99353 20 GEF 20 STRATEGY FOR THE GEF Table of Contents Message from the CEO and Chairperson................................................................... 3 Chapter 1: Context........................................................................................................... 5 Global Environmental Trends......................................................................................................................... 5 The Changing Landscape for Environment Finance..................................................................................11 The GEF’s Capabilities and Strengths..........................................................................................................11 Chapter 2: Positioning the GEF for 2020 and Beyond.............................................15 Chapter 3: Key Strategic Priorities..............................................................................17 Addressing Drivers of Environmental Degradation................................................................................. 17 Delivering Integrated Solutions.................................................................................................................... 21 Enhancing Resilience and Adaptation........................................................................................................ 23 Ensuring Complementarity and Synergies in the Global Financing Architecture............................. 25 Choosing the Right Influencing Models..................................................................................................... 25 Chapter 4: Core Operational Principles................................................................... 29 Mobilizing Local and Global Stakeholders................................................................................................ 29 Improving Operational Efficiencies ............................................................................................................ 31 Strengthening Results Management.......................................................................................................... 31 List of Acronyms............................................................................................................ 33 Endnotes.......................................................................................................................... 34 2 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y Message from the CEO and Chairperson I came to the job of CEO and and outside the GEF partnership have confirmed these chairperson of the Global Environment convictions. Many global environmental trends show rapid Facility (GEF) with very high ambitions deterioration, and pressures on the environment are set to for the GEF. These ambitions were increase in the years to come. The situation is urgent—and rooted in two convictions. the urgency is increasing by the day. We need to build on the GEF’s solid foundations to further lift our game. The first was the conviction that the GEF’s work focuses on a central challenge facing all of us today. This is the Against this background, I am delighted to put forward the challenge of ensuring that continued growth and prosperity GEF2020 strategy. GEF2020 emphasizes the need for us to happen in a way that does not fundamentally compromise support transformational change and achieve impacts on a the very foundation on which we have built our societies—a broader scale. The strategy calls for the GEF to focus on the way that does not jeopardize the natural systems that drivers of environmental degradation, and it addresses the provide us with food, fiber, materials, and a stable climate. importance of supporting broad coalitions of committed stakeholders and innovative and scalable activities. The second was the conviction that the GEF has a vast potential to help the global community meet this challenge. GEF2020 provides a path forward for the GEF to become a The GEF spans every environmental domain. It provides champion of the global environment. I am excited about the funding to more than 140 countries through a network prospects of working with all members of the GEF family in of first-class agencies, and through its 20-plus years of the coming years to make these convictions a reality. hard work it has accumulated an impressive amount of experience and know-how. Naoko Ishii During the two years since I came on board, my GEF CEO and Chairperson experiences and interactions with people from both within Washington, D.C., May 13, 2014 G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 3 4 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y CHAPTER 1 Context This section briefly reviews key global environmental growing demands for food, fresh water, timber, trends and the evolving landscape of environmental fiber, fuel, and other goods. As a result, some 60 finance. It also summarizes the Global Environment percent of ecosystem services globally have been Facility’s (GEF’s) main capabilities and strengths degraded in the past 50 years. In the same period, that can be built on to position the GEF for 2020 as highlighted in the most recent report from the and beyond. Intergovernmental Panel on Climate Change (IPCC), addressing climate change has emerged as perhaps Global Environmental Trends the pivotal environmental and economic challenge that the world faces today. Healthy and well-managed ecosystems, together with a stable climate, are critical for the prospects Despite notable successes, overall global for long-term sustainable development. Ecosystems environmental challenges have intensified since provide a range of services to people and societies. the 1992 Rio Earth Summit. Concerns that the These benefits include provisioning services environment was starting to face challenges of such as food, water, timber, and fiber; regulating global proportions date back to the late 1970s services that affect climate, floods, disease, wastes, and early 1980s. The 1992 Rio Earth Summit and water quality; cultural services that provide represents a landmark in international efforts to recreational, aesthetic, and spiritual benefits; promote environmental protection and sustainable and supporting services such as soil formation, development and was the birthplace of the photosynthesis, and nutrient cycling. Consequently, Biodiversity and Climate Change conventions and as noted in the GEF-supported Millennium the GEF. The world’s scientific understanding has Ecosystem Assessment, healthy ecosystems and improved substantially during the past two decades, a stable climate are a vital foundation for broad enhancing global knowledge about challenges, risks, economic prosperity. In many instances, they also and opportunities for altering future trends. Some enhance social inclusion by meeting the needs of Earth system and environmental scientists have the poor and vulnerable, both women and men, argued that planetary boundaries, defined as a “safe and reduce the risk of conflict and insecurity. operating space for humanity,” are being transgressed But humans have been progressively altering along several dimensions (box 2.1).1 ecosystems, sometimes in radical ways, to meet G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 5 Many essential ecosystems are increasingly in BOX 2.1. “A SAFE OPERATING SPACE FOR HUMANITY” jeopardy, putting social and development aspirations LD POPs MFAs Modern Earth system science (including geology, at risk at both local and global scales. Environmental % 4% 2% climate science, hydrology, and ecology) makes pressures are increasing across all the GEF’s areas clear that human activity is now dangerously of focus, including accelerating biodiversity loss, impinging on some of Earth’s vital life support climate change, deforestation, degradation of systems through its impact on the global climate, international water bodies, land degradation, and MFAs 19% the water cycle, the nitrogen cycle, biodiversity, chemical pollution. ocean acidification, and pollution. A group of scientists has proposed the existence of certain ■■ Biodiversity is being lost at rates comparable to the thresholds, or planetary boundaries, beyond which POPs 2% the security of people in most countries is likely to mass extinctions of past geological periods. Earth face severe risks, including potential setbacks for is facing what has been characterized LD 4%as the human development. According to this frame- sixth mass extinction of species, the most recent work, the boundaries for biodiversity loss, climate among other waves of extinction registered in the change, and nitrogen release have already been fossil record during the past 500 million years. transgressed. Even the most conservative estimates indicate MFAs 18% that human-caused extinctions are proceeding at Climate change rates one or two orders of magnitude higher that on ) uti Oc a ic qu oll fied l p anti ean ac id those observed in the geological record. Almost t ifi a quarter of all plant species are now threatened ot m ye e Ch ca tion (n with extinction, and the global populations of ) ified ozo vertebrate species declined by nearly a third on (not yet quant g Stra epletion aerosol load ic in r Atmosphe ne d tospheric average between 1970 and 2003. 2 Biodiversity declined by 30 percent globally between 1970 and 2007 and by 60 percent in tropical regions, loss flow eoch (bio N cycl en i t as measured by the Living Planet Index3 (figure r ity g bou em ycle oru o e g rs nd ica ive 2.1). The International Union for Conservation ar l od y) Bi Ph c ph os us e n la nd i fre shw at s of Nature (IUCN) Red List Index of Endangered Change Glo er use Species also shows negative trends across birds, bal Caribbean corals. The mammals, amphibians, and especially precipitous decline in biodiversity38%undermines the integrity of ecosystems and the vital goods and Source: Stockholm Resilience Centre. services that they provide to people. 