7 Lessons and recommendations

It is recognized explicitly here that what happens next to the LDCF depends to a large extent on the outcome of the negotiations on financing between the parties under the UNFCCC. It is anticipated that important and far reaching decisions will be reached at the COP 15 in Copenhagen on the scale and modalities for adaptation funding. In addition, the LDCF future could be affected by the outcome of the fifth replenishment of the GEF – since one of the proposals is to replenish the LDCF together with the GEF Trust Fund.

This Evaluation (in common with other assessments reviewed here) has identified problems of LDCF performance that are related to design and function and have resulted in very few LDCs so far being able to reach the implementation of NAPA priority projects – one project is in operation in Bhutan and four other projects in Bangladesh, Burkina Faso, Cambodia and Samoa now have the pre-requisite GEF CEO endorsement or approval for implementation to go ahead.

In part, the difficulties have been due to dealing with a complex subject that is new to many stakeholders (including both the GEF Agencies as well as the LDCs), in countries with poorly defined climate adaptive capacity. In addition, the funding of the LDCF by contributory countries has neither been predictable (being on a voluntary basis) nor sufficient to address programmes for adaptation. These are grounds for a significant reform and then replenishment of the LDCF.

The NAPAs represent an investment of resources that have resulted in consultations and prioritized plans for adaptation, increased climate change adaptation awareness, and in some cases political will to address climate change effects on vulnerable people. Significant strength of opinion and explicit preferences of LDC stakeholders were revealed through this Evaluation that the LDCF should continue to function, but in ways that enable expeditious access to adaptation implementation finance and technical support.

7.1 Lessons learned

The following lessons are drawn on the role and functions of the LDCF based on the evidence gathered during the Evaluation. The lessons are relevant to how global funds for climate change adaptation are set up.

Scale

• The scale of financial resources and the reliability of replenishment are crucial factors in the establishment and management of a fund aimed at adaptation needs. Unfulfilled pledges can thwart the performance of a fund as can setting up a financial resource channelling programme that is of an inappropriate scale for the size of the task at hand.
   
• If resources are too limited for a fund to handle all countries at once in an efficient manner, ways should be sought how countries may be addressed gradually, e.g. through a stepwise approach with certain deadlines established for project submissions (a limited number of countries being sufficiently addressed rather than a large group not being sufficiently targeted).

Flexibility and responsiveness

• A fund that has urgent and immediate priorities as its major goal needs to be designed so that it can quickly generate a programme pipeline with projects ready and mature enough for financing. This requires that clear guidance on policy and project design go hand-in-hand from the very beginning, or at least, that more specific policy implementation guidelines are elaborated early. Policy implementation guidelines are needed in order for the countries and the project developers to be able to set individual projects into context. This requires clear templates and guidelines at the project design level. If this type of guidance is not provided at an early stage, there is a risk that the fund will become based on ad hoc individual projects rather than a strategic approach providing guidance on how to implement adaptation in practice.

Design

• Funds that need to be mobilized quickly require a clearly defined programme design including a clear overall management strategy focusing on performance and achievements within clear deadlines. Furthermore, sufficient staff resources need to be allocated. Otherwise, there is a risk that the development of the fund’s strategic priority setting, its planning process and project procedures will be hindered.
   
• A project preparation fund may have the potential of boosting possible co-financing and complement other types of adaptation funding as long as it is still provided within a clear overall agreed policy framework. Although in purely financial terms this may only meet a tiny proportion of the countries’ needs, it may play a key role in leveraging co-financing operations with other programs or funds. To do so the incentives need to be clear and well communicated to possible partners in order to create a high degree of commitment.

Capacity

• In countries with limited technical and human resource capacity, bottlenecks will occur in project preparation that will prevent the full benefits of adaptation considerations being integrated into national policies and programs. However, shortcutting this constraint by employing consultants to lead the work, without proper engagement with government staff and thereby capacity development, will often lead to a lack of national ownership of plans developed.
   
• Adaptation is still a young discipline and it is necessary for a fund to have a large degree of flexibility and to be able to deliver the financial and technical resources the different countries need. As countries are ready, direct finance resource access should be made available. Others need to receive support in project identification and programme preparation. A fund would need to be able to cover this diversity, so that progressive steps in countries with stronger capacity do not become missed opportunities.
   
• Outreach and communications capacity need to be specifically addressed. Procedural aspects need to be well communicated to implementing agencies and recipient countries. This should be provided at an early stage.

Lesson learning

• The ability to monitor and track achievements and results needs to focus not only at project level but also at the programme level. Fund management must be able to draw on strategic advice in terms of substantive matters but also project management issues. If such issues are not addressed, reporting and monitoring may tend to focus only on money pledged to the fund, where projects are in the project cycle and specific issues to be solved in project applications. Such issues should be addressed by a task force or established as a protocol across the fund and its implementing agencies.

