Transcript Slide 1

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
 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
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The GEF
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The GEF Secretariat
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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The GEF 1991-2011
Strategic
Guidance
Operations
10 Agencies
STAP
GEF Assembly
Countries:
Political FPs
Conventions
Countries:
Convention FPs
182 participating
countries, private
sector, and civil
society
Action
GEF Agencies
GEF Council
Countries:
Council
Members/
Constituencies
•UNDP
GEF
Secretariat
•UNEP
•World Bank
ADB
•AFDB
Evaluation
Office
US$ 16.13 billion as
of June 2010
US$ 16.22 billion
as of June 2011
•EBRD
•FAO
Projects
Countries:
Operational
FPs,
Convention
FPs, other gov’t
agencies, civil
society
Over 2,700
projects
•IADB
•IFAD
•UNIDO
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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
– Technology Needs Assessments
– National Communications to the
UNFCCC
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20 Years – Financing for ODS and POPs
 GEF Trust Fund invested about US$613
million including
– $ 187 million in ODS
• 26 ODS projects
• 19 individual countries and 6 regional projects
– $ 426 million in POPs
• 219 POPs projects
• Over 154 countries
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20 Years – Catalyzing investment
 Catalytic
– Leveraged more than US$18 billion in cofinancing 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
 Cost-effective
– 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
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Distribution of GEF Approved 851 CC Projects in Regions
Regional 13
Global 49
Africa 252
Latin America
160
East Europe
and Central
Asia 124
Asia 253
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Distribution of GEF US$ 179 million in 25 ODS Projects
111,100,000;
62%
Russian Federation
Regional
15,575,369 ; 8.7%
Poland
13,953,000; 7.8%
Ukraine
9,500,000; 5.3%
Belarus
8,800,000 ; 4.9%
Lithuania
3,621,478
Slovenia
3,518,000
Bulgaria
3,000,000
Russia: 3 projects;
Slovak Republic
2,453,000
Azerbaijan
2,226,000
Other countries: one project each.
Czech Republic
1,848,000
Hungary
1,493,000
Kazakhstan
748,839
Latvia
404,218
Tajikistan
271,502
Uzbekistan
152,830
Estonia
45,000
Armenia
42,000
Turkmenistan
US$
22,800 ; 0.01%
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
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Distribution of GEF US$ 696 POPs Projects
Africa
8%
2%
23%
Asia
Global
20%
Total
$696 million
3%
East Europe and Central
Asia
Latin America
44%
Regional
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Continued Financing Climate Change Mitigation:
Strategic Objectives for GEF-5 (2010-2014)
1.
Demonstration, deployment, and transfer of innovative
low-carbon technologies
2.
Market transformation for energy efficiency in industry
and the building sector
3.
Investment in renewable energy technologies
4.
Energy efficient, low-carbon transport and urban
systems
5.
Conservation and enhancement of carbon stocks
through sustainable management of land use and
forestry (LULUCF)
6.
Enabling activities and capacity building
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Continued Financing ODS and POPs: Strategic
Objectives for GEF-5 (2010-2014)
 Phase out POPs and reduce POPs
releases;
 Phase out ODS and reduce ODS
releases; and
 Pilot sound chemicals management and
mercury reduction.
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GEF 5 Resources and Strategy in Climate
Change and Chemicals Investment
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Increased Resources in Climate Change (US$ million)
4,500
4,000
Total Replenishment
4,250
Grow by 36%
Climate Change Mitigation
3,500
3,131
3,000
2,500
2,000
1,360
Grow by 45%
1,500
1,000
941
500
-
GEF 4 (July 2006- June 2010)
GEF 5 (July 2010 - June 2014)
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Utilization of the GEF funds in POPs 1991-2010
$ 5.0 million
12%
Total: $40.7
million
Latin America
Caribean Sea
$ 35.7 million
88%
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Climate Change Allocation in GEF 5 STAR
$ million
160
150
140
120
94
100
87
80
54
60
40
30
40
26
20
4
0
China
India
Russian
Federation
Brazil
Mexico
Indonesia
South Africa
Average
other 137
countries
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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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Key Points in GEF’s Project Development
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Full-sized projects (> $1 Million)
Council
approval of
Work
Program*
GEF Agency
completion of
project &
implementation
start***
CEO
endorsement of
project
GEF Agency
approval of
project**
*
Work Program consists of PIFs cleared by the CEO
** GEF Agency approval of project signifies start of project implementation
*** Project completion follows terminal evaluation and financial closure
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Medium-sized projects (< = $1 Million)
Single –step Approval
Two-step Approval
(if PPG is needed)
Agency submits PIF/PPG for CEO
approval
Agency submits final MSP project
document for CEO approval*
GEF Agency completes implementation
followed by evaluation and financial closure
Agency submits final MSP project
document for CEO approval*
GEF Agency completes
implementation followed by terminal
evaluation and financial closure
* Agency approves MSP after CEO approval of the project and starts implementation.