6 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y FIGURE 2.1. GLOBAL BIODIVERSITY TRENDS FIGURE 2.2. ATMOSPHERIC CONCENTRATIONS OF CO2 1.1 420 400 CO2, parts per million 1.0 Living Planet Index 380 0.9 360 0.8 340 0.7 320 0.6 300 1970 1975 1980 1985 1990 1995 2000 2005 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: World Wildlife Fund, Living Planet Report 2012 (Gland, Source: Mauna Loa Observatory data. Switzerland: WWF International, 2012). Note: Data are derived from in situ air measurements at the Mauna Loa Note: The Living Planet Index reflects changes in the health of the Observatory, Hawaii (elevation 3,397 meters). Measurements at Mauna planet’s ecosystems by tracking population trends of more than 2,500 Loa form the world’s longest continuous, high-precision record of CO2 vertebrate species. levels in the atmosphere. ■■ Climate change is no longer a future threat; it is example, the effects of climate change on crop already a reality.4 Atmospheric greenhouse gas and food production are evident, especially in (GHG) concentrations continue to grow, and the most vulnerable regions of the world; coastal with that the risks of devastating impacts from systems and low-lying areas are increasingly climate change. In 2010, about 49 gigatons experiencing submergence, coastal flooding, (Gt) of carbon dioxide (CO2) were released into and coastal erosion resulting from relative sea the atmosphere, mostly from the burning of level rise and storm surges; and acidification and fossil fuels, almost double the amount released warming of coastal waters are increasing, with in 1970. 5 And growth in emissions has been negative consequences for coastal ecosystems. accelerating since 1970. In 2013, the atmospheric Many projections suggest that in just 50 years, concentrations of CO2 reached a record high average temperatures on Earth will be higher than 400 parts per million (ppm) at the Mauna Loa at any time in the history of the human species on observatory in Hawaii (figure 2.2). The effects the planet. Without additional efforts to reduce of climate change are already being felt. For GHG emissions, emissions growth is expected to G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 7 continue, driven by growth in global population exploitation.11 Acidification of oceans is threatening and economic activities. The growth in emissions key marine ecosystems, including coral reefs, is projected to result in a rise in global mean which harbor a very high diversity of marine surface temperature from 3.7°C to 4.8°C in 2100, species and are also critical for the livelihoods of compared with preindustrial levels.6 Among other millions of people. Increasing phosphorous and reasons for concern, warming will result in longer nitrogen pollution from agriculture, aquaculture, and more intense heat waves, more frequent urban wastewater, and industry threatens damaging storms, severe droughts, and major freshwater and marine ecosystems. Pollution load flooding across many regions, especially coastal produces hypoxia (low oxygen conditions) or cities. Sea level rise is already adversely affecting “dead zones” along the coast, adding to pressures people and ecosystems. on marine ecosystems. The number of dead zones has been doubling every decade in the past 50 ■■ Deforestation continues. Forests provide multiple years, and today more than 500 hypoxic zones benefits. These benefits include functioning as threaten the health of the majority of the world’s carbon sinks, providing food and fiber, acting as the large marine ecosystems.12 largest repository of biodiversity globally, regulating water supplies, and stabilizing local and regional ■■ About one quarter of the world’s land area has climate. But rates of global deforestation remain been degraded since 1980.13 The Global Analysis of high, particularly in the tropics. Between 2000 Land Degradation and Improvements14 estimated and 2010, a total of 50,000 square kilometers that 24 percent of the global land area was (km2) of forest was lost (on a net basis). Thirty undergoing degradation. In the developing world, percent of global forest cover has been cleared, land degradation is concentrated in Africa south and 20 percent has been degraded.7 Carbon of the Equator, Southeast Asia, southern China, dioxide emissions from deforestation and forest and the Papas grasslands in South America. degradation now amount to approximately 12 Approximately 1.5 billion people directly depend percent of total human-caused emissions.8,9,10 on ecosystem services provided by areas that are undergoing degradation, with the impacts ■■ The health of oceans and freshwater resources is disproportionally affecting the poor and being compromised. Global fisheries are collapsing vulnerable, including women. at an alarming rate. Around 85 percent of global fish stocks are depleted, overexploited, fully ■■ Chemical pollution continues to threaten our exploited, or in a period of recovery following ecosystems and human health. Human health overexploitation. Fisheries management efforts and the health of ecosystems are threatened by are not keeping pace with accelerating rates of increasing chemical pollution, particularly from 8 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y persistent organic pollutants and heavy metals the global middle class—those with a daily such as mercury. consumption between US$10 and US$100—is expected to grow to nearly 5 billion people by Pressures on the global environment are set to 2030, with two-thirds of those people living increase in the coming decades. Three global in Asia.18 This change will drive an increase in socioeconomic trends in particular—population global consumption that could accelerate global growth, the rising middle class, and urbanization— environmental degradation, unless consumption will lead to further major degradation of global is shifted toward more sustainably produced ecosystems under a business-as-usual scenario: goods and services. Combined with a growing population, the burgeoning middle class is a major ■■ The world’s population will continue to grow. From factor in a projected increase in demand for a less than 4 billion in 1970 to just over 7 billion in number of key resources (figure 2.3), including a 2012, the global population is projected to exceed one-third increase in global demand for food and 9 billion by 2050, with almost half of that growth energy and large increases in demand for buildings in Sub-Saharan Africa.15 Feeding a growing global and transport by 2030.19,20 population will likely lead to increased conversion of natural landscapes to agricultural use. The ■■ Urbanization will continue. In parallel with population Millennium Ecosystem Assessment projected growth and the expanding middle class, the world’s that, globally, the land area devoted to agricultural population will become increasingly urbanized. In production might increase 1,020 percent by 2020 1970, about 1.3 billion people, or 36 percent of the compared with 2000.16 Conversion of land to world’s population, lived in urban areas. By 2009, agriculture will also increase the use of chemicals just over 50 percent of people were urbanites. for pest control, thereby increasing pressures And by 2025, more than a billion additional people on the environment. Climate change will further are expected to live in cities, most of them in exacerbate stresses in many places, with water Asia. Urban areas already account for the vast resources being overexploited and degraded, and share of the world’s gross domestic product and crop and land productivity will suffer from heat more than 70 percent of GHG emissions.21 Many and drought stress.17 climate change risks are now concentrated in urban areas, ranging from heat stress, extreme ■■ The world economy and the global middle class precipitation, flooding, landslides, and air pollution, will expand significantly. The world economy is to water scarcity and droughts. These risks projected to almost double in size in the next are also amplified for areas without essential two decades, from about US$50 trillion in 2010 infrastructure and services and for those living to US$95 trillion in 2030. At the same time, in exposed areas.22 But depending on how urban G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 9 expansion occurs, the environmental footprint of one of the potential outcomes is that of “[u]rban urban areas will vary significantly as a function localities actually offer[ing] better chances for of the area’s size, wealth, and geography and the long-term sustainability, starting with the fact that capacity and foresight of local authorities. Thus, they concentrate half the Earth’s population on less BD CC IW LD POPs MFAs 28% 29% 18% 4% 2% FIGURE 2.3. BUSINESS-AS-USUAL GROWTH IN GLOBAL RESOURCE DEMAND, 2010–2030 Real GDP Primary energy Food 1 Water US$ trillion 2005 Quadrillion BTU trillion kCal req’d cubic kilometers 1980 22 287 3,983 3,200 1990 30 349 5,004 3,600 2000 39 398 5,981 4,000 2010 50 492 6,998 4,500 2020 69 568 8,030 5,500 2030 95 654 9,062 6,350 +90% +33% +30% +41% Source: Global Insight; International Energy Agency; United Nations Environment Programme (UNEP); McKinsey analysis in McKinsey and Company, “Resource Revolution,” 2011; Food and Agriculture Organization of the United Nations (FAO), Food Balance Sheets, 2012; United Nations Department of Economic and Social Affairs (UNDESA), World Population Prospects: The 2012 Revision (New York: UNDESA, 2012); World Resources Institute, Creating a Sustainable Food Future (Washington, DC: 2013). 