7.2 Recommendations for the future of the LDCF

The recommendations are presented according to the stakeholder group they are targeted at.

Parties to the UNFCCC – the following recommendations require UNFCCC COP guidance or requests

1. Given that the context of the LDCF has changed since its creation, i.e. additional funds have been created – most importantly the Adaptation Fund under the Kyoto Protocol – as well as additional information about the severity of climate change coming out of IPCC and elsewhere that implies additional costs, UNFCCC should reassess the role of the LDCF. What is the niche of the LDCF given the likely scale of its funding and the emergence of new channels and some additional funds? Parties should consider what constitutes an appropriate lifespan of the LDCF – be that short to medium term, e.g. up to 2012 and the replacement of the Kyoto Protocol, or longer term.
    
2. In addition, parties should consider if the present institutional arrangements for LDCF management are fit for purpose in the post-Copenhagen era. The precedent of the direct access model under development in the Adaptation Fund is important here.
    
3. In order to reach agreement on the reforms and improvements required to the LDCF a multi-stakeholder dialogue (perhaps electronically or through a workshop) should be convened to review the governance structure and operations of the Fund. The evidence considered would come from various sources, including this Evaluation. The dialogue should include representatives of the LDCs, current and future contributory countries to the LDCF, the LEG, the UNFCCC, the GEF Secretariat and the GEF Agencies. It should be facilitated by a third party (i.e. neither GEF Secretariat, nor GEF Agencies) and participants should agree to abide by the agreements reached. Replenishment of the Fund should take into account the reform dialogue conclusions.
    
4. Any replenishment of the LDCF for the longer term should be sufficient to support whole NAPA programmes, rather than individual project implementation.
    
5. The structure of the LDCF system needs to change such that the Fund is more responsive to LDC demands for more expeditious access. The role of the GEF Agencies, how they are contracted and who they report to should be reviewed. One option would be to enable LDCs to directly contract in the services of the GEF Agency they choose. The ’direct access’ precedent being set by the Adaptation Fund is also important.
    
6. Clear policy frameworks need to be tailored to specific country needs and circumstances early in the NAPA implementation process. It may prove necessary to swiftly mobilize supporting tools for adaptation planning. A way of doing this could
   be for the COP, or the LDCF Council, to decide to entitle the Fund to allocate
   a certain percentage of its financial resources for technical assistance support and development of supporting tools for implementation, including sector thematic guidance on how to integrate adaptation into development and how to address adaptation within key economic sectors. This would enable the Fund to collect lessons learned from policy and project level and ensure synergies between the two.
    
7. Also the future development, re-structuring and updating of the NAPA reports need to be considered. In order to better serve as a flexible and updated planning tool for governments, adaptation priorities need to be established for the short, medium and longer term, and the sequencing of priority implementation needs to be designed so that effectiveness and synergies between actions are assured. NAPA report review and updating on a biannual basis would be sensible and would allow NAPA priorities to be better incorporated into budgetary decision making at a central LDC government level^[106].
    
8. The COP should consider requesting the LEG to build upon the advances achieved in the LEG technical working paper on NAPA implementation strategies^[107] and the OECD/DAC guidelines on mainstreaming adaptation by developing more detailed guidelines on aligning NAPA priority projects with government planning and budgetary processes, in order to ensure better implementation plans.

LDC governments

9. Ministries of finance and/or planning should call each year for climate change adaptation priorities at the sector level for the purpose of the national budget construction. A climate change adaptation planning cycle needs to be started. This would provide a way of coordinating the investment of funds available from other sources.
    
10. Support for the establishment of strong national inter-institutional arrangements for adaptation planning needs to be put in place in order not to lose momentum from NAPA preparation and completion to implementation of NAPA priorities.
     
11. NAPA implementation planning should ensure that outputs are complementary to and aligned with the government planning cycle.
     
12. NAPA findings should be taken more seriously into account when developing SWAps and other sector investment programmes. LDCs should demand that donor agencies harmonise around climate change support and properly consider NAPA priorities when supporting adaptation.
     
13. LDCs should take a stronger co-ordinating role in regard to official development assistance support for climate change adaptation to avoid duplication and achieve synergies. NAPAs should be considered as the basis for the development of central programming documents for climate change adaptation.

Development partner agencies

14. Support to help LDC governments implement NAPA priority activities should be designed that maximizes national capacity development on climate change adaptation implementation through projects, integration into development and policy reform.
     
15. Development partners should seek to align with LDC adaptation priorities and use updated NAPAs to do so. In addition, development partners should reduce LDC transaction costs by harmonising approaches in support of adaptation and NAPA implementation.

LDCF Council

16. The agenda of the LDCF Council should draw on lessons learned on LDCF performance – including this Evaluation – in a more systematic way. This would allow better responses to the guidance and requests from the LDCs and the LEG. In addition, the Council should advise the LDCF administration how best to support the implementation of the remaining parts of the LDC work programme thus responding proactively to the COP decisions.
     
