2471 6 August 2002 4- ~.A- Overview of GEF Program and Project Results AUGUST 2002 Evaluation Report # 3-02 INTRODUCTION 4 BIODIVERSITY 6 CLIMATE CHANGE 22 INTERNATIONAL WATERS 32 OZONE DEPLETION 42 LAND DEGRADATION 46 NOTES ON METHODOLOGY 50 Box 1. Protecting a Globally Important Region in South Africa .......... 9 Box 2. Achievements and Lessons Learned in Managing Ghana's Coastal Wetlands ...................................... 11 Box 3. Combining Indigenous Knowledge and Science to Build Capacity and Address Land Degradation Globally ................. 12 Box 4. Using Science to Achieve Sustainable Management of the Belize Barrier Reef Complex ............................... 14 Box 5. Boosting the Market for Energy-Efficient Lighting by Lowering Prices and Increasing Demand ........................... 25 Box 6. Consumer Credit for Solar Home Systems Promotes Energy-Efficient Technology .................................... 27 Box 7. Recovering China's Coal Bed Methane to Provide Clean Energy and Improve Worker Safety .......................... 29 Box 8. Building Local and Binational Support for Improved Management of the Bermejo River Basin .......................... 33 Box 9. Demonstration Projects Promote Partnerships and Improve Environmental Management in East Asian Seas .......... 35 Box 10. A Strategic Partnership to Tackle Pollution in Danube/Black Sea Basin .3.... 37 Box 11. Completing the Phase Out of Ozone-Depleting Substances ..... 42 il-iY1d ) In September 2000, the GEF Council approved the plan for the imple- mentation of the Second Overall Performance Study of the GEF (OPS2). OPS2 focused on four topics: results and impacts of GEF activities, GEF relations with global environmental conventions, GEF policies and pro- grams, and GEF's institutional relationships and arrangements. To support the independent OPS2 team, GEF's Monitoring and Evaluation Unit pro- vided substantive evaluative material: program studies in the four GEF programs of biodiversity, climate change, international waters, and ozone- depleting substances and a study on linkages with land degradation. Other GEF M&E evaluations (visit www.gefweb.org to view M&E documents) and 41 project completion evaluations by GEF implementing agencies, UNDP, UNEP, and the World Bank, were also provided to the OPS2 team. Beyond serving as inputs to the OPS2, the program studies are them- selves valuable evaluations comprising key findings in the GEF. Teams of international consultants and staff members of the GEF Secretariat, UNDP, UNEP, and the World Bank carried out the three primary program studies and external academic institutions completed the program study on ozone- depleting substances and the linkage study on land degradation. The studies' data sources were annual project implementation reviews, thematic reviews, desk reviews and field visits. (The Notes on Methodology at the end of this document further explain each study's methodologies.) Individual projects data-presented in boxes to illustrate particular lessons and opportunities for replication-come from the imple- menting agencies, particularly their project evaluations. The project cases do not represent the program studies' overall findings; rather, they are a balanced overview of GEF experience and funding in terms of focal areas, regional coverage, and implementing agencies. While the complete studies have been published previously, this docu- ment summarizes the studies' findings as a complement to the conclusions 4 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS INTRODUCTION of the OPS2 report, The First Decade of GEF, especially as demand rises for evaluative material leading into the Second GEF Assembly. Biodiversity. The Biodiversity Program Study2 had three main objec- tives: highlighting and assessing achievements, initial impacts, and lessons learned from the GEF biodiversity portfolio, analyzing the geographic area covered by GEF-assisted projects and its relationship to globally important ecosystems, and assessing mechanisms for incorporating lessons learned into more recently approved projects. Climate change. The Results fronm the GEE Climate Change Program3 focused on four primary concerns: evaluating project activities' relevance to country needs and global objectives and identifying, respectively, signif- icant implementation issues and lessons, impacts or likely impacts of cli- mate change projects, and factors that influence projects' sustainability and replication. The program study also synthesized the results of eight, previously published, targeted reviews, in such areas as grid-connected renewable energy, rural solar PV systems, and energy service companies. International waters. The International Waters Program Study4 reviewed the coverage, results, and preliminary impacts of GEF's international waters programs by examining international waters project portfolio. The study team analyzed project data using performance indicators, assessed GEF poli- cies on priority issues in international waters, and examined programs' rela- tive alignment with contemporary intergovernmental initiatives addressing damage and threats to freshwater and marine environments. Ozone depletion. The Study of Impacts of GEF Activities on the Phase- Out of Ozone Depleting Substances5 assessed both the GEF-supported, ODS phase-out programs being implemented by countries with economies in transition and their implementation of the Montreal Protocol. Land degradation. The GEF Land Degradation Linkage Study identi- fied the results and initial impacts of projects' land degradation compo- nents. The lessons learned from this review generated a set of recommendations for effectively addressing land degradation issues in focal area reviews and subsequent GEF activities. ~tKV~L larle Harstad Senior Monitoring and Evaluation Coordinator Global Environiment Facility OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 5 GEF BIODIVERSITY PORTFOLIO Over the last 9 years, from 1991 through June 2000, the GEF has allocated approximately $1.18 billion for conservation and sustainable use of biodiversity resources around the world and has leveraged about $2 billion in co-financing. This funding is distributed among an impressive 395 projects in 123 developing countries and countries with economies in transition (CEITs) in four types of ecosystems: arid and semi- arid, coastal and freshwater, forest, and mountain. The projects support diverse activities to promote conservation, encourage sustainable use of resources, and enhance the sharing of benefits at local, national, and global levels. In addition, these projects have supported the Convention on Biological Diversity in other areas such as invasive alien species, migratory species, taxonomy, World Heritage sites, and indigenous communities. SCOPE AND DISTRIBUTION In addition to assessing the portfolio's achievements, the program study looked at the number and hectares of protected areas, and number and areas covered by special lists of globally significant ecosystems. A major 6 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS focus of the GEF biodiversity portfolio has been supporting both new and existing protected areas. The study estimated that 49 projects (or 62 percent of the mature portfolio)7 involve establishing new areas or enhancing existing protected areas. These 49 projects, 60 percent of which are funded under GEF's forests operational program, encompass more than 320 protected areas, covering approximately 60 million hectares altogether. GEF has allocated $350 million in funding to these projects. GEF projects seek to protect many globally important sites and species, such as those selected for the World Heritage Program, WWF's Global 200 Earth's Distinctive Ecoregions, Ramsar, UNESCO/MAB (Man And the Biosphere) Reserves, Migratory Species, and the IUCN Red lists of threatened and endangered species. Most protected areas projects include developing management plans and securing the participation of stakeholders and local beneficiaries. Capacity development activities, such as disseminating information, training, and education, are found in over half of the portfolio's mature projects, as are efforts to address policies, laws, and regulations, including proposals to implement plans and strategies, strengthen support, and establish policies and laws, some of which involve regional collaboration. Similarly, more than half of the projects count research activities among their objectives, such as developing databases and information systems, performing monitoring and evaluation, and conducting research on or about protected areas. The study also estimated that about one-third of the projects in the mature portfolio deal with protected area management, another third with implementing sustainable use programs, and the final third with supporting biodiversity conservation and sustainable use through meaningful stakeholder participation. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 7 PROGRAM STUDY FINDINGS MAJOR ACHIEVEMENTS AND IMPACTS The program study's analysis yielded several major findings. Projects aiming to conserve biodiversity are among the more difficult types of projects to implement. They often pursue conservation objectives that, while offering significant long-term local and global benefits, cause peo- ple to lose access to natural resources, especially in rural communities. These projects may require the collaboration of governments that do not consider biodiversity conservation a priority. They also incorporate scientific principles that are new, evolving, often counterintuitive, and difficult to fully explain to stakeholders. It is worth noting that there are no standards by which GEF project achievements can be objectively assessed. Consequently, the challenges cited above and the quantitative achievements described earlier offer the best context in which to view the achievements of GEF's biodiversity portfolio. Protected areas. A very large portion of the projects assessed had pro- tected areas as their major focus. More than half of these projects were assessed to have fully or mostly met their objectives, even though they are invariably the most difficult and complicated types of projects to implement. Furthermore, the reviewers assessed over half of the protected areas projects as having comprehensive or partial stakeholder participa- tion, some benefit-sharing activities, and some measures for ensuring sustainability. Of projects working to establish biodiversity conservation and sustainable regimes in production landscapes outside protected areas, nearly 50 percent had mostly achieved their objectives, while the other half had only partly achieved their objectives.8 Box 1 reports on the achievements of the South African Cape Peninsula Project in preserving a unique botanical treasure. 