10 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y than 3 per cent of its land area.”23 When it comes to as green bonds. And traditional players, such as the urbanization, trend is not yet destiny. There is still World Bank and regional development banks, have an opportunity to design smarter cities with an eye intensified their focus on environmental sustainability. toward long-term sustainability. In some emerging economies, national development banks and state-owned policy banks are emerging as major players in environmentally relevant finance. In The Changing Landscape for 2012, the public sector accounted for approximately Environment Finance 38 percent, or US$135 billion, of global climate finance, with the vast majority (69 percent) of this The financial landscape, especially for climate financing, amount committed through development finance is changing rapidly. In 2012, global climate finance flows institutions and another 28 percent (US$38 billion) reached approximately US$359 billion, according to contributed by multilateral development banks. The The Global Landscape of Climate Finance 2013.24 About private sector accounted for 62 percent of all climate three-fourths of all climate finance is spent within the finance in 2012, or about US$224 billion. About 28 country of origin, while only about 15 percent of all percent of private climate finance originated with climate finance flows to non–Organization for Economic private project developers (for example, energy utilities Co-operation and Development (OECD) countries from and independent power producers), and another 19 international sources. Global investments in renewable percent was contributed by corporate actors, including energy—the biggest use of climate finance—amounted manufacturers and corporate end users. The menu of to US$214 billion in 2013, some 14 percent lower than in climate finance instruments is also broad, including 2012, reflecting in part the effect of policy uncertainty policy incentives, risk management instruments, in many countries that leads to delays in investment grants, concessional debt, market rate debt, and equity decisions.25 and balance sheet financing. A variety of finance providers and instruments increasingly focus on sustainable investment. New The GEF’s Capabilities institutions with mandates somewhat similar to and Strengths the GEF’s, such as the Green Climate Fund and the Climate Investment Funds, have entered the arena, One of the core strengths of the GEF is its role as emphasizing the need for the GEF to proactively seek a financing mechanism for several multilateral complementarities and collaboration. Private investors, environmental conventions that span most global including pension funds and sovereign wealth funds, environmental issues. The GEF serves as a financing are also increasingly investing in public-private mechanism for the Convention on Biological Diversity, partnerships that focus on green investments as well the United Nations Framework Convention on Climate G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 11 Change (UNFCCC), the Stockholm Convention activities: the Least Developed Countries Fund and on Persistent Organic Pollutants, and the United the Strategic Climate Change Fund. 26 The GEF has Nations Convention to Combat Desertification, and also played a key role in helping harmonize work on operates consistent with the guidance provided by the the chemicals and waste conventions. Conference of Parties (COP) to the conventions. In October 2013, the international community adopted A chief strength is the GEF’s strong, diverse, and the Minamata Convention on Mercury, a global expanding network of implementing partners. Initially, legally binding instrument, and agreed on the GEF’s the GEF was designed as a partnership between the role as a financial mechanism for the new convention. United Nations Development Programme (UNDP), The GEF also provides resources under the Montreal the United Nations Environment Programme (UNEP), Protocol for economies in transition that are dealing and the World Bank Group (WBG), which acted with ozone-depleting substances. Since its inception, as implementing partners in accordance with each the GEF has implemented its International Waters institution’s comparative advantage. In the early program, which aims to improve the management of 2000s, seven new agencies were added to the GEF transboundary freshwater resources and large marine partnership, 27 which significantly broadened the GEF’s ecosystems. It also has provided funding to projects technical expertise and implementation capacity and that generate multiple environmental benefits and provided recipient countries with a broader array of that are consistent with the objectives of the United choices when they implemented GEF-funded projects. Nations Forum on Forests (UNFF). Since 2012, the GEF has undertaken a process to accredit additional project agencies. 28 The GEF is versatile and adapts to changing challenges. A number of new programmatic areas GEF programming is bolstered by a well-established have been added to the GEF over time. For example, institutional setup. The GEF’s governance structure sustainable forest management that benefits the is inclusive, equitable, and transparent. When it was agenda of the United Nations Forum on Forests was established in the early 1990s, the GEF’s governance added in 2007. In 2010, with support from several structure set a new standard, because the GEF contributors, the GEF established the Nagoya Protocol Council has an equal number of seats for developing Implementation Fund (NPIF) to specifically support and developed countries. 29 Progressively, many of the access and benefit-sharing objective under the the GEF recipient countries are also becoming donors Convention on Biological Diversity. In parallel, as the to the facility, thus enhancing the overall ownership case for considering adaptation and resilience grew of the GEF’s priorities and programs. All project stronger, at the request of the parties to the UNFCCC, documents that face decision by the Council are being two new funds were established under GEF purview, made publicly available on the GEF website, along with a focus on funding climate change adaptation with other information. Accountability is enhanced 12 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y by the Independent Evaluation Office (IEO), which GEF financing plays a catalytic role (figure 2.4). reports directly to the Council and provides ongoing During GEF-2 and GEF-3, the average cofinancing monitoring and evaluation of project outcomes. In ratio of GEF projects was about 1:4. It increased to addition, the GEF is advised by the standing Scientific about 1:6 in GEF-4 and GEF-5, driven in part by a and Technical Advisory Panel (STAP), which consists significant increase in the leveraging of the GEF’s of world-class scientists and covers all GEF focal climate change portfolio in middle-income countries. areas. The GEF applies best-practice fiduciary In line with the GEF-6 policy recommendations, the standards and has established high standards GEF will continue to aspire to achieve high cofinancing for environmental and social safeguards, gender ratios, especially in middle-income countries. mainstreaming, and engagement with civil society organizations and indigenous peoples. FIGURE 2.4. GEF CO-FINANCING RATIO 8.0 The GEF has a record of delivering good results on Average co-financing ratio 7.0 the ground. Since its inception, the GEF has provided a total of about US$11.5 billion in grant resources 6.0 to developing countries for the benefit of the global 5.0 environment. A total of 2,800 projects have been 4.0 approved. 30 Reports by the IEO repeatedly show that 3.0 GEF projects deliver benefits on the ground. Most 2.0 recently, the Overall Performance Study for GEF-5 (OPS-5) concluded that GEF projects are effective 1.0 in producing outcomes: more than 80 percent 0.0 of completed projects during GEF-5 received an GEF-1 GEF-2 GEF-3 GEF-4 GEF-5 Average Median outcome rating of at least moderately satisfactory, exceeding the international benchmark of 75 percent. Source: GEF Project Management Information System and staff Consequently, OPS-5 concluded that the GEF is calculations. Note: All GEF trust fund projects, except enabling activities. achieving its mandate and objectives and is relevant to the conventions and to regional and national priorities. Recent assessments conducted by key bilateral agencies also showed that the GEF delivers value for money invested. 31 G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 13 14 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y CHAPTER 2 Positioning the GEF for 2020 and Beyond The coming years are critical for the global environmental benefits across multiple domains. environment. For example, avoiding the worst impacts The GEF helps to ensure the sustainable use of climate change will require reducing emissions of of ecosystems and resources on which all life GHGs substantially and rapidly. Estimates suggest depends. The GEF Instrument reflects the premise that to stabilize atmospheric concentrations of CO2 that the environment is essential for sustainable at 450 ppm by 2050, global emissions will have to development. 34 peak within the next five years and decline by about 5 percent annually until 2050—a rate of decline that The 2020 vision for the GEF is to be a champion of has never been observed on a sustained basis.32 the global environment building on its role as financial Adaptation and mitigation choices in the near term, as mechanism of several multilateral environmental well as developmental pathways for the longer term, conventions (MEAs), supporting transformational will affect the risks of climate change through the 21st change, and achieving global environmental benefits century.33 With regard to biodiversity, the Conference on a larger scale. To achieve this vision, the GEF will of the Parties to the Convention on Biodiversity has do the following: established a set of ambitious targets to be reached by 2020 to halt biodiversity loss. Moreover, the ■■ Address the drivers of environmental degradation. international community is currently discussing the The GEF will proactively seek interventions establishment of a set of sustainable development that focus on the underlying drivers of global goals for 2030, the achievement of which will be environmental degradation and support coalitions more challenging unless urgent action is taken. It is that bring together partnerships of committed critical that the GEF continues to position itself as a stakeholders around solutions to complex relevant and valuable actor in the broader sustainable environmental challenges. development framework, while at the same time retaining its particular niche on the environment. ■■ Support innovative and scalable activities. The GEF The GEF occupies a unique space in the global will support innovative ways of doing business that financing architecture by delivering global are complementary to other institutions’ activities G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 15 and focus on activities that are scalable across multiple countries, regions, and sectors through policy, market, or behavioral transformations. ■■ Deliver the highest impacts, cost-effectively. The GEF will keep a clear focus on maximizing the global environmental benefits it generates from its funding by pursuing cost-effective solutions to major environmental challenges through its partner agencies. To fulfill its vision, the GEF must achieve impacts on a greater scale than is being realized within its existing portfolio. OPS-5 concluded that only 20 percent of GEF-funded projects showed evidence of achieving benefits at a system-wide scale beyond the direct results of an intervention, although the IEO notes that larger-scale effects may still happen in the future. 