GEF Investment in Climate Change Mitigation and Sound Chemicals Management. Dr. Ming Yang Sr. Environment Economist / Climate Change Specialist [email protected] Global Environment Facility October 5, 2011 Trinidad (Prepared in September, 2011). Outline. The GEF - PowerPoint PPT Presentation
Slide 1GEF Investment in Climate Change Mitigation and Sound
Chemicals Management
Dr. Ming Yang Sr. Environment Economist / Climate Change Specialist
[email protected]
Global Environment Facility
The GEF
GEF’s 20 Years’ Investment in Climate Change Mitigation and Sound
Chemicals Management
GEF 5 Resources and Strategy in Climate Change Mitigation and
Chemicals Investment
Case Studies on GEF Investments
Key Points in GEF5 Project Development
Outline
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GEF’s Operation:
Based in Washington, D.C, the GEF Secretariat reports directly to
the GEF Council and Assembly, ensuring that their decisions are
translated into effective actions.
GEF’s Mission: A mechanism for international cooperation for the
purpose of providing new, and additional, grant and concessional
funding to meet the agreed incremental costs of measures to achieve
agreed global environmental benefits
The GEF is the Financial Mechanism of the UNFCCC, CBD, Stockholm
Convention, UNCCD and the Nagoya Protocol. The GEF also provides
assistance to International Waters and the Montreal Protocol. The
GEF provides Secretariat Services to the Adaptation Fund
Board.
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182 participating countries, private sector, and civil
society
10 Agencies
Under the Ongoing Reforms of the GEF, additional agencies,
including qualified National Entities will be added to the GEF
Agencies.
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GEF 20 Years’ Investment in Climate Change Mitigation and
Chemicals
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20 Years – Financing for Climate Change Mitigation
GEF Trust Fund invested about US$3 billion in over 150
countries
Mitigation
Adaption
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$ 187 million in ODS
$ 426 million in POPs
Catalytic
Leveraged more than US$18 billion in co-financing on its US$3
billion of investments in CC
Leveraged more than US$875 million in co-financing on its US$ 613
million of investments in ODS/POPs
US$ 179 in ODS
US$ 696 in POPs
Over 2.5 billion tonnes of CO2 avoided
The ODS portfolio of the GEF additionally eliminated 1.155 GT of
CO2 Equivalent.
About US$ 1.2 per ton CO2
20 Years – Catalyzing investment
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You may need to revise the cost effectiveness figure with the value
of reduction from the ODS Portfolio.
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Latin America 160
Regional 13
Global 49
Africa Asia East Europe and Central Asia Latin America Regional
Global 252 253 124 160 13 49
Distribution of GEF US$ 179 million in 25 ODS Projects
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Turkmenistan Armenia Estonia Uzbekistan Tajikistan Latvia
Kazakhstan Hungary Czech Republic Azerbaijan Slovak Republic
Bulgaria Slovenia Lithuania Belarus Ukraine Poland Regional Russian
Federation 22800 42000 45000 152830 271502 404218 748839 1493000
1848000 2226000 2453000 3000000 3518000 3621478 8800000 9500000
13953000 15575369 111100000
Distribution of GEF US$ 696 POPs Projects
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Continued Financing Climate Change Mitigation: Strategic Objectives
for GEF-5 (2010-2014)
Demonstration, deployment, and transfer of innovative low-carbon
technologies
Market transformation for energy efficiency in industry and the
building sector
Investment in renewable energy technologies
Energy efficient, low-carbon transport and urban systems
Conservation and enhancement of carbon stocks through sustainable
management of land use and forestry (LULUCF)
Enabling activities and capacity building
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Continued Financing ODS and POPs: Strategic Objectives for GEF-5
(2010-2014)
Phase out POPs and reduce POPs releases;
Phase out ODS and reduce ODS releases; and
Pilot sound chemicals management and
mercury reduction.
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GEF 5 Resources and Strategy in Climate Change and Chemicals
Investment
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4,250 Grow by 36%
GEF 4 (July 2006- June 2010) GEF 5 (July 2010 - June 2014) 3131
4250 Climate Change Mitigation
1,360 Grow by 45%
GEF 4 (July 2006- June 2010) GEF 5 (July 2010 - June 2014) 941
1360
Utilization of the GEF funds in POPs 1991-2010
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$ million
GEF 5 Set-aside Funds for Climate Change and Chemicals
Climate Change Total: US$272 million (US$1360 million X 20%)
National Communications and Technology Needs Assessments
(US$80m)
Global and regional technology centers and network (US$42m)
Incentives for countries to participate (with STAR) in global and
regional projects (US$20m)
Global and regional projects (targeted research, etc.)