8 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS BOX 1. PROTECTING A GLOBALLY IMPORTANT REGION IN SOUTH AFRICA South Africa's Cape Peninsula is part of the Cape Floristic Region, one of only six floral kingdoms in the world. This zone has some of the planet's highest floral diversity per unit area and highest concentra- tions of endemic plant species, making it a renowned tourist site. A major conservation challenge for the region is its proximity to Capetown, one of South Africa's fastest-growing cities. In 1997, with GEF support, the South African Cape Peninsula Project, implemented by the World Bank, was created to rehabilitate and maintain indigenous terrestrial flora and fauna on the Cape Peninsula and marine conservation in immediately surrounding areas. The strategy to achieve a sustainable rehabilitation for the region was focused mainly on eradicating invasive plant species in Cape Peninsula National Park, developing a fire management plan as well as a marine protection plan, creating a fund (the Table Mountain Fund) to support NGO-managed community conservation programs, and defining a biodiversity conservation strategy for the broader Cape Floral Kingdom that involved a large diversity of stakeholders. A specific project target is the initial rernoval of 2,400 hectares of ! invasive alien seed-bearing plants by the end of the project, in addi- tion to an 18,200-hectare follow-up. By October 2001, the project had already removed invasive species on an initially cleared area of 5,300 hectares, followed by the clearance of an additional 16,100 hectares. The clearance program has employed about 300 people drawn from historically disadvantaged communities adjacent to the park. Other achievements of the project include completing a fire management plan, which is now under implementation, and efficiently allocating returns to the implementing organizations of the Table Mountain Fund. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 9 PROGRAM STUDY FINDINGS w;'S~~~~~~~~~~~~~~o { ~~~~~- 14 Stakeholder participation. Participation by stakeholders was comprehen- sive in around 30 percent of the projects reviewed and partial in more than 20 percent. Participation was planned for another nearly 25 percent, but the information available did not indicate whether and to what extent it occurred. For the remaining 25 percent, participation was either poor (9 percent), absent (12 percent), or not known (4 percent). While available documentation did not enable reviewers to fully evaluate participation effectiveness, some lessons, specifically those related to the private sector's limited involvement and the weak use of traditional and indigenous knowledge, were identified. Significantly, most of the projects involve institutions without much previous experience in stakeholder participation. In Ghana, stakeholder participation was a primary key to the success of the Coastal Wetlands Management Project, which is described in Box 2. 10 I OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS BOX 2. ACHIEVEMENTS AND LESSONS LEARNED IN MANAGING GHANA'S COASTAL WETLANDS The Coastal Wetlands Management Project in Ghana, implemented by World Bank, aimed to protect five key coastal wetland areas by col- laborating with the people who derive their livelihoods from these ecosystems. By helping plan and implement management programs, local communities developed valuable capabilities, as did both the Ghana Wildlife Society (GWS), a national NGO, and the Wildlife Department, whose staff received specialized training. Nationally, the project is the first major experiment with true community-based collab- orative management of natural areas. The key stakeholders-including government staff, the scientific community, the private sector, NGOs, and the local community-have embraced the necessity of cooperation. Local communities have been empowered to manage and use wetland resources responsibly, reducing mangrove destruction for fuelwood as well as habitat encroachment. In addition to the significant gains in capacity building, major achievements were realized in conservation and sustainable use of biodiversity. The project identified and monitored common wetlands resources that benefit both human and bird populations, and promoted management strategies for maintaining critical bird habitat without I unduly restricting people's resource uses. It also funded baseline and monitoring studies as well as a study on development options that would be compatible with sustainable use of the environment. In the global context, three locations have witnessed an increase in migratory bird populations, and five wetland ecosystems have been designated as Ramsar sites, ensuring the habitat for 1 percent of migratory waterbirds. Several key lessons learned reinforce the wisdom of some popularly accepted features of modern conservation projects. They include: * Decentralized administrative structures aid project implementation. * Community development cannot be disassociated from natural resource conservation, including biological diversity. * Government commitment of legal backing and financing is essential for project success. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS 11 PROGRAM STUDY FINDINGS Capacity development. A substantial number of the projects assessed were capacity development projects that focused on a variety of capacity needs at the individual, institutional, and systemic levels. Overall, capacity development projects did develop individual capacities; institutional and systemic capacities, however, proved harder to develop. The various training programs carried out were appropriate to the countries' socioe- conomic, political, and cultural realities. No evidence was available to demonstrate that institutional capacities would be sustained after GEF funding ends, partly because it was too early to judge. The multicountry People, Land Management, and Environmental Change Project has made exceptional impacts in improving individual and community capacity, some of which are presented in Box 3. BOX 3. COMBINING INDIGENOUS KNOWLEDGE AND SCIENCE TO BUILD CAPACITY AND ADDRESS LAND DEGRADATION GLOBALLY The PLEC (People, Land Management and Environmental Change) Project, implemented by UNEP, is a multicountry effort addressing land degradation and agrobiodiversity loss in cultivated tropical areas worldwide. Farmers and local communities are working together to identify conservation approaches that are not only environmentally, socially, and financially sustainable, but which sustain biodiversity. The existing management approaches at the project sites are informed by cultural and religious practices that promote crop and soil conservation and recognize the importance of resource rights and tenure, gender, livelihood strategies, and governance. By integrating locally developed knowledge of soil, climate, and other physical factors with scientific assessments of effects on crop production, sustainable I agricultural technologies are being devised to maintain crop and j management diversity. During the 2001 Project Implementation Review (PIR), GEF noted several key project achievements. For example, demonstration sites have been established, data has been collected, and participatory assessment methodologies and databases have been developed. The project has published the PLEC Agrodiversity Database Manual, and 12 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS produced a Guideline for Field Assessment of Land Degradation. Teams have networked actively among different sectors of the community: expert farmers teach others, and women, children, and schoolteachers disseminate the PLEC approach. Moreover, capacity building workshops, demonstrations at field sites, and the addition of PLEC concepts to university curricula in Uganda and Ghana have enhanced governments' interest in PLEC's approach. Nationally and internationally, PLEC is reaching out through reports, manuals, conference papers, the PLEC News & Views newsletter, audio-visual media, and the PLEC website. Several lessons learned have emerged from the project. Recognizing farmer's agrodiversity knowledge has paid off in their roles as educators for "non-expert" colleagues and rural communities at large. Securing participation by a wide range of stakeholders and modifying scientists' attitudes toward collaborating with farmers have been central project components. PLEC's emphasis of agricultural biodiversity at the landscape (or ecosystem) level and its focus on research and demonstration across different environments and social contexts has been eye-opening for many participants. These features have enabled the successful organization of country-level efforts aimed at preserving agrodiversity. Science and technology issues. About 60 percent of projects had substan- tially addressed science and technology issues; in completed projects, it was 80 percent. See Box 4 on the role of science in the Belize Coastal Zone Management Project. However, recognizing traditional and indigenous knowledge and involving social scientists appropriately in project design and implementation are two issues that need further attention. Land degradation. The GEF focus on issues related to land degradation is apparent in its biodiversity project portfolio. Of the projects reviewed, nearly 50 percent had substantially addressed land degradation issues, and another 10 percent partially addressed this issue. OVERViEW OF GEF PROGRAM AND PROJECT RESULTS I 13 PROGRAM STUDY FINDINGS BOX 4. USING SCIENCE TO ACHIEVE SUSTAINABLE MANAGEMENT OF THE BELIZE BARRIER REEF COMPLEX With the second longest barrier reef in the world and increasing use of marine resources, effective management of Belize's coastal resources is a key national priority. In 1990, Belize formed a Coastal Zone Management Unit to initiate an integrated coastal zone man- agement (CZM) program. After it developed a multisectoral approach to address the effects of land-based activities on the marine environ- ment, GEF granted funds for a 5-year, UNDP-implemented Coastal Zone Management Project. The pilot project's success generated a second project, Conservation and Sustainable Use of the Barrier Reef Complex, to carry out priority actions and prepare a comprehensive integrated CZM plan and coastal zone policy framework for Belize. One of the project's most significant achievements was Belize's enactment of the Coastal Zone Management Act of 1998, which provided the institutional and legal arrangements for integrated CZM by establishing a Coastal Zone Management Authority and its techni- cal arm, the Institute (or CZMAI). Today, the CZMAI has not only completed a National Integrated Coastal Zone Management Strategy, but conducts ongoing research, monitoring, and data management, such as monitoring reef health and coastal water quality. It also disseminates research and technical advice to relevant planners and decision-makers to ensure that integrated CZM and sustainable use principles are mainstreamed into sectoral activities and development planning. CZMAI's growing scientific capacity offers valuable support to other major project objectives such as establishing a Belize Barrier F Reef Marine Protected Area Network and implementing a demonstra- tion project to integrate caye development plans with marine diversity conservation concerns. Project impacts on biodiversity. For a large proportion of the GEF proj- ects reviewed, it was not possible to directly gauge impacts. Generally, projects did not systematically collect information that would enable answering this question. Also, most projects do not possess baseline data against which the current status could be compared. About 20 percent of 14 1 OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS the projects seemed to be collecting baseline data, and another 20 percent had planned to collect data (although data collection could not be confirmed). In the absence of baseline data, it was only partly possible to assess the projects' impacts on biodiversity. Consequently, information on the impacts on biodiversity was available for only 17 of the