35 Similarly, STAP underscored that the GEF would be able to achieve transformational outcomes only “by breaking away from single technology and/or single sector approaches towards a focus on systemic approaches.”36 STAP noted the importance of the GEF’s projects seeking broader outcomes, beyond single programs; better addressing the key drivers of environmental degradation and not just the pressure points; and developing a comprehensive approach toward scaling up the impact of its investments. 37 16 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y CHAPTER 3 Key Strategic Priorities To deliver on the 2020 vision, the GEF will pursue five strategic priorities: (a) address the drivers of environmental degradation; (b) deliver integrated solutions; (c) enhance resilience and adaptation; (d) ensure complementarity and synergies, especially in climate finance; and (e) focus on choosing the right influencing model. Addressing Drivers of Environmental Degradation The GEF can enhance environmental benefits by addressing the drivers of environmental degradation. Environmental drivers arise from the demand for and supply of goods and services, which in turn generate environmental pressures that directly affect the state of the environment (figure 4.1). The framework is useful to illustrate that efforts to prevent biodiversity loss, for instance, can happen at multiple points in the causal chain. For example, rising demand for beef may result in added pressure to clear land for pastures, leading to further deforestation, soil degradation, and biodiversity loss. Focusing more on upstream drivers in this same problem would enable the GEF to deliver G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 17 cascading global environmental benefits down the environmental degradation at a systemic level, the causal chain, thereby progressively reducing the need for subsequent remedial action—which often is impacts of the original driver and increasing the much more expensive, if not impossible—would also overall benefits of interventions. By addressing be reduced. FIGURE 4.1. THE CAUSAL CHAIN OF ENVIRONMENTAL DEGRADATION The causal chain of environmental change Underlying Indirect Direct socioeconomic environmental environmental Environmental Changes in state trends drivers drivers pressures of environment Demand for food Agriculture Pollution e.g., GHG’s Atmosphere production production processes & ozone-depleting (climate) Population that produce food substances growth Demand for Provision/use of Biodiversity buildings Change in habitat transportation and species loss Rising middle Demand for Construction & use Land class energy Introduction of of buildings & other invasive species infrastructure Demand for transportation Production of Over exploitation Oceans electricity and harvesting Urbanization Other Other Other Freshwater Driver interventions Pressure interventions Changes in human welfare Source: The above framework is adapted from the Food and Agriculture Organization of the United Nations/UNEP frameworks—drivers, pressures, state, impact, and response (DPSIR) and drivers, pressures, state, welfare, and response (DPSWR) —and the World Resources Institute, Millennium Ecosystem Assessment, Ecosystems and Human Well-Being Biodiversity Synthesis (Washington, DC: World Resources Institute, 2005). Note: No universally accepted framework exists for defining the causal chain between the underlying socioeconomic trends and the global environmental state. 18 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y Addressing drivers will help the environmental Altering demand toward more sustainably produced conventions to better achieve their goals with goods and services is an important avenue to support from the GEF as their financial mechanism. reducing environmental degradation. The GEF has Conventions and recipient countries recognize a range of tools at its disposal. These tools include that a focus on underlying drivers is critical for certification standards for consumer goods, such their long-term success. For example, the Strategic as those the GEF supported through the Rainforest Plan for Biodiversity 2011–2020 and the Aichi Alliance and private sector partners. They also Biodiversity Targets (collectively, the Aichi Targets), include the introduction of a system of payment for in reflecting on the status of the previous 2010 ecosystem services (PES), which corrects distortions targets, emphasize that “there has been insufficient that lead to unsustainable resource use and depletion integration of biodiversity issues into broader policies, of natural capital, and incentives that reinforce the strategies, programmes and actions, and therefore value of ecosystem goods and services. The GEF has the underlying drivers of biodiversity loss have not been a pioneer and has committed significant seed been significantly reduced.” The strategic plan also funding to these schemes in several countries (box noted that among the multiple entry points that 4.1). Moreover, innovative financing models, such as need to be pursued to achieve a positive outcome partial risk guarantees, can help stimulate demand for by 2020 is “action to address the underlying causes more energy-efficient equipment in both households of biodiversity loss, including production and and industries and can facilitate more sustainable consumption patterns, by ensuring that biodiversity production and consumption of goods and services. concerns are mainstreamed throughout government and society.”38 Similarly, reducing GHG emissions A key priority for the GEF will be to help change the sufficiently to achieve “stabilization of greenhouse production of goods and services in a manner that gas concentrations in the atmosphere at a level reduces or eliminates impacts on the environment. that would prevent dangerous anthropogenic The GEF has promoted a range of experiences in interference with the climate system”39 will not be the supply of environmentally sustainable goods possible without influencing the underlying drivers and services, including introducing standards for that stem from the growing demand for energy electricity consumption in households and industry and without reducing fossil fuel–based energy appliances, as in the GEF’s en.Lighten Project; production in favor of renewable energy. Likewise, in improving agricultural practices to preserve soil the chemicals and waste area, to ultimately reduce health and thereby improve food security, as in the the production and use of harmful chemicals would GEF-supported project in Senegal’s Groundnut basin; require a focus on supply chain management and eliminating the use of persistent organic pollutants production techniques. in economic processes, such as the use of DDT in the production of the pesticide Dicofol in China; and G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 19 helping to reduce the threat of invasive species in The GEF must also remain ready to tackle marine ecosystems through strengthened regulation immediate environmental pressures and crises. of shipping ballast water (the GloBallast program; The Strategic Plan for Biodiversity states: “While see box 4.2). The GEF also will continue to explore longer term actions to reduce the underlying causes options for working across entire supply chains and of biodiversity are taking effect, immediate action focusing on industrywide approaches. can help conserve biodiversity, including in critical BOX 4.1. GEF INVESTMENTS IN PAYMENT FOR ECOSYSTEM SERVICES Payment for ecosystem services (PES)—as the name natural forests, reforestation through sustainable implies—involves compensating the provider of plantations, and agroforestry, and it is funded ecosystem services for continuing that provision, through a mix of domestic resources (a fuel tax and a thereby creating an incentive for sustainable manage- forestry tax) and multilateral and bilateral support. In ment of the services. The GEF has been among the Mexico, the scheme benefits local communities. The pioneers in supporting PES in a number of countries GEF program provides support for the development and locations, as in the following examples: of sustainable financing mechanisms for biodiversity and through water fees creates a direct link between ●● Capacity building for mainstreaming of PES. For those who benefit from the environmental service example, the GEF’s global Project for Ecosystem and those who provide it. Services has pilots in Chile, Lesotho, South Africa, Trinidad and Tobago, and Vietnam. The project ●● Water funds—a growing frontier. Water quality and seeks to integrate the sustainable use of biological quantity are emerging as a central service provided resources and ecosystem services into national by ecosystems. The GEF’s Earth Fund helped decision-making and development approaches. The establish five water funds in Latin America and the project is developing an enhanced use of PES in Caribbean to pay for the conservation of water- policy making. sheds that provide water and support globally important biodiversity. Similarly, in the Fynbos and ●● National-level implementation of PES. The GEF grasslands of South Africa, the GEF has supported supported two of the world’s most prominent agreements between buyers and sellers of impor- national PES schemes, the Environmental Services tant ecosystem services, including water, fiber, and Payment Program in Costa Rica and the Hydrological medicines. Environmental Services Program in Mexico. The scheme in Costa Rica compensates landowners for activities that have been identified as contributing to Source: GEF, Payment for Ecosystem Services a sustainable environment, including conservation of (Washington, DC: GEF, 2010). 