Distr.
GENERAL
FCCC/SBI/1996/3
15 December 1995
Original: ENGLISH
SUBSIDIARY BODY FOR IMPLEMENTATION
Second session
Geneva, 27 February - 4 March 1996
Item 4 (a) of the provisional agenda
Paragraphs Page
I. INTRODUCTION 1 - 4 3
II. OPERATIONAL STRATEGY 5 - 25 3
A. Activities financed by the Global Environment Facility 7 - 10
4
B. Long-term measures 11 - 17 5
C. Enabling activities in support of national communications 18 - 21 7
D. Other enabling activities 22 8
E. Short-term projects 23 - 25 8
GE.95-
Paragraphs Page
III. WORK PROGRAMME 26 9
IV. SCIENTIFIC AND TECHNICAL ADVISORY PANEL 27 - 28 9
1. At its first session, the Subsidiary Body for Implementation
(SBI) requested the secretariat to make available at subsequent
sessions information on relevant action taken by the Council of the
Global Environment Facility (see FCCC/SBI/1995/5, para. 24). The
present report is submitted in response to that request.
2. The GEF Council has held one meeting in Washington D.C., from
23 to 25 October 1995, since the first session of the
SBI.
3. Among issues addressed at that meeting, the following are of
particular relevance to the Convention:
- Adoption of the GEF operational strategy;
- Approval of a work programme of projects;
- Initiation of Scientific and Technical Advisory Panel (STAP)
activities.
4. Information on related GEF Council action is presented
below.
5. The Council considered a draft operational strategy contained
in GEF document GEF/C.6/3. That draft operational strategy included
an operational framework applicable to all focal areas and chapters
on the specific focal areas of biodiversity, climate change,
international waters and ozone depletion. The Council approved the
GEF operational strategy as contained in the revised draft subject to
the changes agreed upon during the meeting. The Council noted that
the strategy is a living document and that it should consider
annually whether there is a need to revise the strategy.
6. The operational strategy for climate change covers enabling
activities and both long-term and short-term mitigation measures. The
operational strategy was prepared in response to guidance by the
first session of the Conference of the Parties (COP 1), including the
choice of a mixed strategy combining activities aimed at either
long-term or short-term cost-effectiveness. Its main elements are
summarized below.
7. The overall strategic thrust of climate change activities
financed by the GEF is to support sustainable measures that minimize
climate change damage by reducing the risk, or the adverse effects,
of climate change. The GEF will finance agreed and eligible enabling,
adaptation, and mitigation activities in eligible recipient
countries, as follows:
(a) Enabling activities facilitate implementation of effective
response measures. The COP determined the programme priorities of
these GEF activities. Some of these will be "agreed full cost"
activities in support of country commitments under Article 12.1 of
the United Nations Framework Convention on Climate Change (national
communications); and others will be "agreed full incremental cost"
activities for other relevant commitments;
(b) Adaptation activities minimize the adverse effects of climate
change. Initially, in accordance with decision 11/CP.1, para. 1 (c)
(iv), the GEF will meet the "agreed full costs of relevant adaptation
activities undertaken in the context of the formulation of national
communications" (FCCC/CP/1995/7/Add.1). These are the "Stage I
adaptation activities" outlined by COP 1. Funding for adaptation
activities beyond stage I will be dependent on COP guidance. In the
medium and long term, subject to COP guidance, the GEF could finance
agreed and eligible activities (including further capacity-building)
undertaken to prepare for adaptation, as envisaged by Article 4.1(e),
as well as measures to facilitate adequate adaptation, including
insurance, and other adaptation measures as envisaged by Article
4.1(b) and 4.4;
(c) Mitigation measures reduce or lead to the reduction of
greenhouse gas emissions from anthropogenic sources or protect or
enhance removal of such gases by sinks (thus reducing the risk of
climate change). The GEF will assist in implementation of national
programmes by supporting agreed mitigation activities that meet
either long-term or short-term criteria.
8. The operational criteria for these GEF activities will be
developed in accordance with this operational strategy and with GEF
policies. The initial portfolio of activities financed by the GEF
will include:
(a) Long-term measures, including long-term mitigation projects
and certain enabling activities. These will be country-driven and
prepared in the context of GEF operational programmes;
(b) Enabling activities in support of national communications,
including stage I adaptation activities. These will be country-driven
and prepared and scheduled in accordance with GEF operational
criteria;
(c) Short-term mitigation projects. These will be country-driven
and approved individually on the basis of GEF operational
criteria.