17. The timeliness and thematic breadth of the advisory support to the LDCF Secretariat needs to be strengthened by greater engagement of the LEG and other relevant adaptation experts.
     
18. Consideration should be given to how the LDCF’s performance could be strengthened through a budget line to initiate cross cutting projects on thematic issues that would support the individual NAPA priority project beyond the current “projectisised” approach and to set in place better frameworks for adaptation planning in the future.
     
19. LDCF should open a civil society-only funding window to support the delivery of climate change adaptation according to NAPA priorities by NGOs, CBOs and local organisations. This opportunity should be taken to test innovative funding schemes, e.g. ’pull’ mechanisms and output-based models^[108].

LDCF administration /LDCF team in the GEF Secretariat

a. Knowledge generation and dissemination:

20. Establish a help desk or hotline with direct access for countries, GEF Agencies and consultants working on project preparation.
     
21. Systematic and inclusive learning and reflection processes should be initiated as part of NAPA priority activity implementation so that LDCs and other stakeholders can draw lessons and identify ways of improving adaptation delivery. This will require: (a) adequate financial and technical resourcing of monitoring and evaluation for NAPA implementation, (b) that sufficient NAPA priority activities across different LDCs are synchronised to allow concurrent and therefore more easily comparable initiatives.
     
22. Significant multiplier effects would be possible by investing in programmatic implementation and careful scrutiny of the socio-economic costs and benefits of climate change adaptation in terms of learning outcomes and knowledge generation.
     
23. Implementation of NAPAs could be treated as piloting ways of (a) mainstreaming by both getting climate change adaptation priorities into sectoral planning through the generation of high level then more local scale policy developments, (b) the elaboration of policy instruments for adaptation and development objectives including in the areas of, for example, food security, water resources management, public health and disaster risk reduction and (c) to assess what approaches to project interventions, integration into development, capacity development and policy reform work best for adaptation outcomes.
     
24. It is essential to identify and to understand how LDCF supported adaptation actions can best address gender equality issues and women as agents of adaptation.
     
25. Resources should be invested in developing an understanding across different LDCs of the true escalating costs of climate change leading to adaptation needs. As part of this, finance and planning specialists from government and non-government agencies across LDCs should be convened into a community of practice on assessing costs and benefits of climate change adaptation using NAPA priority activities as case studies.
     
26. Issue guidelines and/or good practices on how to establish ’additional costs’ in adaptation projects, how to interpret the equitable access protocol and how to deal with co-financing requirements. Guidance should be developed and disseminated on good practices in NAPA priority activity implementation.
     
27. A knowledge base should be developed on climate change adaptation experiences at local through to national levels across LDCs where different types of governance systems prevail.
     
28. The technical advice available to the LDCF administration should be strengthened both through a permanent advisory body and ad hoc groups for addressing specific thematic issues.

b. Operational aspects:

29. In order for the LDCF to play a complementary role to the emerging other climate change financing mechanisms greater responsiveness and flexibility of procedures will have to be introduced to ensure lack of duplication and complementarity.
     
30. All the NAPA priority projects should use evidence-based inquiry into the ways climate change effects are differentiated between genders, introduce measures that identify women’s vulnerability to climate change, and listen to the voices of climate vulnerable women.
     
31. In order to reduce process time for the NAPA follow-up project preparation stage, it is advised to limit the documentation needs at the early phase of the cycle. This implies a risk, but this risk must be handled and mitigated later in the project cycle. This should be addressed promptly through consultation with representatives from recipient countries and stakeholders and agencies involved. Through discussion of experiences, pragmatic ways need to be identified to:
     
    • Shorten the project cycle by, for example, combining the PIF and PPG stages within a project inception stage. This is standard practice in development assistance funding. It will require further detailed guidance to countries in order to avoid uncertainties on the feasibility of the project and the project criteria,
       
    • Create stricter deadlines for the GEF Agencies on submission of project documents for CEO endorsement, e.g. a 12 months deadline for submission followed by a sunset clause,
       
    • Create transparent and clear criteria for reviewing PIFs, PPGs and other project documents including putting review sheets, or some version thereof, into the public domain, so that these are used only for issues that are crucial for the early preparatory phase – those issues relevant for the elaboration of a full project document should be dealt with at that later stage,
       
    • Introduce a common tracking procedure across the LDCF and the agencies, so that the status of a given project may be found irrespective of where it is in the cycle and with which agency it is in the process.

[106] The Evaluation concurs with the recommendations on NAPA up-dating made in the LDC Expert Group (2009) The Least Developed Countries National Adaptation Programmes of Action: Overview of preparation, design of Implementation strategies and submission of revised project lists and profiles. UNFCCC Secretariat.

[107] LDC Expert Group (2005) Elements for Implementation Strategies for national adaptation programmes of action UNFCCC/TP/2005/5, 2 August 2005.

[108] See discussion in the Malawi case study in Annex X.