20 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y ecosystems, by means of protected areas, habitat Delivering Integrated Solutions restoration, species recovery programs, and other targeted conservation interventions.” To those ends, well-managed protected area systems are critical Many global environmental challenges are interlinked elements in achieving many of the Aichi Targets. and share common drivers. Biodiversity loss, climate In addition, protected areas support the flow of change, ecosystem degradation, and pollution often ecosystem services and are tools for climate change share common drivers and may demand coordinated adaptation. The GEF also urgently needs to address responses. For example, unsustainable agricultural immediate environmental threats in other focal areas, production contributes approximately one-quarter including, for example, by reducing inadequately of global GHG emissions. But it is also a leading stored stockpiles of persistent organic pollutants. cause of hypoxia in aquatic systems, and it can lead to deforestation and habitat destruction, thus promoting further loss of biodiversity. By targeting key drivers, the GEF can magnify the effects of its investments, making them add up to more than BOX 4.2. GLOBALLAST: CLOSING A PATHWAY FOR BIODIVERSITY LOSS IN GLOBAL SUPPLY CHAINS Since the introduction of steel-hulled vessels around 120 countries. Those interventions have been helping to years ago, water has been used as ballast to stabilize address ballast water invasive threats through the vessels at sea. Although ballast water is essential for safe reform of national ballast water management policies, and efficient modern shipping operations, it can pose legislation, and institutions, as well as through global serious threats to the health of the ocean because of the advocacy and awareness raising and ballast water risk invasive aquatic species and related diseases that are assessment and training. potentially carried in ballast waters. Thus, the International Convention for the Control and Management of Ships In addition, GloBallast is helping to catalyze a major Ballast Water and Sediments was signed in 2004. transformation in the shipping industry. More than US$100 million has been committed by the private To address the threats, the GEF has partnered with the sector for research and development in ballast water International Maritime Organization (IMO) to help treatment and for testing facilities. Once the IMO Ballast establish the Global Ballast Water Management Water Management Convention comes into effect, the Programme, or GloBallast. Through two interventions global market for ballast water treatment for 57,000 with the GEF’s International Waters focal area, GloBal- vessels is estimated to grow to US$35 billion over the last built the capacity of more than 50 developing next 10 years. G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 21 the sum of their parts. Interdependence between environmental challenges is an additional reason for considering integrated approaches. For example, ecosystem degradation may happen faster as a result BOX 4.3. THE GEF-6 INTEGRATED of vulnerabilities created by climate change. Research APPROACH PILOT PROGRAMS suggests that combined effects markedly increase the probability that critical thresholds of irreversible The GEF-6 programming strategy includes three pilots in the Integrated Approach Pilots (IAP) change will be crossed faster than predicted for each program. First, the Fostering Sustainability and factor separately.40 Resilience for Food Security in Sub-Saharan Africa IAP recognizes that jointly tackling energy, water, soils, In GEF-6, a program of integrated approach pilots and food is essential for sustainable development (IAPs) will be implemented. These IAPs will support and, therefore, will build on the nexus between these activities that can help countries and the global themes to promote greater impact and efficiency in community meet commitments to more than one the overall investments. Second, the Sustainable global convention by tackling underlying drivers Cities IAP offers a direct pathway to securing higher returns for the investment, given that cities are now of environmental degradation to create synergies responsible for over 70 percent of carbon dioxide leading to greater, sustained impacts (box 4.3). emissions globally. Finally, the IAP on Taking Defores- The programs will also complement national-level tation out of Commodity Supply Chains will work with programming with transboundary, regional, and the private sector (producers), consumers, and other global action. Furthermore, the IAPs will use the stakeholders to tackle some of the principal drivers of GEF’s wider partnership to bring stakeholders forest loss in developing countries. together on a selected set of priority issues. The IAPs will give special attention to engaging the Common among these three pilots is that they address global environmental issues more holistically, private sector and improving evidence-based design within a much broader and more complex set of and implementation to enhance learning and the development challenges. It is critical to establish or effectiveness of the IAP interventions. strengthen platforms on which a broad set of stakeholders can come together. GEF contributions The GEF will build on its past experiences. The GEF to these challenges would seek to ensure that key will use the lessons learned from its operational global environmental issues were adequately experiences with integrated approaches: (a) the considered in this broader context and to identify the implementation of larger programs, such as the Areas most effective and innovative ways to use funds to reach a greater impact and scale. Beyond National Jurisdiction (ABNJ), the Great Green Wall program, and the Ridge to Reef program; (b) Source: GEF-6 Programming Directions. the combining of funding from country allocations 22 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y with incentive mechanisms, in particular through FIGURE 4.2. SHARE OF GEF FUNDING PROGRAMMED AS the GEF Sustainable Forest Management and MULTI–FOCAL AREA PROJECTS Reducing Emissions from Deforestation and Forest Degradation (REDD+) program; and (c) the growing 50% portfolio of multi–focal area projects and programs, which is a particularly visible trend. In GEF-5, about 40% 44 percent of GEF funding was programmed as multi–focal area projects (figure 4.2).41 Although 30% more analytical work is needed to fully understand and document the impacts of these projects, a 20% detailed review done as part of OPS-5 shows that, on average, multi–focal area projects achieve the same 10% high level of satisfactory outcome ratings as single– focal area projects.42 0% GEF-1 GEF-2 GEF-3 GEF-4 GEF-5 Enhancing Resilience and Adaptation Source: GEF Project Management Information System and staff calculations. Note: Shows only the main GEF trust fund. The case for urgent action on adaptation is unequivocal. The IPCC’s Fifth Assessment Report (AR5) presents a broad set of climate-related risks that vary across regions and sectors. Those risks The GEF will remain at the forefront of international include, for example, reduced crop productivity in efforts to strengthen countries’ resilience to climate Africa caused by heat and drought stress; increased change. Principally through the Least Developed riverine, coastal, and urban flooding from storm Countries Fund and the Strategic Climate Change surges and sea level rise in Asia; and reduced Fund, the GEF’s Adaptation Program has already availability of fresh water in semi-arid and glacier supported a pioneering global portfolio of adaptation melt–dependent regions in Central and South projects in 124 countries that are worth more than America. The 2013 Global Risk report from the World US$1.18 billion. The GEF will continue to focus its Economic Forum ranked a failure of climate change adaptation funding on reducing the vulnerability adaptation among the most severe global risks.43 of people, livelihoods, physical assets, and natural systems to the adverse effects of climate change; strengthening institutional and technical capacities G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 23 for effective climate change adaptation; and integrating climate change adaptation into relevant BOX 4.4. ECOSYSTEM-BASED ADAPTATION: DELIVERING policies, plans, and associated processes. Through MULTIPLE BENEFITS WHILE BUILDING RESILIENCE its support for national adaptation plans, the GEF Poor and vulnerable populations generally rely more will help countries incorporate adaptation measures directly on ecosystem services for food, fiber, and into their broader development efforts, identify their fuel. The objective of ecosystem-based adaptation (EbA) is to include biodiversity and ecosystem medium- to long-term adaptation needs on the basis services as part of an overall adaptation strategy to of enhanced scientific and technical knowledge, help poor and vulnerable people adapt to climate and strengthen coordination at the country level. change. EbA can help maintain and restore natural It will also help pave the way for investments at a assets such as wetlands and forests and contribute to larger scale, possibly with funding by the Green food security, coastal protection, and climate-resil- Climate Fund or other public or private actors, ient water resources management, while it also particularly in countries with limited technical and improves the resilience of fragile ecosystems and institutional capacity. biodiversity. Therefore, ecosystems represent an important entry Adaptation offers an avenue for seeking integration point for adaptation. At the national level, a and synergies with other efforts to improve the global significant number of GEF-supported National environment. The GEF aims to achieve as many Adaptation Programs of Action prioritize sustainable adaptation benefits and global environmental benefits management, conservation, and restoration of as possible. For example, adaptation measures ecosystems as means of achieving cost-effective and may generate global environmental co-benefits by poverty-focused adaptation. The GEF has also improving water-use efficiency in agriculture or by funded projects that use specific EbA approaches. For example, the Integrated National Adaptation promoting ecosystem-based adaptation (box 4.4), Project in Colombia focuses on high-mountain such as sustainable management of mangroves ecosystems and coastal areas, and uses community- in the face of sea-level rise and coastal erosion. based initiatives to restore watersheds, vegetation, Integration, if done well, would reduce transaction and landslide-affected areas. costs, increase cost-effectiveness in implementation, and capture economies of scale. The GEF will also seek to integrate climate resilience into its investments in other focal areas in a more concerted and more systematic manner, for example, through the use of climate change risk assessments and the incorporation of relevant risk mitigation measures into project and policy design. 