9. Because enabling activities are the foundation for much of the
GEF portfolio, they will be emphasized initially. As the GEF builds
on this foundation, the emphasis will gradually shift to the other
types of activities. Long-term measures will constitute the largest
share of the GEF climate change portfolio, with enabling activities
in support of national communications a relatively small and
declining share. Short-term mitigation projects will constitute only
a small share of the portfolio, in order to maintain the operational
emphasis on long-term measures.
10. Insofar as it is feasible, projects will be designed and
located so as to meet global environmental objectives in other focal
areas and to prevent or control land degradation.
11. Working Group I of the Intergovernmental Panel on Climate
Change (IPCC) has emphasized that it is the cumulation of emissions
over time, rather than when emissions take place, that determines the
impact of greenhouse gases on climate. Long-term mitigation measures
respond to this concern.
12. Long-term measures financed by the GEF will be prepared in the
context of operational programmes. The operational programmes in
climate change designed to achieve long-term impacts build in part on
the proposed approach outlined in the analytical framework of the
STAP. The STAP recommended promoting the "backstop" technologies -
that is, technologies such as renewable energy technology that will
in the long run be necessary to prevent greenhouse gas emissions - as
a strategy to induce cost reductions. The STAP noted that "what is
relevant for the GEF ... is not only (a) [backstop technologies']
current cost, but (b) the prospects for reduction in costs of the
technologies in question, and (c) the contribution that [the] GEF can
make to cost reductions."
13. In line with the recommendations of the STAP, operational
programmes will be developed to expand, facilitate and aggregate the
markets for the needed technologies and improve their management and
utilization, resulting in accelerated adoption and diffusion. The
emphasis of operational programmes will be two-pronged:
(a) To remove barriers to implementation of climate-friendly,
commercially viable technologies; and
(b) To reduce the cost of prospective technologies that are not
yet commercially viable, to enhance their commercial
viability.
14. In both cases set out above, operational programmes will
identify measures and technologies that will be funded so as to
achieve the objectives of the programme. The operational programmes
will provide the context for the investments, capacity-building,
technical assistance, targeted research, public participation, and
general enabling activities to be developed.
15. Article 4.1 of the Convention provides a list of commitments
by all Parties, including those that need GEF support. The
commitments under Article 4.1 concern both anthropogenic emissions by
sources and removals by sinks, both mitigation and adaptation, all
relevant economic sectors, all greenhouse gases not controlled by the
Montreal Protocol on Substances that Deplete the Ozone Layer, and
various types of measures. Over time, additional operational
programmes concerning issues not addressed by initial operational
programmes will be proposed to the GEF Council. These programmes will
be:
(a) Consistent with the guidance of the Conference of the Parties
of the Convention;
(b) The most promising technically, in accordance with the latest
scientific and technical assessments of the IPCC and the
STAP;
(c) Cost-effective solutions to meet programme objectives;
and
(d) Consistent with the other operational principles and strategic
objectives of the GEF.
16. Developing operational programmes will be a dynamic process
that emphasizes experiential learning. The lessons learned about
effective response measures in recipient countries and by GEF
Implementing Agencies will be absorbed, the programmes modified, the
insights generalized, and accepted good practice applied in new
contexts. Future operational programmes will also cover the measures
that countries identify in their national communications, consistent
with Article 4.1 of the Convention. In the immediate short term, the
constraints on programming will be the financial resources available
for a given replenishment period and the capacities of the GEF, its
Implementing Agencies, and the recipient countries to develop and
implement projects.
17. Three initial operational programmes are proposed on the basis
of a review of technical assessments, including recent work for the
GEF on the cost reductions expected in new energy technologies. These
programmes are consistent with the guidance provided by the COP and
with the most recent findings of the IPCC. The three operational
programmes that will be developed initially are:
(a) Removing barriers to energy conservation and energy
efficiency;
(b) Promoting the adoption of renewable energy by removing
barriers and reducing implementation costs; and
(c) Reducing the long-term costs of low greenhouse gas-emitting
energy technologies.
18. Enabling activities provide the foundations to address climate
change through country-driven activities. They have been defined by
the COP, in its decision 11/CP.1, as "planning and endogenous
capacity-building, including institutional strengthening, training,
research and education, that will facilitate implementation, in
accordance with the Convention, of effective response measures"
(FCCC/CP/1995/7/Add.1).