projects assessed. Of these, three (two completed) reported substantial impacts, and the remaining 14 (eight completed) reported some or little impact. For the remaining projects, there was either no information, or the question was not relevant, sometimes because it was too early to judge impacts. However, the GEF seems to have made progress in addressing the lack of baseline studies. A review of a group of newer forestry projects revealed that project managers almost universally follow the recommendation to incorporate baseline studies-biological and socioeconomic-in project documents. Frequently, baselines were established during project prepa- ration, or were expected to be established as one of a project's first tasks. It is not yet possible, however, to determine the impacts of these projects, as most have just been initiated. Project sustainability, Only about 10 percent of the projects reviewed sub- stantially addressed sustainability, one of the cross-cutting issues in the Biodiversity Program Study. Another 24 percent had partially addressed this issue. In 34 percent of the projects, this issue was either not addressed or very poorly addressed. In the remaining 30 percent, there were plans to focus on project sustainability, but available information did not specify whether such plans were carried out. However, even for completed projects, no system for post-completion assessments existed; whether project activities, institutions, and gains continued after project completion was unknown. Consequently, it was not possible to determine how many com- pleted projects, among those assessed to have addressed sustainability, effec- tively met this objective. Among the newest group of forestry projects, most address sustainability issues in the design phase, though this conclusion is based on project proposals rather than actual project implementation. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS I 1 5 PROGRAM STUDY FINDINGS o )_z*,9 8,-tt, - Applying lessons leamned. About half the projects assessed reported incorporating some lessons from past projects into their design; a third had not. However, as there was little differenlce between the achievements and impacts of completed (older) projects and ongoing (newer) projects, the lessons learned appear to have had minor impacts. Therefore, GEF needs to focus on modifying the mechanisms that ensure lessons learned are incorporated in new and ongoing projects. The newer projects among those assessed, particularly the new forestry pro , seem to be per- forming better in this regard. In summary, nearly SO percent of the projects reviewed had mostly achieved their objectives (including 8 percent that fully achieved them). Howeve,i the remaining half achieved their objectives only partly or minimally. These measures were the same for both completed and ongoing projects. It is, of course, unrealistic to expect all projects to fully achieve all their objectives. Many factors constrain the full achievement of objectives, including lack of implementation capacity, unrealistic and overambitious objectives, and shortages of time and funds. 16 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS RECOMMENDATIONS The program study highlighted 13 recommendations across four key issue areas: achievement of objectives, project impacts on biodiversity, sustainability of project activities and gains, and learning from lessons. Achievement of Objectives 1. Each project should conduct a capacity assessment exercise prior to project initiation. Limited implementation capacities have been cited as a major cause for inadequate project achievements. Though some skills, admittedly, are best learned by doing, individuals and institutions must possess enough skills to start doing and, therefore, learning. During implementation, priority should be given to developing the most relevant individual, institutional, and systemic capacities. Capacity benchmarks should be established, respecting the unique nature of each situation, and benchmark achievement at agreed times during project implementation should be a precondition for entering the next phase of project activities. 2. All protected areas projects should include related production land- scapes. One problem affecting project achievement may be the inadequate attention given to livelihood and tenure issues in project design and implementation. If local communities' access to protected areas is restricted, projects should meet their basic income and natural resource requirements by investing in and developing production landscapes linked to protected areas. Issues relating to tenure, property rights, and access must also be addressed as a part of each initiative. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 17 PROGRAM STUDY FINDINGS 3. Project preparation should include a project design workshop, where appropriate, that enables critical stakeholders in the country or region to offer early design ideas. After local experts and stakeholders have contributed to the initial project design, another consultation with a wide and diverse group of stakeholders and experts should be organized. This second consultation should ask participants to focus on circumstances under which, or reasons why, rhe proposed project or its objectives would be difficult to achieve. Such a "devil's advocate" feedback session would generate a realistic assessment of project feasibility. Biodiversity Impacts 4. To improve implementation, projects should break away from a time- bound schedule and evolve a new way of functioning. An "achievement schedule" should be applied instead, in which a phase or a project is considered complete when an objective is properly achieved. Whereas the ultimate goals must be clearly defined and must not ordinarily be changed, the strategies, priorities, and tasks must evolve dynamically, along with initial budgets that are flexible and indicative. 5. A far more effective, ongoing monitoring system is needed to deter- mine projects' impacts on biodiversity and related areas. A pre-initia- tion baseline study should record the status, trends, and rates of change of existing biodiversity resources; the available individual, institutional, and systemic capacities; and the relevant socioeconomic and political parameters. Impact indicators and standards must be formulated before- hand and applied to the baseline study. Priorities for action, project focus, and strategies must be determined using the baseline study results. Where the available data are not adequate, the assembly of a database (on the various aspects mentioned above) should be among the first project activities so that monitoring of impacts can be established. Where 18 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS required, control samples must also be identified to separate project impacts from other impacts. Sustainability 6. Funding patterns during the project must be compatible with the economic realities of the host country. The GEF Operational Strategy stresses the need to "finance actions that are cost effective." It must therefore be a project objective to demonstrate and operationalize ways to meet conservation objectives with the financial resources likely to be available on a sustained basis. There must be a continued movement away from "big budget," limited-time projects to long-term activities involving the same or lesser amounts of money, distributed over a longer time period according to agreed qualitative benchmarks of progress. 7. Two targeted research activities are recommended to demonstrate and evaluate conservation's contribution to economic growth. To develop the "political will" to conserve biodiversity, most governments must see con- servation as contributing to economic growth and security or, at least, not detracting from it. To both prove this point and provide a scientific basis for the type and extent of conservation required, the study proposed the following activities: 1) review existing methods for assigning economic values to biodiversity and, where necessary, develop, apply, and dissemi- nate additional methods and 2) disseminate (existing or new) credible information on the extent of biodiversity that should be conserved and the human use compatible with such conservation. 8. Identifying root causes of biodiversity degradation or decline must be the first step in any project planning or design process. As required by the GEF Operational Strategy, the root causes of biodiversity degradation, mainly proximate and immediate causes, must be addressed, as should factors that have inhibited the application or OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 19 PROGRAM STUDY FINDINGS success of remedial or preventive measures. Barring exceptional cases, projects should be championed only where there is a realistic chance of tackling at least the immediate and proximate underlying causes. In some cases, national governments or agency initiatives or policies might help address such causes. 9. Projects should involve the private sector in appropriate activities and support. While involvement of all stakeholders, especially NGOs and local communities, is essential-from planning through implementation and post-completion assessment-private sector involvement offers many advantages, especially in terms of financial and political sustainability. Therefore, conservation initiatives can be linked, for example, to com- mercial interests to demonstrate the economic potential in conservation, either through direct benefits or as a result of the public's expressed market preference for "green" products and companies. 20 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS PROGRAM STUDY FINDINGS 10. GEF should continue to strengthen its relationship to government sectors and implementing agencies. To enhance conservation activities' sustainability and increase projects' impacts, the GEF should strengthen its involvement with all government sectors. Involving government sec- tors beyond those focused on forestry and the environment should be the focus of a special effort. Similarly, GEF implementing agencies should continue to "mainstream" biodiversity issues within their organizations. 11. GEF and its partner institutions should establish a system of inde- pendent post-completion assessments. Some time after completion, reviewers can judge project impacts and the relative endurance of various gains and activities. Learning from Lessons 12. A range of ideas and experiences should be available for project designers and managers to consider, probe, analyze, modify, and apply appropriately. Someone who is designing or implementing a project rarely needs a whole set of rigid dos and don'ts, or a list of what has worked or not worked somewhere else. Instead, to gain easy and workable access to a wide-ranging set of ideas and experiences, people need access to those who have applied and implemented such ideas. They also need some time to link up with these ideas and experiences. 13. The GEF should set up a network of biodiversity practitioners and other experts to promote effective learning from past experience. It should be linked with ongoing and completed conservation initiatives, so that people designing and implementing projects have comprehensive access. Ultimately, the network should enable people to explore and discuss experiences and ideas and determine their relevance and applicability to current and future endeavors. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS 1 21 N1^~~~~~~~~~~~~~~~~~1 GEF CLIMATE CHANGE PORTFOLIO During the last decade, GEF has provided more than one billion dollars for more than 270 climate change projects in 120 countries. Discounting enabling activities and some short-term measures, 120 projects in 60 coun- tries demonstrate an impressive range of approaches to promoting energy efficiency, renewable energy, and, to a lesser extent, sustainable transport. SCOPE AND DISTRIBUTION The initial direction of the climate change portfolio was established by the Ad-hoc Working Group on Global Warming and Energy (AWGGWE), which was set up by GEF's Scientific and Technical Advisory Panel (STAP). Based on a STAP-developed list of technical interventions that reduce or limit emissions of greenhouse gases, early GEF projects often focused on demonstrating a variety of technologies. More recent projects have gone beyond technology demonstrations to focus on sustainable, market-oriented approaches that pilot new types of business models, financing mechanisms, demand-side incentives, and means of public involvement. Over time, the portfolio has become domi- nated by a smaller number of technology applications and strategies that do not necessarily focus on short-term greenhouse gas reduction, but rather reflect a complex balance of needs, interests, and interactions among governments and GEF implementing agencies. 22 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS CLIMATE CHANGE As the portfolio evolved, the need to support rural energy enterprises, provide financial intermediation, and attract private-sector financing became apparent. To respond to these needs and demonstrate how the GEF can leverage private sector resources to achieve global benefits, the International Finance Corporation (IFC) of the World Bank Group developed five projects featuring new forms of enterprise support, financial intermediation, and private sector co-financing. To date, these projects have used GEF funding commitments to mobilize more than S200 million of private sector co-financing. Impacts from two of these projects are described in cluster reviews (please see the Notes on Methodology section), while the other three have just started. MAJOR ACHIEVEMENTS AND IMPACTS Detailed reviews of two countries'-Mexico and China-GEF-financed climate change portfolios indicate that GEF projects are consistent with national priorities. Furthermore, the technology applications promoted in GEF projects are broadly relevant to at least some national objectives in virtually all countries. For example, the GEF has clearly helped with a number of core country priorities, such as promoting renewable-energy- based rural development and electrification programs and reducing electric power demand. Still, it is fair to say that most GEF projects do not result from coherent, integrated approaches to development and environment at the country level, but rather are conceived on an ad-hoc basis. Replication of successful outcomes and models has been increasingly emphasized in more recent projects. Because GEF projects are small relative to the scale of the climate change problem, there is a growing recognition that achieving global environmental objectives depends greatly on replication and demonstration of project benefits. Measuring GEF projects' achievement of global environmental objectives is chal- lenging because replication is difficult to monitor. Some projects-such as OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS 1 23 CLIMATE CHANGE those for efficient lighting, efficient refrigerators, rural solar photovoltaics (PV), coal-bed methane, and electric power demand-side management- have clearly been replicated. Replication of other projects has so far been minimal or remains undocumented. Eleven projects in the portfolio were completed as of early 2001. Approximately 30 more projects have been operational long enough for their impacts to begin to become evident. The impacts of these two groups of projects have been analyzed within the context of project application "clusters," as well as sustainability. Energy-efficient products. GEF-financed projects have demonstrated important and effective approaches for facilitating and accelerating demand for and supply of energy-efficient manufactured products, particularly lights (nearly 5 million of which have been installed through GEF projects), but also refrigerators, motors, and building materials. Some project approaches have produced sustained reductions in product prices and carbon emissions. Market gains for efficient lights, especially, have been sustained and replicated. The spectacular impacts of GEF's Poland Efficient Lighting Program are described in Box 5. Grid-connected renewable energy. GEF has helped implement important regulatory frameworks supporting grid-connected renewable energy, but only Mauritius and Sri Lanka have achieved significant progress so far. Other impacts have been limited to one-time technology demonstrations, research, and increased skills and awareness. The GEF's largest market impact has been in India, where direct and indirect influences on private- sector power project development and financing have resulted in nearly 1,000 MW of new renewable-energy generating capacity. 24 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS CLIMATE CHANGE BOX 5. BOOSTING THE MARKET FOR ENERGY-EFFICIENT LIGHTING BY LOWERING PRICES AND INCREASING DEMAND GEF's Poland Efficient Lighting Project (PELP), implemented by the International Finance Corporation, demonstrated how GEF projects can stimulate and transform markets for energy-efficient products. Initiated in 1995, PELP offered specially priced compact fluorescent lamps (CFLs) during the two winter "lighting seasons" between 1995 and 1997. Polish lamp manufacturers competed for subsidies allocated from a $2.6 million GEF grant. Manufacturer subsidies were a low-cost way to increase CFL sales: a $1 wholesale discount produced a $1.76 retail dis- count. This innovative program generated total retail price reductions worth $7.2 million, nearly three times GEF's initial funding. A Polish advertising firm created a special project logo that was used on various materials to signal quality and energy efficiency. As a trusted, non-industry endeavor, PELP's public education effort informed consumers about the benefits of energy-efficient lighting. The Polish Ministry of Education wrote that "as a result of the project, large numbers of students and teachers have gained useful insight into the use of energy and its impact on the environment." PELP's impacts highlight the project's success in meeting its goal to transform Poland's CFL market by breaking the pattern of low demand and high prices. Between 1995 and 1998, CFL prices decreased by 34 percent in real terms; the percentage of households using CFLs increased from 11 percent to 33 percent; new manufacturers entered the Polish market, enhancing competition; and, in a 2-year period, the market for CFLs nearly tripled. Two facts demonstrate the project's achievements in promoting energy-efficient lighting. First, the project-generated market changes have been sustained following the project's completion. More shops now sell CFLs, and 97 percent of CFL purchasers surveyed intended to replace burned-out CFLs with new CFLs. Second, based on requests from countries that had heard of the Poland project, GEF has funded the seven-country Efficient Lighting Initiative Project. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 25 CLIMATE CHANGE .~~ ~ --s . . . . . . . , ,, .. Off-g7id solar photovoltaics. Rural applications of solar PV constitute the largest single group of projects in the climate change portfolio. However, most of these projects have little or no implementation experience yet. Of roughly 600,000 solar home systems expected from approved projects, only 18,000 have been installed thus far. SeveraL business models and schemes to extend credit to businesses and consumers show promising potential for sustainablity and replication. Awareness of solar home systems is increasing in several countries, and technical standards are improving. The Impact of projects on rural electrification planniflg and policies has been small, but more recent projects are emphastzing these issues. After several financing schemes were tested In Sri Lanka, a highlv effective strategy was identifted and expanded with positive results. See Box 6 about the Sri Lanka Energy Services Delivery Project. 26 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS CLIMATE CHANGE BOX 6. CONSUMER CREDIT FOR SOLAR HOME SYSTEMS PROMOTES ENERGY-EFFICIENT TECHNOLOGY The Sri Lanka Energy Services Delivery Project demonstrated an exper- imental approach to developing consumer credit schemes for the instal- lation of off-grid solar home systems in rural areas. Approved in 1996, and initiated through the Worid Bank in 1997, tne project supported private sector participation in grid and off-grid electricity services using renewables and strengthened the environment for demand-side management implementation. Besides solar home systems, the project also supported investments in mini-hydro and windfarm projects. Several credit strategies were tested in succession, yielding valu- able lessons for future projects. The two first two strategies were abandoned because collections were too costly or time-consuming. For example, one dealer provided systems to 140 customers on a fee-for-service basis, but found monthly collection burdensome. "You need a strong collection system with good timing; otherwise cus- tomers will spend the money on something else (if the timing is off) and default. Or they will say they will pay next month and ask us to wait, or cite poor performance. It is a continuing problem. Also, we found that if customers don't own the system, they won't take proper care of it, and this increases our costs," the dealer said. Suppliers who tried offering dealer credit likewise found collections probiematic. With persistence, the project found success using a "microfinance model" in which solar home system dealers market, sell, service, and guarantee their products to rural consumers through their own local sales/service offices. Consumers obtain loans from Sarvodaya, a national microfinance institution with many local branches and strong ties to the communities in which it operates. Customers sign credit agreements with Sarvodaya, which in turn pays the supplier. Sarvodaya assumes responsibility for repayment and collections. The supplier provides maintenance service for the first 3 years, a 1-year warranty for the system, and a 10-year warranty for the PV module. Sarvodaya has now been upgraded to a participating credit institution to access the credit line directly. By June 2001, about 7,000 households had been electri- fied, representing a capacity addition of 345 KW. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 27 CLIMATE CHANGE Energy senvice companies. Viable energy service companies (ESCOs) have been established in two countries (Tunisia and China) as a result of GEF projects. Financing for existing ESCOs has been facilitated in Hungary. Other projects with ESCO components provide technical assistance, train- ing, and audits, but are not expected to lead to full-service (i.e., "perform- ance contracting") ESCOs. With the exceptions of China and Hungary, no other countries have documented ESCO replication or energy-savings impacts from GEF projects. Prospects for the emergence and sustainability of ESCOs appear strongest in China, where the GEF-financed project is pio- neering key policy and legal measures to allow growth of the ESCO indus- try. Several GEF projects appear to be increasing awareness and acceptance of ESCOs among industrial clients, policymakers, and financiers. Other applications. Projects for coal-bed methane, gas-pipeline leakage repair, fuel switching, decentralized wind power, utility demand-side management, village-scale mini-grids, and district heating-efficiency improvements have all shown significant impacts and could all be replicated on larger scales and used as models for ongoing and future GEF projects. So far, three projects-supporting coal-bed methane in China, decentralized wind in Mauritania, and demand-side management in Thailand-are being replicated. Box 7 describes the impacts and achievements of the Development of Coal-Bed Methane (CBM) Resources in China project. Sustainability. The climate change program study found that projects have promoted sustainability by: * Demonstrating models for sustainable businesses, both public and private * Promoting "market transformation" approaches that expand markets for energy-efficient products * Negotiating voluntary agreements with the private sector to take energy-inefficient products off the market * Creating new legal frameworks and precedents for ESCOs. 28 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS CLIMATE CHANGE BOX 7. RECOVERING CHINA'S COAL BED METHANE TO PROVIDE CLEAN ENERGY AND IMPROVE WORKER SAFETY The Development of Coal-Bed Methane (CBM) Resources in China project, implemented by UNDP with some $10 million in GEF funding, aimed to protect the local and global environment by demonstrating appropriate techniques and technologies to reduce methane emissions from coal mines. Methane is both a potent greenhouse gas and a high- quality energy source when captured and used effectively. Before the project, only one in six mines in China was recovering methane, of which less than half was being used. Moreover, coal-bed methane causes serious rmining accidents when not properly vented and recovered. The GEF project helped reduce deaths from mine explosions, which averaged nearly 400 people per year before the project. The project results clearly demonstrate how GEF support was instrumental to the formation of new policies, financial mechanisms, and institutional arrangements for CBM recovery and utilization, all of which laid the foundation for the development of and large-scale investment in a Chinese coal-bed methane industry. Methane was traditionally viewed as a nuisance, and there was a lack of both technologies for CBM exploration, recovery, and produc- tion and a policy framework to support its recovery. Benefits from the initiative, which achieved all of its primary objectives, include: • The substantial increase in the rate of recovery of coal-bed methane from 40 to 70 percent * An increase in the number of households using methane for cooking; four 5-ton boilers will eventually yield enough capacity to satisfy 165,000 households * Increased revenue from the sale of gas * The inclusion of CBM recovery curricula at technical colleges and universities v Substantial improvements in air quality and safety in mining areas and towns, and the virtual elimination of gas explosions in mines • The development of sufficient national capacity to drive commercial development, resulting in the formation of the China Coal-Bed Methane Corporation, which is authorized to direct national CBM programs * CBM's priority designation in China's national development plans. Source: The First Decade of the GEF: Second Overall Performance Study. Washington, DC: Global Environment Facility (2002) OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 29 CLIMATE CHANGE The study also revealed factors that can negatively influence sustainability: * Power utilities being privatized without considering the future existence and role of demand-side management units * Short-term power-purchase tariffs for grid-based renewable energy holding such tariffs hostage to fluctuations in conventional fuel prices * Consumer finance and rural businesses depending on the resources of GEF projects withouLt creating viable and sustainable commercial sources * Project implementation arrangements assuming an "equipment installa- tion and demonstration" role and failing to demonstrate business models. RECOMMENDATIONS Eight significant recommendations emerged from the program study: 1. Emerging lessons and good practices need to be better incorporated into project designs to promote learning. One of the key advantages of supporting projects through GEF's operational programs is the opportu- nity to disseminate lessons among all participants in GEF programs. The program study found that such dissemination is slow, and has improved only recently. Although annual project implementation reviews provide a forum for learning, the solar PV cluster review, completed in 2000, was the first concerted effort to pass on lessons from the climate change program. 2. Indirect influences and impacts should be recognized as key GEF results. Some of the key impacts of GEF-financed projects are indirect in the sense that they were not explicit objectives of the projects. In many cases, significant impacts from projects have been recorded during project preparation (PDF) phases or early in project implementation. 3. Planning and monitonng of the replication of project results needs improvement. In general, GEF projects have not been operational long enough to gauge the global environmental benefits accruing from 30 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS CLIMATE CHANGE replication. Still, most projects contain few provisions or plans for achieving or monitoring replication. 4. Project risk assessment and management needs to be strengthened. Implementation of projects is often hindered by project managers' inability to adjust to changes in markets, policies, macroeconomic conditions, co-financing, and government commitments. S. Project proponents should anticipate and address the difficulties associated with the transfer of technological know-how. Such know- how transfer has been more challenging than expected, and appears to be impeded by problems with technology acquisition and application to dom.estic conditiOnlS. 6. Long-term programmatic approaches require sufficient GEF "credi- bilitv" and exptieence in a countrv Cniintrv stakeholders need tlme to accumulate experience with GEF-financed prolects before they are both wilihng and able to apply long-term programmatic approacnes based on the principles of GEF operational programs. 7 The GF.'s hntential for inflitencing poicy needs to be hetter jtilized. The influence of GEF projects is evident in three policy areas-national codes and standards, electric power sector policies, and rurat electrifica- tion policies. But that influence has so far been modest, and additional policy areas could be addressed. 8. GEF projects' contributions to social benefits and poverty alleviation need to be assessed. The social and development benefits of GEF- financed projects, especially those focused on rural energy development, need to be better documented. An assessment of these benefits will help coun-rites imi1iprove thLeir sustainable UCeveljop(L-Lent prograu..Is. IMVIany projects do promote strong beneficiary participation, but fail to document benefits or impacts occurring in local communities. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 31 ^;s~~~~~~~~~4 : ax ~ ~ ~~~~r . GEF INTERNATIONAL WATERS PORTFOLIO At the time of the International Waters Program Study, GEF had provided support to 41 full projects and four medium-sized projects (MSPs) targeting international waters concerns. To date, 11 of these projects have been completed. In addition, project development facility (PDF) funds have been approved for 22 projects that may enter the GEF portfolio upon further development. Not including co-financing, overall GEF funding to international waters efforts from 1991 to FY2000 totals $329 million. SCOPE AND DISTRIBUTION Overall, GEF's projects and PDFs align well with the GEF Council's latest strategic guidance. Due to changing international perspectives on priority problems in, and threats to, aquatic environments, GEF has modified its allocation of projects and shifted its emphases among the international waters operational programs. The current emphasis on undertaking a science-based transboundary diagnostic analysis (TDA) prior to designing a strategic action program (SAP) is appropriate for projects addressing water bodies and integrated land and water issues (operational programs 8 and 9, respectively). For 32 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS INTERNATIONAL WATERS example, Box 8 presents the Strategic Action Program of the Binational Bermejo River Project in which TDAs guided the development of a bina- tional management plan. There does appear, however, to be a need for more guidance from the GEF regarding the nature of TDAs and the man- ner in which they lead to, and are distinct from, the development of SAPs. BOX 8. BUILDING LOCAL AND BINATIONAL SUPPORT FOR IMPROVED MANAGEMENT OF THE BERMEJO RIVER BASIN This modestly funded, UNEP-implemented international waters proj- ect is helping Bolivia and Argentina create a strategic action program (SAP) that will enable them, through coordinated and complementary actions, to address the transboundary needs of the Bermejo River Basin. The SAP for the river illustrates how transboundary diagnostic analyses (TDAs) and strategic action programming can foster local and binational support to improve river basin management. The key transboundary concerns are accelerated sedimentation from soil erosion and massive flood-generating flows that extend far downstream. The governments, local communities, NGOs, and private sector of both countries are working together toward a shared understanding of problems, causes, and possible solutions. Local populations are participating in demonstration pilots to test solutions that are both ecologically and economically sustainable. The project represents a step forward in the holistic management of the Bermejo Basin. With its inclusive approach-combining basic data gathering, the pilot demonstration activities, and stakeholder participation in the form of workshops from the local through bina- tional levels-the project is attacking the basin's problems on several fronts. The result: the necessary institutional, legal, and informational foundations are in place now to enhance and restore the river system's environmental functioning and enable natural resources protection within the various basin ecosystems. A recent evaluation of the project concluded that the participatory approach to this project proved to be decisive in achieving project objectives and has great potential as a model for Latin America. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 33 INTERNATIONAL WATERS The regional distribution of international waters interventions is relatively well-balanced and appropriate. Overall, Africa has the largest share of GEF international waters funding ($104.5 million), followed by Asia ($90.8 million), Latin America and the Caribbean ($56.6 million), Eastern Europe ($40.1 million), and small island developing states (SIDS) ($12.3 million). Another $20.9 million has been allocated to global projects. MAJOR ACHIEVEMENTS AND IMPACTS Overall perfonnance of portfolio. Among individual projects and opera- tional programs, overall project performance varies. Projects addressing water contaminants (Operational Program 10) and several focused on inte- grated land and water issues were clearly successful. The performance of waterbody-based projects is more varied. In terms of three indicators- process, stress reduction, and environmental status-most of the impacts were at process levels. This is not surprising, given the long time required to detect actual improvements in international waters environments. Still, the review of completed projects showed that some present and future reduc- tions in stress on the marine environment can be directly attributed to GEF projects. The degree of these interventions' effectiveness in reducing stress in the regions concerned is difficult to quantify, however, due to the absence of uniform tools comparing the impacts of several activities and sources. Demonstration projects. The demonstration projects are generally both well conceived and satisfy the criteria for GEF support. The potential incremental benefits that can accrue from both global and regional demonstration projects continue to justify allocating resources under the contaminants-based operational program to some demonstration proj- ects of similar nature. Box 9 describes the numerous demonstration sites at which local, national, and regional partners are working together to protect the seas of East Asia. In four site visits, only limited impacts were 34 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS INTERNATIONAL WATERS BOX 9. DEMONSTRATION PROJECTS PROMOTE PARTNERSHIPS AND IMPROVE ENVIRONMENTAL MANAGEMENT IN EAST ASIAN SEAS The UNDP-implemented project, Partnerships in Environmental Management for the Seas of East Asia (PEMSEA), is assisting the ripar- ian countries of the East Asian Seas to collectively protect and manage their heavily stressed coastal and marine environments through intergovernmental and intersectoral partnerships. Twelve countries participate in the project, which has a total cost of $28.5 million, including a $16.2 million GEF grant. PEMSEA is creating partnerships at local, national, and regional levels to achieve more effective management of the coastal and marine environment. Public-private partnerships combine the private sector advantages (access to finance, technological knowledge, and management efficiency) with public sector concerns, such as social responsibilities, environmental awareness and job creation. Methods for maximizing both environmental protection and broad- based partnerships are being developed at a number of demonstra- tion sites. PEMSEA has six demonstration sites focusing on integrated coastal management in Cambodia, Indonesia, DPR Korea, Malaysia, Thailand and Vietnam, and the Pilot Phase project preceding PEMSEA focused on three demonstration sites-Batangas Bay, Xiamen Bay, and Malacca Straits. Each site is formulating and adopting integrated approaches to managing land and water uses as part of national coastal and marine policy and strategies for addressing transboundary environmental issues. The aim is to create investment opportunities and mechanisms for improving environmental stewardship and coastal/marine resource development and management, as well as to enhance opportunities for collaboration among civil society groups, local communities, environmental journalists, and others. To achieve its objective of reducing disparities in the environmental protection and management capacities of the participating countries, PEMSEA is organizing training courses that will help develop skills, especially at the local level, for carrying out necessary planning for and sustainable management of coastal and marine areas. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 35 INTERNATIONAL WATERS identified, largely due to projects' insufficient maturity for generating quantifiable environmental benefits. While much has been accomplished since the Pilot Phase to reorient program direction in response to the conclusions of the Pilot Phase Evaluation and the first Study of GEF's Overall Performance (OPS1), both yielded recommendations that have yet to be addressed. International waters project contributions. GEF projects have made, and continue to make, significant contributions to guarding the health of international waters. Its projects have promoted and assisted in imple- menting existing global and regional agreements that seek to protect and restore freshwater and marine ecosystems. Box 10 relates the multicountry agreements essential to the GEF project, Danube/Black Sea Strategic Partnership - Nutrient Reduction Investment Fund. 36 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS INTERNATIONAL WATERS BOX 10. A STRATEGIC PARTNERSHIP TO TACKLE POLLUTION IN DANUBE/BLACK SEA BASIN Just as they share national borders, the 17 riparian countries of the Danube/Black Sea basin share a variety of water-related environmental problems. This comprehensive partnership project is the culmination of four previous GEF-funded projects, the first of which began in 1991. Among other results, they assisted the countries in identifying the priority transboundary issue in both the river basin and the Black Sea ecosystem: excessive nutrient pollution and associated eutrophication from agricultural, municipal, and industrial sources. Each country has prepared a Strategic Action Program (SAP) of policy, legal, and institu- tional reforms and priority investments targeting this issue. This final phase of GEF assistance will support implementation of these essential reforms and investments. The project's objectives reflect some of the lessons learned and rec- ommendations made in the preceding Danube and Black Sea projects: * The countries will adopt and implement policy, institutional, and regulatory changes to reduce nutrient discharges, restore nutrient sinks, and clean up and prevent toxics "hot spots," thus gaining experience in investing in pollution prevention. * The countries will cap nutrient releases to the Black Sea at 1997 levels and set toxics reduction targets, both of which will be formal- ized as specific protocols or annexes to the relevant conventions. * GEF implementing agencies, European Union, and other donors will work mainstream nutrients and toxics reduction commitments into their regular programs. * The private sector, government, NGOs and communities will test tech- niques for restoring nutrient sinks and reducing non-point source pol- lution through integrated land and water management partnerships. Three principal elements comprise the strategic partnership: a GEF Black Sea regional capacity building and technical assistance compo- nent, implemented by UNDP and UNEP; a matching component for the Danube River basin, implemented by UNDP; and a GEF/World Bank Partnership Investment Fund for Nutrient Reduction, that will focus on investments to help individual countries reduce nutrient pollution. Several intergovernmental and interagency mechanisms have been created to promote cooperation and coordination among partners. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 37 INTERNATIONAL WATERS SELECTED RECOMMENDATIONS Based on these findings, a number of recommendations highlight how GEF's international waters program can become more effective and responsive. 1. The portfolio would benefit from an effort to clarify the guidance that directs portfolio development. Among other things, ambiguity in the guidance complicates the process of sharing lessons among projects. The absence of sufficient or clear portfolio guidelines may inhibit support for future projects by participating countries. 2. Project evaluations should include more comparable information on process, stress reduction, and environmental status indicators. It is too early to expect much information regarding measured improvements in international waters environments from GEF interventions. But, as GEF's experience increases, preparations should be made and guidelines proposed to ensure that more comparable information on process, stress reduction, and environmental status indicators is included in future project evaluations. 3. GEF should maintain its support for the use of science-based trans- boundary diagnostic analyses in international waters projects. The application of science-based transboundary diagnostic analyses (TDAs) to facilitate countries' agreements on joint remedial or preventive actions (in the form of strategic actions programs, or SAPs) should continue. However, where feasible, efforts should be made to shorten the time required to complete a TDA. 4. The international waters portfolio would benefit from an interagency advisory group to guide the portfolio's development. Given the complex nature of international waters projects, which often require a large number 38 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS INTERNATIONAL WATERS of countries and implementing agencies to cooperate, a GEF Secretariat- based interagency advisory function would help ensure the coordination and effective development of the international waters portfolio. S. The roles and definitions of the current international waters operational programs should be reviewed. The operational programs addressing water bodies and integrated land and water (OPs 8 and 9) should be redefined to make them mutually coherent and consistent with the new program on integrated ecosystem management (OP 12). 6. The definition of the operational program on contaminants (OP 10) should be revised. Its emphasis on ship-derived impacts on international waters should be reduced, while increasing the focus on land-based activities and their effects, including those mediated by atmospheric transport pathways. OVERVIEW OF GEF PROGRAMAND PROJECT RESULTS j 39 GEF OZONE PORTFOLIO Countries with economies in transition (CEITs) faced difficulties in meeting industrialized countries' phase-out schedules agreed under the Montreal Protocol. As a result, a number of CEITs were in non-compliance with the Protocol's control measures. Most CEITs were ineligible to draw on the Multilateral Fund for the Implementation of the Montreal Protocol to address the challenges of phasing out ozone depleting substances (ODS). Beginning in 1992, GEF offered assistance specifically to CEITs for phasing out ODS. By the end of the decade, 19 CEITs had received GEF funding for preparing and implementing their ODS phase-out programs. The Study of Impacts of GEF Activities on the Phase-Out of Ozone Depleting Substances was conducted in 1999 to gauge the state of imple- mentation of the Montreal Protocol in all CEITs implementing ODS phase-out programs with GEF support. The study team collected data on ODS production and consumption in each applicable CEIT, including sectoral data and data on ODS use by the various enterprises that were implementing subprojects within the framework of GEF projects. Actual trends in ODS production and consumption were compared with the original implementation and phase-out schedules of the national country programs and GEF project documents, highlighting progress as well as any problems. 