24 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y Ensuring Complementarity achieve global environmental results. In that regard, the GEF can play a key role in demonstrating and Synergies in the Global innovative approaches and instruments that can Financing Architecture be scaled up by other players, including the Green Climate Fund as it becomes operational. The GEF needs to ensure maximum complementarity with other players and instruments. In particular, the landscape of climate finance is rapidly evolving, but Choosing the Right the funding needed to transform markets toward Influencing Models low-carbon development remains significant. In many cases, although each climate finance actor plays its The GEF achieves benefits through a number of unique role, if those roles are combined carefully, they influencing models. The GEF’s choice of influencing can complement each other, leverage private sector models needs to be matched to the barrier they investments, and produce much higher impacts intend to overcome, such as weak or inadequate than they would if they operated in isolation. For policy frameworks, lack of awareness, limited access the GEF, this effort would require a careful, adaptive to finance, technological gaps, or coordination approach to not only ensure that duplication of efforts failure. Because the GEF often faces multiple are avoided, but also systematically tries to achieve barriers, a variety of influencing models is needed, the greatest synergies with many development which sometimes must be carefully sequenced. For and financial institutions, including the GEF partner example, providing support for implementing new agencies. The experiences of the GEF demonstrate policies is unlikely to be successful if institutional how this complementarity has been materializing capacity is very weak. Choosing the right influencing among different climate finance actors. The GEF’s models increases the catalytic effects of GEF pursuit of complementarity in climate finance has in interventions. Consequently, the GEF will set as recent years manifested itself in a 13:1 cofinancing priorities interventions designed to generate global ratio of GEF climate change mitigation projects. In environmental benefits at scale, interventions to particular, the GEF’s climate portfolio has helped lay be delivered across multiple geographies, and the foundation for catalyzing substantial funding from interventions to be delivered across multiple sectors the private sector, national governments, and partner or markets. Scale can be achieved in several ways, agencies, which otherwise might not have occurred. including (a) directly from the intervention, as in Leveraging capital sources to make green investments the GEF’s work in the Coral Triangle (box 4.5) or will require that the GEF’s limited resources be used the GEF’s support for the Amazon Region Protected catalytically to provide other investors with the right Areas Project; (b) from market or behavioral signals and incentives to effectively and efficiently transformations; and (c) from GEF interventions G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 25 BOX 4.5. THE CORAL TRIANGLE INITIATIVE—BUILDING A MULTISTAKEHOLDER ALLIANCE TO ACHIEVE IMPACT AT SCALE The Coral Triangle, which lies between and links Indonesia, biodiversity in the triangle and on its productivity. In the the Philippines, Malaysia, Timor Leste, Papua New Guinea, long term, climate change—through rising sea tempera- and the Solomon Islands, is a vital global marine resource. It tures and sea levels plus growing ocean acidification—is covers 5.7 million square kilometers, an area equivalent to likely to further damage the delicate ecosystem. 1.6 percent of the world’s oceans, and is home to 76 percent of all coral species and 37 percent of all reef In response to the mounting threats, the GEF joined a species. It is also the spawning ground for six species of broad partnership led by the six Coral Triangle countries, turtles as well as endangered fish and cetaceans, such as which also includes international development partners, tuna and blue whales. An estimated 363 million people live nongovernmental organizations, local communities, and the within the Coral Triangle’s boundaries, and more than 120 private sector. This alliance aims to strengthen the gover- million people along the 125,270 kilometers of coastline— nance of the Coral Triangle; to implement a regional action an estimated 2.25 million of them being fishers—depend on plan focusing on sustainable management of the seascape the area for economic and food security. The region (including fishing); to establish a functioning, protected produces annual earnings of about US$3 billion from fish marine area; and to strengthen the Coral Triangle’s exports and a further US$3 billion from coastal tourism. resilience and adaptation to climate change. Source: Global Agenda Council on Governance for Sustainability, However, some 95 percent of reefs in the region are “Green Light: Managing the Global Commons; The Coral Triangle assessed as being at risk. Overfishing has been widespread, Initiative,” World Economic Forum, Geneva, April 2014. and pollution on land has had a deleterious effect on being scaled up by others. The GEF’s experience is operating at various levels—local, national, and that a focus on drivers and a focus on scale are often multinational—the signal or incentive to change mutually reinforcing.44 their consumption and production choices. This model can be more effectively targeted at Most GEF projects will rely on one or more scales that deliver greater benefits for the global influencing models: environment. Such signals and incentives need to be clear, predictable, and sustained to enable private ■■ Transforming policy and regulatory environments. This sector actors to make optimal decisions. With model helps governments put in place the policies, support from the GEF and others, for example, the regulations, and institutions that allow them to South African government put in place new policy redirect their own investment paths and spending and regulatory frameworks to govern renewable practices. It also gives individuals and companies energy markets, which helped South Africa become 26 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y the G20 country with the fastest-growing clean private sector, civil society, research groups, and energy market over the past five years. indigenous and local communities are vital in this regard. Coordination failures and complexities are ■■ Strengthening institutional capacity and decision- often exacerbated because decisions that affect making processes. Supporting strengthened the environment are often fragmented across institutions, improved information, broader multiple government agencies. stakeholder and civil society participation, and enhanced accountability in public and private ■■ Demonstrating innovative approaches. The GEF decisions can have significant positive impacts on has a long history of providing support for the the environment. The GEF has a long history of demonstration of a technology, a policy measure, supporting institution building. For example, one or an approach to address environmental of the GEF’s earliest projects45 helped establish degradation, with the aim of creating a “beacon what eventually became the Secretariat of effect” that can spur broader adoption. Among the Biodiversity and Forests within Brazil’s Ministry GEF’s many examples of support for innovation of Environment. Since then, the secretariat has are its early support for concentrating solar been instrumental in developing Brazil’s legal power production, the groundbreaking support framework for biodiversity and in formulating the for payment for ecosystem services (box 4.1), and National Biodiversity Strategy. Another example is more recently the GEF CleanTech program. The in India,46 where the GEF helped establish the Gulf ultimate success of such demonstration activities of Mannar Biosphere Reserve Trust (GOMBRT), often depends on a designing a clear strategy for which has now been made a statutory body of the up-scaling early in the project. government of Tamil Nadu. ■■ Deploying innovative financial instruments. Financial ■■ Convening multistakeholder alliances. Coordination instruments can help cover risks or investment failures abound in environmental management, gaps that investors, who generally focus on in part because of the prevalence of “tragedy of financial returns or private development benefits, the commons” issues. Moreover, the complexity would not have the incentive to cover. Such of environmental challenges requires that instruments can help leverage private sector actions be taken simultaneously by many investments. The GEF has significant experience different stakeholders to be effective; for example, in deploying non-grant instruments designed creating sustainable commodity supply chains to leverage substantial capital from the private depends on efforts from local producers, buyers, sector. For example, in the project on China Utility manufacturers, wholesalers, retailers, and, Energy Efficiency, the GEF has provided funds ultimately, consumers. Partnerships with the to lower the risk of large-volume International G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 27 Finance Corporation loan guarantees to help unlock energy-efficiency lending from commercial banks. A result has been the replication of an effective energy-efficiency lending model across the country. Another example is the GEF’s support for the Caribbean Regional Fund for Wastewater Management, which will create revolving funding mechanisms to provide sustainable financing for environmentally sound and cost-effective wastewater management across the region. The GEF will continue to strengthen its focus on non-grant instruments, including through a pilot in GEF-6 to support private sector engagement and create incentives for the public sector in GEF recipient countries to use non-grant instruments, including concessional loans. Through their potential for generating reflows, non-grant instruments could also make a contribution to the long-term financial sustainability of the GEF. The GEF will also explore the possibilities of using results-based financing. 