19. Enabling activities that are specifically related to
countries' obligations concerning national communications under
Article 12.1 of the Convention are eligible for GEF financing on the
basis of "agreed full costs." Such enabling activities will result in
plans on which the national communications will be based; these plans
will serve as the basis for sustainable and effective response
measures. The assistance provided under these enabling activities
will conform fully to the guidance of the COP with respect to
national communications. Because the format for national
communications is still under consideration, the content will, for
the interim, be based on the provisions of Article 12.1. The GEF has
prepared operational criteria to guide the preparation and scheduling
of support for these activities, and to ensure:
(a) Coverage without duplication of the efforts of others
(including bilaterally financed studies);
(b) Appropriate sequencing of the activities;
(c) The use of best practice;
(d) Cost-effectiveness (including use of norms).
20. The GEF will provide full-cost funding for stage I adaptation
activities undertaken within the context of the formulation of
national communications. Such activities may include studies of the
possible impacts of climate change; identification of options for
implementing the adaptation provisions, especially the obligations
set forth in Article 4.1(b) and 4.1(e); and relevant
capacity-building. Stage I adaptation activities supported by the GEF
will assist the COP to identify countries and regions that are
particularly vulnerable to climate change. Funding for subsequent
activities will depend on future COP guidance.
21. Such stage I adaptation activities will identify options to
facilitate adequate adaptation to climate change. These activities
could encompass the following:
(a) Assessment of national, regional and/or subregional
vulnerability to climate change; where appropriate, reliance on
related data-gathering systems to measure climate change effects in
particularly vulnerable countries or regions and strengthening of
such systems as necessary; and identification of a near-term research
and development agenda to understand sensitivity to climate
change;
(b) Evaluation of policy options for adequate monitoring systems
and response strategies for climate change impacts on terrestrial and
marine ecosystems;
(c) Assessment of policy frameworks for implementing adaptation
measures and response strategies in the context of coastal zone
management, disaster preparedness, agriculture, fisheries, and
forestry, with a view to integrating climate change impact
information, as appropriate, into national strategic planning
processes;
(d) In the context of undertaking national communications,
building of national, regional and/or subregional capacity, as
appropriate, to integrate climate change concerns in medium- and
long-term planning.
22. The GEF will provide financing for other enabling activities
on an "agreed full incremental cost" basis. As with other
country-driven initiatives, these activities will be prepared in the
context of an operational programme to ensure sustainability,
continuity, and integration of the enabling activity with follow-up
investments, capacity-building, technical assistance, targeted
research, and public participation.
23. The GEF may finance climate change projects that reduce
greenhouse gases in the short term, even if they are not part of an
operational programme. Such projects will be funded if they are
country priorities, cost-effective in the short term, and likely to
succeed. The rationale for project support is primarily the expected
reduction in greenhouse gases rather than its programmatic impact.
Careful monitoring will be required to verify that the actual
reduction in greenhouse gas emissions meets or exceeds the original
expectation.
24. Short-term projects may be of various types, including
initiatives to seize unforeseen opportunities and to meet
contingencies. Short-term projects may include, but not be limited
to, mitigation measures in areas for which operational programmes
have not yet been developed - such as transport, carbon
sequestration, and agricultural waste. Experience gained in these
projects will be a valuable input to the future development of such
operational programmes. Projects that require conducive policies in
order to be economic and sustainable will be eligible for GEF
financing when such policies are in place.
25. Short-term projects must be cost-effective, likely to succeed,
and country-driven.
26. The GEF Council considered and approved a work programme of
projects contained in document GEF/C.6/4. Ten of the activities in
this work programme were in the climate change focal area (6 enabling
activities, 4 projects). For the whole of 1995, the GEF Council will
thus have approved activities in the climate change focal area for a
projected expenditure of US$71.59 million out of a total of US$240.46
million in all focal areas combined. The share for climate change
activities is thus slightly below 30 per cent of the total
expenditures envisaged in 1995. It is envisaged, however, that the
share of activities in the climate change area in total expenditures
in coming years will grow significantly.
27. The GEF Council reviewed the budget and the business plan of
the STAP. The Council approved the budget and took note of the
business plan. The STAP is chaired by Dr. Pier Vellinga.
28. During the discussion of the operational strategy within the
GEF Council, the STAP was requested to examine further the following
issues emerging from the strategy in the area of climate
change:
(a) To review the scientific and technical issues and options in
the transport sector. An option note should be prepared;
(b) To review the scientific and technical aspects of stage I
adaptation with respect to the identification of vulnerable areas
drawing upon the assessments of the IPCC and the Subsidiary Body for
Scientific and Technological Advice (SBSTA). A STAP assessment paper
should be prepared;
(c) To assess the status of learning curves of renewable energy
technologies and identify the most commercially promising
technologies. A STAP assessment paper should be
prepared.