40 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS OZONE DEPLETION SCOPE AND DISTRIBUTION GEF support to CEITs generally followed the pattern of preparing a national country program for ODS phase-out, preparing the "GEF proj- ect," appraising the project, and implementing the project. The country program included base year data on ODS production and consumption and identified proposed subprojects. The so-called "GEF project" defined in greater detail the activities, or subprojects, to be carried out. During project appraisal, goals were defined precisely and subproject planning was completed, with implementation beginning after the grant agreements were signed by the parties. Different base years were defined in the respective country programs. These range from 1991 for the Czech Republic and Slovakia to 1996 for Azerbaijan, Turkmenistan, and Uzbekistan. These country program base years generally indicate the start of planning for ODS phase-out with GEF support. By late 2001, GEF had allocated $156 million for 20 ozone projects in 19 countries across Eastern and Central Europe and the region of the former Soviet Union. Altogether, the projects attracted a total of S1 76 million in co-financing. MAJOR ACHIEVEMENTS AND IMPACTS Non-compliance of CEITs. Most of the CEITs receiving GEF support have faced considerable difficulties in fulfilling their obligations under the Montreal Protocol to phase out ODS contained in Annexes A and B of the ProtocoL Except for Hungary, Slovakia, and Slovenia (which was reclassi- fied as an Article 5 country after 19959), all other CEITs studied have at times been non-compliant with the control measures of the Montreal Protocol. By 1997-1998, Bulgaria and Poland achieved compliance and OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS 1 41 OZONE DEPLETION the Czech Republic had nearly achieved compliance. Non-compliance has prevailed in the other eight CEITs that have implemented GEF projects, as well as in Estonia, which is likely to implement its phase-out program with GEF support in the near future. Box II describes the progress achieved in the countries GEF assisted with phasing out ozone-depleting substances. BOX 11. COMPLETING THE PHASE OUT OF OZONE-DEPLETING SUBSTANCES Since 1992, GEF has assisted 19 countries with economies in transition in phasing out ozone-depleting substances (ODS), as mandated by the Montreal Protocol of the Vienna Convention on Ozone Layer Depleting Substances. All GEF-funded ozone projects followed a similar strategy in which a series of investment subprojects were carried out to help businesses switch to ozone-friendly technologies. Non-investment support-in the form of technical expertise, support for training, dissemination of project lessons within and among countries, and assistance in establishing appropriate legal frameworks-also played a crucial role. Today, most of the countries in Eastern and Central Europe have largely made the tran- sition to ozone-friendly technologies; Bulgaria, Czech Republic, Hungary, and Poland have completed their GEF-funded projects, and all achieved full or nearly full compliance with the Montreal Protocol. GEF's approach to phasing out ODS offers a model for other global environmental ventures. For each project, a country-wide approach was developed in close cooperation with the government, in-country expertise was sought out, and specific strategies were created for the affected industrial sectors, which used or manufactured aerosols, foams, refrigerants, and solvents. Also, the alternative technologies being substituted were evaluated as part of an integrated environ- mental assessment. This approach generated a variety of supportive and innovative policies, including economic instruments like taxes, emissions charges, and import fees and political measures such as import and use bans and import and export licensing systems. According to Montreal Protocol reports, total consumption of ODS in economies in transition decreased from about 190,000 tons in the late 1980s to less than 15,000 metric tons in the late 1990s-a drop of more than 90 percent. 42 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS OZONE DEPLETION Progress in ODS Phase-out. According to official data reports under Article 7 of the Montreal Protocol, total consumption of Annex A and B substances in the countries reviewed decreased from about 190,000 ODP tons in the second half of the 1980s to less than 15,000 ODP tons by 1997, a drop of more than 90 percent. Production has been reduced accordingly. Of the four original ODS producers among CEITs, only the Russian Federation has sustained a considerable production capacity, which was set to be scrapped or converted by mid-2000. The Russian Federation continually accounted for over two-thirds of ODS production and consumption of CEITs receiving GEF support. On average, consumption of Annex A and B substances in GEF recipient countries has declined by more than 75 percent from base year levels (from more than 66,000 ODP tons to less than 15,000 ODP tons in 1997). RECOMMENDATIONS Short of compliance, significant overall progress has nevertheless been attained towards full phase-out of Annex A and B substances. However, considerable efforts will be needed to complete and sustain the phase-out of CFCs and other Annex A and B substances. The central and eastern European countries by and large appear to have completed the transition to ozone-friendly technologies successfully. The major remaining consumers of Airnex-A and B substances are the Newly Independent States and the Baltic States. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS J 43 K S.~~~~~~~~~~~~R '-dAa -x GEF LAND DEGRADATION PORTFOLIO The GEF Land Degradation Linkage Study reviewed an estimated 103 projects in GEF's overall portfolio that possess linkages to land degrada- tton. Of these, 39 projects are considered to have strong land degradation components: Twenty-seven projects (69 percent) are in the biodiversity focal area, six are in climate change, and six are in international waters. Fourteen of these projects derived from the Pilot Phase, while the remaining 25 were initiated after 1995. In general, a detailed study of project documents shows that the land degradation component of projects is not as strong as suggested in previous GEF reports, though the desk analysis may not reveal actual field-level actions and priorities. Nonetheless, a statistical trends analysis suggests that, with the exception of medium-sized projects, the number of land degradation projects and resources allocated to land degradation has decreased since 1997, although a significant number of projects are currently in pipeline. SCOPE AND DISTRIBUTION An initial investigation into the declining levels of both the number of projects and the funding allocated suggests some basic causes that have 44 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS LAND DEGRADATION limited land degradation linkage activities. First, project concepts are usually based on focal area activities rather than linkage activities such as land degradation. Second, with 69 percent of projects with land degradation linkages being implemented in the biodiversity focal area, and 77 percent of these located in or near protected conservation areas, land degradation activities may be secondary considerations. Protected areas are not usually regions of high land degradation and project activities in such areas, though obviously important to biodiversity, do not directly address land management problems or land degradation issues. Climate change projects have not focused much on land degradation in recent years because GEF's current climate change operational programs do not address land management issues, though there seem to be oppor- tunities to expand this linkage with a new operational program. International waters projects have included land degradation mitigation in some cases, but the specifics have tended to focus on the institutional and water pollution aspect of the problem rather than land degradation mitigation and catchment management activities. A third reason for the lack of strong land degradation components has been the difficulty in estimating incremental costs of mitigation activities when activities usually provide local as well as global benefits. An attempt to reduce this problem has led to a new operational program with "cost sharing" opportunities. In general, the large majority of current projects identified as land degradation linkage projects have been designed to primarily address other environmental concerns and land degradation mitigation has been a priority only in some cases. Around 46 percent of land degradation projects are in Africa, with 21 percent in Asia and 19 percent in Latin America. There are a few each in the Middle East and East and Central Europe, and few more designated as global. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 45 LAND DEGRADATION MAJOR INSIGHTS AND IMPACTS The analysis of project portfolios applied an imperfect mode of project evaluation that did not enable assessing project impacts on land degra- dation mitigation, though this was addressed in part through the focal areas assessments, particularly of biodiversity, that followed the land degradation study. The more detailed review of project documents did provide some clear findings: Land degradation focus. The linkage study found that the number of GEF projects possessing a strong land degradation component is fewer than previously thought. While projects that have a strong land degradation component have been allocated about $278 million by the GEF, the specific land degradation components of all linkage projects probably comprises around $50 million in GEF funding. Project effectiveness. The most effective linkage projects appear to be those where land degradation is both recognized as an initial component of the problem and is addressed in the solution. Additionally, projects with a people/land management focus tend to address land degradation issues more directly. Focal area opportunities. In biodiversity linkage projects, rangeland envi- ronments have created the best land degradationJbiodiversity synergies. In international waters projects, land issues, while included, generally have been given less prominence in project implementation. In general, the current portfolio strategies and project development structure have created significant barriers to incorporating land degra- dation as a critical component of the GEF agenda. The situation can be improved within the current structure, but the agencies will need to make a coordinated approach to achieve a stronger portfolio. 46 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS LAND DEGRADATION RECOMMENDATIONS There are two key recommendations that prescribe possible action within two distinct time frames: 1. GEF should explore ways in which land degradation issues of global significance can be tackled more directly and successfully. This broad- based undertaking should take into account Council recommendations and guidelines over the past 4 years and the results of two Scientific and Technical Advisory Panel workshops, together with existing constraints. 2. In the meantime, several immediate actions are essential to improve the focus on land degradation witbin the current guidelines and con- straints. Guidelines for ongoing action and an implementation plan and process should be developed with the agencies, in a continuation of the close coordination that has marked the development of linkage projects. Moreover, by taking advantage of the new Land and Water Initiative (OP 12), and Conservation and Sustainable Use of Biodiversity Important to Agriculture program (OP 13), project design issues can be addressed and land degradation approaches improved. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 47 Biodiversity. The Biodiversity Program Study was conducted between September 2000 and March 2001, in collaboration with the three GEF implementing agencies (UNEP, UNDP, and the World Bank) and the GEF Scientific and Technical Advisory Panel (STAP) According to the objectives of the program study, the GEF biodiversity portfolio (excluding projects supporting biodiversity enabling activities), as of June 30, 2000, was divided in two cohorts of projects- Cohort 1 all full and medium-sized projects under implementation as of June 30, 1998, plus all completed projects (the "mature portfo- lio," 82 projects, $500 million) and Cohort 2 all full and medium-sized projects that started implementation or entered the GEF Work Program between July 1, 1998, and June 30, 2000 (the "new portfolio,' 128 projects, $630 million) The methodology of the BDP Study used two distinct but interrelated approaches a quantitative analysis focustng on the coverage of the portfolio and a qualitative assess- ment of the achievements, initial impacts, and lessons learned of the GEF biodiversity projects. In addition, the study evaluated how new projects have benefited from lessons learned in past projects. The qualitative and quantitative analyses covered projects from the "mature portfolio" (Cohort 1), while the evaluation on the lessons learned feedback mechanisms mainly reviewed the "new portfolio" (Cohort 2) The qualitative analysis of projects from Cohort 1 included eight projects that were visited by members of the BDP Study team in the following nine countries- Argentina, Central African Republic and Gabon (one project), Indonesia, Mauritius, Peru, Philippines, Sri Lanka, and Yemen. A selected group of projects in Cohort 2, classified under GEF Operational Program 3 (Forests), were reviewed regarding how new projects have benefited from lessons learned and best practices from past projects. In addition, the study reviewed the mechanisms uti- lized in the three implementing agencies and the GEF Secretariat to feed lessons learned from past projects into the design and implementation of new projects The study asked the followEng questions: What have been the major achievements and impacts in terms of conservation and sustainable use of biodiversity resources, capacity development, stakeholder participation, and project sustainability? How far and how well did the projects achieve their objectives? What are the outstanding lessons and examples of best practices7 What are the major implementation issues/risks/assumptions that may jeopardize the achievement of objectives? What has been "covered" by GEF projects? Climate Change. The study that produced Results from the GEF Climate Change Program was initiated in June 2000. In support of the overall program study, targeted reviews were conducted for projects focused on seven areas' 1) energy-efficient products manufacturing and marketing, 2) grid-connected renewable energy, 3) energy service companies (ESCOs), 4) solar thermal power plants, 5) rural solar PV systems, 6) climate change portfolio coverage, and 7) China and Mexico, for which country reviews assessed GEF projects' collective impacts on country and global environmental objectives 48 1 OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS NOTES ON METHODOLOGY The comprehensive study briefly synthesizes the results from these reports, organized by the four key questions identified in the introduction. More detailed assessments of the clus- ters, portfolio coverage, and country reviews can be found in the relevant specific reports. Due to the confines of time and resources available for the program study, it was not possible to definitively assess the degree to which country needs have been met through GEF-financed projects. Such an assessment would require comparing needs existing before project initiation to those existing now. Such data are often lacking or difficult to obtain. In addition, national communications under the United Nations Framework Convention on Climate Change (UNFCCC) do not always fully reflect national development priorities. International Waters. The GEF International Waters Program Study was conducted from August 2000 to February 2001. The study was undertake-n by a team comprising an independent lead consultant, representatives of GEF's monitoring and evaluation (M&E) unit, GEF Secretariat, its three implementing agencies, and STAR In undertaking its work, the review team utilized a collection of relevant documents and databases provided by the GEF Secretariat and the implementing agencies, broad consultations with GEF stakeholders, participation at the First GEF Biennial International Waters Conference in Budapest, Hungary, and four field-based reviews. In examining the portfolio of international waters projects, the study reviewed the coverage, results, and preliminary impacts of GEF's international waters programs. It also sought to determine the extent to which current GEF policies align with strategic guid- ance adopted by the GEF Council and recommendations provided during both the Pilot Phase Review and the OPS1.1° Furthermore, project data was analyzed using perform- ance indicators, GEF policies on priority issues in international waters were assessed, and the program's relative alignment with contemporary intergovernmental initiatives regarding damage and threats to freshwater and marine environments was examined. Ozone Depietion. The Study of Impacts of GEF Activities on the Phase-Out of Ozone Depleting Substances was conducted in 1999 to gauge the state of implementation of the Montreal Protocol in all CEITs implementing ODS phase-out programs with GEF support. The study team collected data on production and consumption of ODS in each applicable CEIT, including sectoral data and data on ODS use by the various enterprises that were implementing subprojects within the framework of GEF projects. By comparing the actual trends in ODS production and consumption with the original implementation and phase-out schedules contained in the different national country programs and GEF project documents, the progress as well as any problems were highlighted. Land Degradation. The GEF Land Degradation Linkage Study reviewed a total of some 103 land degradation linkage projects in a desk analysis. Thirty-five were selected for a more detailed assessment, and eight of these were chosen for specific review. In an attempt to identify the degree to which land degradation was being addressed in the proj- ects, 39 of the 103 projects were classified as having strong land degradation components. OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS | 49 ENDNOTES 1 The First Decade of the GEF: Second Overall Performance Study. Leif Christoffersen, Ogunlade Davidson, Maria Concepcion Donoso, John Fargher, Allen Hammond, Emma Hooper, Thomas Mathew, and James Seyani. Washington, DC: Global Environment Facility (2002). 2 Biodiversity Program Study. Shekhar Singh and Claudio Volonte. Evaluation Report #2-01. Washington, DC: Global Environment Facility (2001). 3 Results from the GEF Climate Change Program. Evaluation Report #1-02. Washington, DC: Global Environment Facility (2002), (Synthesized by Ramesh Ramankutty and Eric Martinot). 4 International Waters Program Study. J. Michael Bewers and Juha I. Uitto. Evaluation Report #1-01. Washington, DC: Global Environment Facility (2001). 5 Study of Impacts of GEF Activities on Phase-Out of Ozone Depleting Substances. Sebastian Oberthur. Evaluation Report #1-00. Washington, DC: Global Environment Facility (2000). 6 GEF Land Degradation Linkage Study. Leonard Berry and Jennifer Olson. Monitoring and Evaluation Working Paper #6. Washington, DC: Global Environment Facility (2001). 50 | OVERVIEW OF GEF PROGRAM AND PROJECT RESULTS ENDNOTES 7 According to the objectives of the program study, the GEF biodiver- sity portfolio (excluding projects supporting biodiversity enabling activities), as of June 30, 2000, was divided in two cohorts of projects: Cohort 1: all full and medium-sized projects under implementation as of June 30, 1998, plus all completed projects (the "mature portfolio," consisting of 82 projects to which $500 million was allocated) and Cohort 2: all full and medium-sized projects that started implementa- tion or entered the GEF Work Program between July 1, 1998, and June 30, 2000 (the "new portfolio," consisting of 128 projects to which $630 million is allocated). 8 It should be noted here that ongoing projects were assessed on the basis of their achievements in relation to the stage of implementation they were in. However, whereas there is no possibility ro improve the performance of completed projects, ongoing projects have the opportunity to achieve their objectives before completion. 9 Georgia and Moldova were also reclassified as operating under Article 5 after they received GEF support for country program preparation. They were not covered by the program study, as the implementation of their country programs was supported, after reclassification, by the Multilateral Fund. 10 Study of GEF's Overall Performance. Gareth Porter, Raymond Clemencon, Waafas Ofosu-Amaah, and Michael Philips. Washington, DC: Global Environment Facility (1998). OVERVIEW OF GEF PROGRAM AND PROJECT RESJLTS I 51 Credits Design: Studio Spark Printing: Whitmore Print & Imaging Photo Credits: p. 4: © Photodisc, © Photodisc , Francisco Gattoni/UNESCO; p. 6: World Bank archives, World Bank archives, © Photodisc; p. 10: Curt Carnemark/World Bank; p. 16: Anders Ekbom/Bonesa Electricity (Pty) Ltd.; p. 20: Dan Miller; p. 22: Simon Tsuo/Department of Energy/NREL, © Photodisc, Curt Carnemark/World Bank; p. 26: Harin UllaUlDepartment of Energy/NREL; p. 32: © Photodisc, World Bank archives, © Photodisc; p. 36: World Bank archives; p. 39: Edwin Huffman/USAID; p. 40: © Photodisc, danube: research.com, World Bank archives; p. 44: Ray Witlin/World Bank, UNESCO, (D Photodisc; p. 47: World Bank archives o tc In 2002, an independent external team completed a compre- -\hensive>eealuation of GEF's results-and impacts, relations with global conventions, programs jand policies,. and institutional reigtionships\This evaluatio Second Overall' Performance Cstodewas presented in The Frst DecaIdeof the GEF,.also known +;.i 's-the O,2 BeforeWthe-evaluation, 'GEF's Monitoring and Evaluation Unit undertook-'five-program studies with the- goal of generating in- depth progr ,d,;,projRect material. Teams of intenational consultants and staf fi'e bers of the GEF and its implementing agencies United»ations Development Programme, United NationsgEnvironmentWrogramme, and the: World Bank -carried out program .studie on biodiversity, climate ehange, and internaiwional waters,-while independent academric-nstitutions perfor'im-ed a programrstudy on ozone-depleting substances and a linkage'-study on land degradation. ~~~V. Overview-ol CEF;.'-Prog?`ams and Project Reslts summarizes the findings ,otfthe4ive prograrn studies as'a complement to the broad-based'6cncluI;ions presented'in the OPS2 report published earl,ier this year. In.each focal area, several project cases illustrate P.ticular lessons and opportunities for successful replication of proiUcts NPThese lessonsr-ape.'deawnsfr m project evaluations and re\ie% .lIx'\UNDP, UNEP,' and the World Bank.' 4 t' V- AA ... .; ~ $ . r _ _ _ _ _ _ _ _ _ _ ! _ _ _ _ _ _ _ _ _ _ _ _ _ j~ -. ''Ysa|ts*Em