28 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y CHAPTER 4 Core Operational Principles A number of core operational principles will underpin GEF2020. They represent key “nuts and bolts” of the GEF’s operational system that are important for the GEF’s ability to effectively deliver on its strategic priorities over the long term. Mobilizing Local and Global Stakeholders As with all other entities in the global environmental arena, the GEF cannot achieve transformational change by itself. A driver-focused approach to tackling environmental degradation naturally requires strong engagement with many partners with diverse skills. The GEF will forge close relationships with national and local governments. National and local governments have a central role and responsibility for their country’s environment through the negotiation of international environmental agreements, as well as through decisions on national targets, plans, policies, and regulations. The GEF’s government counterparts play a key role in mobilizing partners nationally and subnationally, such as peer agencies, as well as the country’s private G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 29 sector and civil society stakeholders operating in key The GEF will seek a stronger engagement with sectors. The GEF should also support more cross- civil society organizations (CSOs) in the global country partnerships, regionally and globally, as environment arena. Since its inception, the GEF has well as those based on ecosystem and geographic put in place a number of mechanisms and policies configurations. Those partnerships will be critical to facilitate the participation of civil society in its to enhancing the focus on drivers of environmental work. The GEF’s experience is that working with degradation that is part of GEF-funded projects and CSOs often enhances the impact and sustainability programs identified through the GEF’s priority-setting of its interventions. The GEF will further strengthen tools—National Portfolio Formulation Exercises, its work with CSOs in recipient countries and National Dialogue Initiatives, and specially tailored internationally, including with indigenous peoples and project design exercises. Through these processes, through the GEF CSO network,, in accordance with its the GEF can help build environmental considerations public involvement policy, to develop knowledge and into other key ministries’ decision-making processes; mobilize public action that is necessary for achieving for example, strengthened engagement with recipient an enhanced impact on key drivers of environmental countries’ ministries of finance is crucial in this regard. degradation. To enhance the GEF’s ability to create science-based solutions, the GEF will partner with The GEF’s engagement with the private sector will research institutions and other academic leaders and be further strengthened. For compelling reasons, seek to incorporate scientific findings, appropriate the private sector is a high priority in addressing technology and traditional knowledge into project global environmental challenges. The private sector design to ensure the greatest impact. dominates the socioeconomic sphere, and therefore limited public sector resources need to be used The GEF will continue to strengthen its focus on most effectively to redirect private sector activities gender mainstreaming and women’s empowerment. toward environmentally sustainable approaches. The importance of gender equality in environmental Private enterprises, which are the dominant source management policies and programs has been of economic activity, must be encouraged to pursue recognized in a wide range of forums. The GEF commercially viable activities that also generate recognizes that gender equality is an important goal global environmental benefits. An advantage of in the context of projects that the GEF finances, the GEF compared with other institutions lies in because it can help to advance both the GEF’s its ability to provide grant funding that can be objectives of attaining global environmental benefits targeted to provide much-needed enabling-policy and those related to gender equality, equity, and support and that can reduce the risk of investments, social inclusion. If GEF interventions act as agents thereby helping to alleviate systemic barriers to of change in addressing environmental challenges, private investment. benefits generally accrue to both women and men. 30 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y The GEF will emphasize the use of gender analysis as standardized minimum requirements across GEF part of socioeconomic assessments to ensure that agencies—which has become increasingly important intervention design is gender sensitive. Furthermore, as the GEF partnership has grown to ascertain that gender-sensitive indicators and sex-disaggregated data GEF objectives are being met—with the need to will be used in GEF projects to demonstrate concrete allow implementing agencies and countries to design results and progress related to gender equality. projects in a timely and cost-effective manner. Improving Operational Efficiencies Strengthening Results Management The GEF will intensify its efforts to improve the The GEF must further strengthen results management. efficiency of its operations. Even with a dedicated Ultimately, what matters for the GEF is the achievement focus on improving project cycle efficiencies during of global environmental benefits. That is the measure GEF-5, project processing times have not significantly of success for the conventions for which the GEF serves improved in recent years. Detailed analysis by the as a financial mechanism, for the donors that provide IEO suggests that the time between Council approval the funding, and for recipient countries. In addition, GEF of a project and its endorsement by the CEO is projects often generate social and economic co-benefits persistently long, with a significant share of projects which a strengthened results management system exceeding the current 18-months target. would be able to better measure. . Consequently, a results focus must be present throughout the GEF’s Improved efficiency will require efforts from all GEF operational cycle. Significant changes are needed in stakeholders, including countries, implementing the GEF’s results management systems to enable it agencies, and the GEF Secretariat. GEF project to improve its effectiveness and to target its scarce preparation is subject to parallel project cycles resources more strategically. because GEF projects in most implementing agencies are subject to both the agency’s regular Certain issues will receive special attention in the project cycle requirement and the specific strengthening of the GEF’s results framework: requirements applicable to GEF projects. Those requirements are derived from the GEF’s focus ■■ Measure what matters. Focusing on a select set of on funding global environmental benefits and core indicators that can be uniformly measured other GEF policy requirements regarding, for will result in a more streamlined and effective example, safeguards, monitoring and evaluation, results management system. Aggregating gender, and cofinancing. The GEF will seek project indicators at different levels—across countries, cycle improvements that balance the need for regions, programs, and institutional portfolios— G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 31 will also help. Choosing the right set of core to capitalize on the knowledge generated across its indicators will strengthen the ability to manage partner agencies and to foster interagency cross- for results. The GEF has established a high-level learning. Thus, the GEF will use knowledge as a lever corporate results framework for the GEF-6 period, to mobilize investments in those interventions that but additional improvements are needed. The have the highest potential to deliver significant global GEF’s project management information system environmental benefits. The GEF will also increase also needs improvement. To strengthen the results its support of a South-South knowledge exchange management system, the GEF will need to support of successful and potentially replicable experiences strong collaboration of country and implementing among GEF recipient countries. partners and carefully weigh the benefits against any additional costs in terms of the increased complexity of the results management system. ■■ Close the feedback loop. The feedback loop that links the lessons learned from the GEF’s past decisions—from both completed and ongoing projects—needs to be strengthened. Lessons learned from the implementation of the Integrated Approach Pilots will be particularly carefully monitored. Monitoring and learning from results will inform future strategy development and priority setting, project design, implementation, and evaluation, with the results again feeding back into the cycle. A focus on strategically generating knowledge will complement enhanced results management. The potential audience for GEF knowledge products extends well beyond the GEF partnership. Lessons learned through GEF-funded interventions can guide other investments by bilateral funds, major foundations, the private sector, and national financial institutions, as well as the work of civil society. Through STAP, the GEF also has a unique opportunity 32 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y LIST OF ACRONYMS CBD Convention on Biological Diversity CEO Chief Executive Officer CSO Civil Society Organization EbA Ecosystem-based Adaptation FAO Food and Agriculture Organization of the United Nations GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse Gas IAPs Integrated Approach Pilots IEO Independent Evaluation Office of the GEF IMO International Maritime Organization IPCC Intergovernmental Panel on Climate Change IPCC AR5 International Panel on Climate Change Fifth Assessment Report IUCN International Union for the Conservation of Nature LPI Living Planet Index NPIF Nagoya Protocol Implementation Fund OPS Overall Performance Study PES Payment for Ecosystem Services REDD Reducing Emissions from Deforestation and Forest Degradation STAP Scientific and Technical Advisory Panel of the GEF UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change WBG World Bank Group WRI World Resources Institute G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 33 ENDNOTES 7 See World Resources Institute, http://www.wri.org/resources/maps/ global-map-forest-landscape-resoratin-opportunities. 