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Country endorsement
(by Country National Operational Focal Point)
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)
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Review criteria for FSP/MSP
•
Country eligibility and ownership;
•
Agency’s Comparative advantage;
•
Resource availability;
•
Project consistency;
•
Project design;
•
Baseline of the project;
•
Incremental costs of the project;
•
Project co-financing;
•
Monitoring and evaluation; and
•
Agency’s responses to comments and reviews.
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Project baseline
 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 and incremental costs
 Alternative Project: Activities that
would happen with GEF’s
investment
Unit Cost
Long run
average cost –
HCFC chillers
 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
Net incremental cost
Long run
average cost –
NON-HCFC
chillers
Year 1
Year 2
Operation
years
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Example of baseline and GEF investment scenarios
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Case Studies on GEF Investments in EE
and ODS
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Case study 1: Commercialization of CFC-Free Refrigerators in China
1998-2006
GEF Financing
9.86 ($mn)
Co-financing Total
Government
Private
Other
32.29 ($mn)
1.38
29.72
.20
Ratio of co-financing
1: 3.3
GHG Emission Mitigation
42 (million tCO2e)
Cost of carbon reduction
US$1/tCO2e)
Increased Efficiency of
Household Refrigerators
29%
(weighted average)
Institutional Framework and
Governance Impacts
-Transformed the refrigerator
market by promoting energy
efficient models
- Reduced GHG and CFC emissions
via CFC-free appliances
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Case study 2: Financing Energy Efficient Building Chillers in Thailand
1998-2005
GEF Financing
2.50 ($mn)
Co-financing Total
Government
Other
2.73 ($mn)
0.26
2.47
Ratio of Co-financing
GHG Emission Mitigation
Technology Transfer
1: 1.1
1.224 (million tCO2e)
17 CFC-based chillers replaced
New Chiller Installations Per Year 25% in 2005; by 2010 two-thirds of
remaining inefficient chillers were
replaced
Institutional Framework and
Governance Impacts
-Achieved target energy savings and
ozone depleting substances reduction
- Demonstrated successful
replacement of CFC chillers with nonCFC chillers for further replication
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Case study 3: Promotion of HCFC-free Energy Efficient Refrigeration
and Air-Conditioning Systems in the Russian Federation
CEO Endorsed 2010
GEF Financing
18.2 ($mn)
Co-financing Total
40.0 ($mn)
Ratio of Co-financing
1: 2.2
Expected GHG
Emission Mitigation
15.6 (million tCO2e)
Expected Institutional
Framework and
Governance Impacts
-Introduce more energy efficient designs
through technology transfer in the
refrigerator and air conditioning
manufacturing sectors
-Building capacity for greater market
share of energy efficient technology
through greater consumer awareness
and demand
-Meet 2015 Montreal Protocol target by
reducing electricity consumption and
GHG emissions from the commercial and
industrial sectors
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GEF Co-financing
 Total of cash and in-kind resources
committed by:
– governments,
– other multilateral or bilateral sources,
private sector,
– NGOs, project beneficiaries, and
concerned GEF agencies.
 Essential for meeting the GEF project
objectives
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Historical GEF Co-financing (US$ million)
Ratio in climate change mitigation 3:18
6,899
7,000
6,000
5,000
4,000
2,410
2,591
2,515
1,655
3,000
2,000
1,000
-
13
523
GEF - 4
GEF - 3
GEF - 2
GEF - 1
GEF - 0
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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
 Working together.
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Conclusions (1)
 GEF’s achievements in climate change
– 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
– Mitigated 1.155 GT of CO2 Equivalent
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Conclusions (2)
 Looking forward Climate Change GEF5 (2010-2014)
– US$1.36 billion in climate change
– Six strategic objectives
– Greater positive impacts on global environment benefits
– 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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Thank you for your attention!
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