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 (blank)

Mil

lio

ns Cumulative amount in USD

Access to Resources – SCCF

• Eligibility – all developing countries (i.e. non-Annex I)

• Based on National Communications and other relevant studies

• SCCF demand is much greater than supply of funding

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Convention Priorities – SCCF

• Funding projects in following areas:

(a) Water resources management;

(b) Land management;

(c) Agriculture;

(d) Health;

(e) Infrastructure development;

(f) Fragile ecosystems (including mountain ecosystems); and

(g) Integrated coastal zone management. monitoring of diseases and vectors affected by climate change, disease

control and prevention.

16

Status of Pledges – SCCF • Status of pledges: US $ 241,052,273*

• Pledges by donor**

• No. of donor

countries: 15

* June 30, 2012

** January 31, 2012

Germany 78,013,050

33%

United States 30,000,000

13% Norway 25,658,454

11%

United Kingdom 15,562,991

7%

Canada 13,344,536

6%

Belgium 12,998,492

6%

Spain 11,698,643

5%

Italy 10,000,000

4%

Denmark 8,741,564

4%

Finland 7,217,798

3%

Switzerland 6,974,339

3%

Sweden 5,909,030

2%

Netherlands 3,119,638

1%

Ireland 2,125,000

1%

Portugal 1,390,839

1%

Status of Pledges – SCCF

0

25

50

75

100

125

150

175

200

225

250

275

300

2004 2005 2006 2007 2008 2009 2010 2011 2012

Mil

lio

ns

What exactly do LDCF/SCCF finance?

• Additional Cost = Full Cost of Adaptation

• Adaptation in context of development

• Cofinancing = Baseline Project = BAU Development

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Features of LDCF/SCCF Additional Cost

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.

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Features of LDCF/SCCF Co-financing

Co-financing:The full cost of adaptation is always covered by

GEF/LDCF/SCCF. ‘Co-financing’ may therefore be better termed ‘existing (baseline) financing’ for the additional cost to be covered by GEF/LDCF/SCCF.

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

Stand alone adaptation financing (full cost) is also accepted. 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

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7 Myths of Adaptation

Myth #1: Adaptation financing is insignificant

• LDCF and SCCF are on the path to raise US $1 billion in pledges

• GCF is negotiated to provide US $100 billion/yr.

• Adaptation and mitigation will be given same weight

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7 Myths of Adaptation

Myth #2: Adaptation projects are small

• Average size of grant > US $ 5 M

• Recently size of grant has been increasing

• The trend is towards scaling up, programmatic approaches, sector-wide interventions, maximizing the impacts

• LDCF/SCCF continue to support CBA

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7 Myths of Adaptation

Myth #3: Adaptation is only capacity building or research

• Concrete adaptation actions, brick and mortar

• CB only as needed, research part of PPG

• Ultimate result: changes in the reduction of hazard, exposure, or vulnerability REDUCTION OF CLIMATE RISK

24

7 Myths of Adaptation

Myth #4: Adaptation is expensive

• Adaptation will not be cheap • However, the estimates inflate the adaptation costs

figure (confusing after disaster relief and compensation with adaptation and BAU development baseline with adaptation)

• LDCF and SCCF have made resilient • $1.5 B for LDCF, with $317 M for adaptation • $1.25 B for SCCF with $162 M for adaptation

• Long term it is cost-effective, because of avoided losses due to impacts of climate change

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7 Myths of Adaptation

Myth #5: Conventional Development is Adaptation

• Development can be maladaptation

• Conventional development does not yet take into consideration CC risks and impacts and does not systematically include adaptation measures

• LDCF and SCCF are bridging this gap – by financing the integration of adaptation into development

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7 Myths of Adaptation

Myth #6: Adaptation is not well-defined or understood

• LDCF and SCCF financing is based on a clear definition of adaptation in practice

• Climate change is no longer a “new issue”

• Much science and a body of practice is available

• Even in absence of full information on climate risks, we can make decisions that will increase the likelihood of resilience

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7 Myths of Adaptation

Myth #7: Adaptation cannot be measured

• While it may take time to measure results, LDCF /SCCF have a RBM system for measuring and tracking adaptation results

• Adaptation Monitoring And Tracking (AMAT) – a pioneering tool

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End of Session 1

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