1 J. Rockström, W. Steffen, K. Noone, Å. Persson, F. S. Chapin, E. F. Lambin, T. M. Lenton, M. Scheffer, C. Folke, 8 Use of peat fuels is excluded. See G. R. van der Werf, D. H. J. Schellnhuber, B. Nykvist, C. A. de Wit, T. Hughes, S. C. Morton, R. S. Defries, J. G. J. Olivier, P. S. Kasibhatla, R. van der Leeuw, H.g Rodhe, S. Sörlin, P. K. Snyder, R. B. Jackson, G. J. Collatz, and J. T. Randerson, “CO2 Costanza, U. Svedin, M. Falkenmark, L. Karlberg, R. W. Emissions from Forest Loss,” Nature Geoscience 2 (2009): Corell, V. J. Fabry, J. Hansen, B. Walker, D. Liverman, K. 737–38. Richardson, P. Crutzen, and J. A. Foley, “A Safe Operating 9 G. P. Peters, G. Marland, C. Le Quéré, T. Boden, J. G. Space for Humanity,” Nature 461 (2009): 472–75. Canadell, and M. R. Raupach, “Rapid Growth in CO2 2 World Wide Fund for Nature, Living Planet Report 2006 Emissions after the 2008–2009 Global Financial Crisis,” (Gland, Switzerland: World Wide Fund for Nature, 2006). Nature Climate Change 2 (2012): 2–4. 3 Ibid. 10 P. Friedlingstein and I. C. Prentice, “Carbon-Climate Feedbacks: A Review of Model and Observation Based 4 See IPCC Assessment Report 5, 2014. The report from the Estimates,” Current Opinion in Environmental IPCC’s Working Group I notes, “Human influence has Sustainability 2 (2010): 251–57. been detected in warming of the atmosphere and the ocean, in changes in the global water cycle, in reductions 11 Food and Agriculture Organization of the United Nations in snow and ice, in global mean sea level rise, and in (FAO), The State of World Fisheries and Aquaculture 2012 changes in some climate extremes. This evidence for (Rome: FAO, 2012). human influence has grown since AR4. It is extremely 12 Scientific and Technical Advisory Panel (STAP), “Hypoxia likely that human influence has been the dominant cause and Nutrient Reduction in the Coastal Zone: Advice for of the observed warming since the mid-20th century.” Prevention, Remediation, and Research; A STAP Advisory IPCC, “Summary for Policymakers,” in Climate Change Document,” GEF, Washington, DC, September 2011. 2014: The Physical Science Basis; Contribution of Working 13 Secretariat of the Convention on Biological Diversity, Group I to the Fifth Assessment Report of the Global Biodiversity Outlook 3” (Montreal: CBD, 2010), 35; Intergovernmental Panel on Climate Change, edited by T. M. Selman and S. Greenhalgh, “Eutrophication: Sources F. Stocker, D. Qin, G.-K. Plattner, M. Tignor, S. K. Allen, J. and Drivers of Nutrient Pollution,” WRI Policy Note, World Boschung, A. Nauels, Y. Xia, V. Bex, and P. M. Midgley Resources Institute, Washington, DC, 2009. (New York: Cambridge University Press). 14 Z. G. Bai, D. L. Dent, L. Olsson, M. E. Schaepman “Global 5 Climate Change 2014: Mitigation of Climate Change; Assessment of Land Degradation and Improvement” Contribution of Working Group III to the Fifth Assessment GLADA Report 5, November 2008 Report of the Intergovernmental Panel on Climate Change, edited by O. Edenhofer, R. Pichs-Madruga, Y. 15 Calculations are from 2012 statistics from FAO’s FAOSTAT Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. database, available at http://faostat.fao.org/. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. 16 Land-use projections are highly sensitive to the projec- Savolainen, S. Schlömer, C. von Stechow, T. Zwickel, and J. tions for climate change, population growth, dietary C. Minx (New York: Cambridge University Press). changes (as average real incomes increase and as the 6 Ibid. global population ages), and, in particular, agricultural yield increase. For example, the Organisation for 34 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y Economic Co-operation and Development (OECD) 31 GW in 2012 to 39 GW in 2013, despite a 23 percent projected in its base scenario that the global agricultural decline in the dollar value (to US$104 million) of invest- area will peak in 2020 at about 54 million square kilome- ments in solar energy. ters and decline thereafter because yield improvements, 26 Moreover since 2008, the GEF has also been providing though they will be lower in the future, will nevertheless secretariat services to the Adaptation Fund, which was eventually reduce the demand for agricultural land. See established under the Kyoto Protocol. OECD, OECD Environmental Outlook to 2050: The Consequences of Inaction (Paris: OECD Publishing, 2012). 27 The institutions were the African Development Bank, Asian Development Bank, European Bank for Reconstruction and 17 IPCC Assessment Report 5, 2014. Development, Food and Agriculture Organization of the 18 H. Kharas, “The Emerging Middle Class in Developing United Nations, Inter-American Development Bank, Countries,” Working Paper 285, OECD Development International Fund for Agricultural Development, and the Centre, Paris, 2010, 28, http://www.oecd.org/ United Nations Industrial Development Organization. dataoecd/12/52/44457738.pdf. 28 Conservation International and the World Wildlife Fund 19 R. Dobbs, J. Oppenheim, F. Thompson, M. Brinkman, and USA were accredited in November 2013. Several other M. Zornes, Resource Revolution: Meeting the World’s agencies are currently in the process of accreditation Energy, Materials, Food, and Water Needs (McKinsey and under the pilot, which is set to expire by the end of 2014. Company, November 2011). 29 This count includes countries in transition—that is, 20 Tim Searchinger and others, “The Great Balancing Act,” countries emerging from the former Soviet Union. Installment 1 of “Creating a Sustainable Food Future,” Council decisions are made by consensus. In the event Working Paper, World Resources Institute, Washington, of a vote, which has not happened to date, a double DC, 2013. majority (one vote per country, weighted by donor contributions) applies. 21 M. Fragkias and K. C. Seto, “The Rise and Rise of Urban Expansion,” Global Change 78, March 2010, cited in STAP, 30 This figure excludes the approximately 16,000 micro- “Enhancing the GEF’s Contribution to Sustainable projects implemented under the GEF’s Small Grants Development,” GEF/R.6/Inf.03, GEF, Paris, 2013. Program since the program’s inception. 22 IPCC Assessment Report 5, 2014. 31 U.K. Department for International Development (DFID), Multilateral Aid Review (London: DFID, March 2011); 23 United Nations Population Fund (UNFPA), State of the Ausaid, Australian Multilateral Aid Assessment (Sydney: World Population 2007: Unleashing the Potential of Urban Commonwealth of Australia, March 2012). Growth (New York: UNFPA, 2007), 55. 32 “Scientific Consensus on Maintaining Humanity’s Life 24 Climate Policy Initiative, The Global Landscape of Climate Support Systems in the 21st Century: Information for Finance 2013 Policy Makers,” Consensus Statement from Global 25 Frankfurt School–UNEP Collaborating Centre for Climate Scientists, Stanford University, May 21, 2013. & Sustainable Energy Finance and Bloomberg New 33 IPCC Assessment Report 5, 2014. Energy Finance, Global Trends in Renewable Energy Investment 2014 (Frankfurt: FS-UNEP Centre, 2014). A 34 “The GEF shall . . . fund programs and projects which are sharp decline in the technology costs of many renewable country-driven and based on national priorities designed energy sources, in particular photovoltaic (PV), has to support sustainable development…” GEF Instrument caused the world’s installed PV capacity to increase from Article 4. G E F 2 0 2 0 S T R AT E G Y F O R T H E G E F 35 35 See the first report generated by the fifth overall 42 The review also found that although some projects were performance study of the GEF, GEF Evaluation Office, designed merely to bundle multi–focal area projects into “Cumulative Evidence on the Challenging Pathways to a single project for apparent transactional convenience, Impact,” GEF Evaluation Office, Washington, DC, 2013. those were a small minority. The vast majority—close to 90 percent—of all projects were explicitly designed to 36 STAP, “Enhancing the GEF’s Contribution to Sustainable achieve objectives across several environmental domains. Development. It should be noted, though, that bundling may also be a 37 Ibid. practical way to overcome the challenges of fragmenta- 38 Secretariat of the Convention on Biological Diversity, tion of GEF resources under its allocation system. “Strategic Plan for Biodiversity 2011–2020 and the Aichi 43 World Economic Forum, Global Risks 2013, 8th ed. Biodiversity Targets,” paras. 5 and 10. This priority is also (Geneva: World Economic Forum). reflected in the Aichi Target’s Strategic Goal A, “Address 44 An analysis of 98 randomly selected GEF-5 Protocol the underlying causes of biodiversity loss by mainstream- Implementation Funds found that of those projects that ing biodiversity across government and society.” A targeted drivers (46 percent of investments, by value), number of targets under Strategic Goal B (“Reduce the over two-thirds were designed to be at scale or scalable. direct pressures on biodiversity and promote sustainable In contrast, of the 54 percent of investments that targeted use”) support focusing on sustainable production in pressures, only 8 percent were designed to be at scale or agricultural production (including fisheries). scalable. As a result, half of approved investment in GEF-5 39 UNFCCC article 2. did not address drivers and was not designed to deliver 40 M. Scheffer, J. Bascompte, W. A. Brock, V. Brovkin, S. R. scalable global environmental benefits. Carpenter, V. Dakos, H. Held, E. H. van Nes, M. Rietkerk, 45 Brazil—National Biodiversity Project (GEF ID 58). and G. Sugihara, “Early-Warning Signals for Critical 46 Conservation and Sustainable Use of the Gulf of Mannar Transitions,” Nature 461 (2009): 53–59. Biosphere Reserve’s Coastal Biodiversity project 41 Data are through June 2013. GEF, “Multi Focal Area Projects (GEF ID 634). in GEF Portfolio,” OPS-5 Technical Document 9, GEF, Independent Evaluation Office, Washington, DC, 2013. 36 T H E G LO B A L E N V I R O N M E N T FAC I L I T Y Production Date: March 2015 Design: Patricia Hord.Graphik Design Printer: Professional Graphics Printing www.theGEF.org