E Co. bites: What does the Green Climate Fund mean by ‘impact potential’?

23 July 2020, Category: All insights, E Co. bites, News

Watch our bite-sized and easily digestible video series, sharing our insights and experiences of designing low-carbon, climate-resilient development projects, across the globe. We discuss the who, where, what, why and hows behind successfully obtaining funding from major donors, including the Green Climate Fund (GCF) and Global Environment Facility (GEF).

Transcript 

Speaker: Ben Bartle

Question: What does the Green Climate Fund mean by ‘impact potential’?

When we talk about a project’s impact potential, we are really talking about the ability of the project to contribute to one or more of the fund level impacts, that is, the Green Climate Fund’s strategic mitigation or adaptation impact areas. For an adaptation project you would need to demonstrate the contribution towards increased resilience of a population or group of people, for mitigation you need to demonstrate the level of reduced or avoided GHG emissions.

When we want to demonstrate impact potential we need to think about how to target GCF investments for greater impact. GCF Board documents and our own experience points to the removal of barriers, especially within the public policy and regulatory frameworks domain, that could help to mobilize private and institutional investors at scale.

What’s important to note is the GCF board have been critical of earlier projects submited for approval, in terms of their potential for climate impact, which, in certain cases, was not sufficiently developed or well connected to the proposed activities. This was, particularly, in the case of some adaptation projects where the climate-related objectives of certain projects were not sufficiently clear and the impacts of GCF funding was in question. In such cases, projects developers need to think about how best to show there are clear impact pathways. In effect, for an adaptation project this means, estimating the likely impact of climate events on assets, economic production and demand, and health and well being.

Then, to demonstrate our adaptation impact potential, we can look at how our adaptation measures can prevent or reduce these losses and impacts. Here, we are asking: “What is our adaptation strategy and how specifically does it articulate improved resilience?” The esential indicator here is the number of beneficiaries with improved resilience. We can also use economic indicators of resilient economies, such as trade benefits or financial indicators such as cost savings potenital or prevention of losses.

For mitigation, our impact is a lot more about demonstrating how our project removes persistent barriers or addresses particular regulatory, technical or finanical constraints that prevent greenhouse gas emissions from being reduced, or locks economies into an emissions intensive pathway. The most obvious measure for mitigation projects, is the expected direct and indirect emission reductions.

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