(US$10m)
Support for carbon finance (US$20m)
Sustainable Forest Management/REDD + incentives (US$100m)
ODS and POPs Total: US$35 million for national communications
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** GEF Agency approval of project signifies start of project
implementation
*** Project completion follows terminal evaluation and financial
closure
It will be useful when presenting this slide to discuss what a PIF
is and the 18 month project cycle.
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CEO endorsement of project
GEF Agency completion of project & implementation
start***
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* Agency approves MSP after CEO approval of the project and starts
implementation.
Medium-sized projects (< = $1 Million)
GEF Agency completes implementation followed by evaluation and
financial closure
Single –step Approval
Agency submits final MSP project document for CEO approval*
GEF Agency completes implementation followed by terminal evaluation
and financial closure
Country endorsement (by Country National Operational Focal
Point)
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All Project Identification Forms should have endorsement of
Operational Focal Point when submitted to GEF for clearance (in
case of full-sized projects) or approval (in case of medium-sized
projects requesting project preparation grants)
Review criteria for FSP/MSP
Project co-financing;
Agency’s responses to comments and reviews.
For combining GEF and MLF funding for HPMPs the MLF funded portion
can count as part of the baseline project
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Project Baseline: Activities that would happen without GEF’s
investment
The costs of the baseline activities: to be covered by normal
development expenditures such as government budgets, bilateral aid,
the private sector, NGO resources, and loans from international
financial institutions, including IDA and the Multilateral
Fund.
The impacts of the baseline activities (GHG emissions and global
environmental benefits): to be estimated through historical
projects and/or trend analyses
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Alternative Project: Activities that would happen with GEF’s
investment
Incremental costs of the alternative project may include
technology licensing;
procurement of equipment and engineering services;
acquisition of additional natural resources, such as land for wind
farm development;
training for professionals to manage new technologies, etc.
Net incremental costs can be negative
Long run average cost – NON-HCFC chillers
Long run average cost – HCFC chillers
Operation years
Unit Cost
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1998-2006
Ratio of co-financing
29% (weighted average)
Transformed the refrigerator market by promoting energy efficient
models Reduced GHG and CFC emissions via CFC-free appliances
Case study 2: Financing Energy Efficient Building Chillers in
Thailand
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New Chiller Installations Per Year
25% in 2005; by 2010 two-thirds of remaining inefficient chillers
were replaced
Institutional Framework and Governance Impacts
Achieved target energy savings and ozone depleting substances
reduction Demonstrated successful replacement of CFC chillers with
non-CFC chillers for further replication
1998-2005
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Introduce more energy efficient designs through technology transfer
in the refrigerator and air conditioning manufacturing sectors
Building capacity for greater market share of energy efficient
technology through greater consumer awareness and demand Meet 2015
Montreal Protocol target by reducing electricity consumption and
GHG emissions from the commercial and industrial sectors
Case study 3: Promotion of HCFC-free Energy Efficient Refrigeration
and Air-Conditioning Systems in the Russian Federation
CEO Endorsed 2010
governments,
other multilateral or bilateral sources, private sector,
NGOs, project beneficiaries, and concerned GEF agencies.
Essential for meeting the GEF project objectives
It would be useful to include here the concept of the baseline
project and baseline financing which is essentially the
co-financing.
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Historical GEF Co-financing (US$ million) Ratio in climate change
mitigation 3:18
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In GEF 5, the expectation is that the co-financing (baseline
financning) be at least 1:4. For LDCS and SIDS this requirement
will be applied on a case by case basis.
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Key for HCFC/EE project development
Policy and regulation of the government;
Involvement of multilateral and local commercial banks;
Development of energy service companies (ESOCs);
Incentives to technology users;
Capacity building and development for technology users and
commercial bank professionals;
Removing other barriers; and
Financial mechanism for the UNFCCC
US$3 billion, over 850 projects, 150 countries
Leveraged US$18 billion co-financing in climate change
projects
Mitigated about 2.5 billion tons of CO2
GEF’s achievements in ODS and POPs
Invested US$ 613 million
Leveraged US$ 875 co-financing
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US$1.36 billion in climate change
Six strategic objectives
Baseline and co-financing are important in project
development
Looking forward ODS and POPs GEF5 (2010-2014)
Three strategic objectives
More funds available
Developing projects that meet strategic objectives of CC, ODS, and
POPs has high priority in the GEF. Linkages can be made with ODS
and Hazardous Waste Management and ODS and Energy Efficiency.
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STAP