Objective: To increase the resilience and adaptive capacity of those ecosystems and communities vulnerable to the adverse effects of climate change. Projects must focus on reducing vulnerability to climate change impacts as their primary objective.

Scope: In developing an SPA portfolio, the GEF will focus on particularly vulnerable regions, sectors, geographic areas, ecosystems and communities. The selection of particularly vulnerable sectors will be based on information contained in national communications to the United Nations Framework Convention on Climate Change, National Adaptation Programmes of Action (NAPAs) and other major national or regional studies.

The SPA also offers an opportunity to promote synergies between the Rio Conventions:

• Projects must generate global environmental benefits in one or more of the GEF’s focal areas of biodiversity, international waters, land degradation, persistent organic pollutants and climate change;

• Global environmental benefits as defined by these GEF focal areas will apply and will be used as a criterion to screen eligibility of projects;

• Multiple global environmental benefits across the focal areas are desirable, but not necessary.

Demonstrating impacts in one or more focal areas adds complexity to projects and may not be cost-effective for medium-sized or small full-sized projects. It is recognised that finding indicators to demonstrate impacts in a particular focal area may be difficult. In such cases, proxy indicators from another focal area could be used.

Activities: The activities to be supported will largely prioritise capacity building for managing and ensuring the sustainable use of natural resources under climate change. Some activities may be similar to those already funded through other focal area projects. In this case, where a need to modify such activities can be attributed to climate change, 'top-up' funding from the SPA is justified. Funding for investments will be eligible to the extent that incremental reasoning is applied. Examples of eligible activities are provided by the Intergovernmental Panel on Climate Change and in the Adaptation Policy Framework.

Outcomes: At the end of the adaptation pilot, the GEF will have learned how best to enhance the delivery of global environmental benefits across its portfolio under climate change. To achieve this outcome, the portfolio will be reviewed to identify best practices in critical regions and focal areas. The Adaptation Learning Mechanism will contribute to this review.

Outputs: A successful project is one where:

• Adaptive capacity of communities has been created and/or enhanced;

• Resilience of ecosystems has been enhanced, over and above the ‘without-adaptation’ baseline of the project;

• Global benefits can be demonstrated in one or more of the GEF focal areas.

Innovation: The GEF adaptation pilot offers the opportunity to test adaptation measures in key vulnerable sectors and focal areas. Consequently, SPA projects should generate lessons that are applicable in a wide context and can be used to develop good practices for integrating adaptation into GEF focal areas.

Cloning of projects is not recommended. New projects that have similar objectives and outcomes to projects that are already funded, or are in the pipeline, must have an additional innovative component in their project design. Innovation in the form of programme objectives or outcomes, institutional or implementation structure, monitoring and evaluation (M&E) framework, or indicators including addressing lessons learned from previous projects are all acceptable.

Portfolio mix: Diversity in the portfolio, as well as thematic clustering of projects, is highly desirable for the GEF. At this stage, UNDP’s SPA portfolio is being populated by projects in water resources management, coastal zones and drought management in Africa and Eastern Europe. Linkages with the focal areas of international waters, land degradation and biodiversity need to be further strengthened.

Blended projects: Multifocal area initiatives can be developed as ‘blended’ projects with funding from differing GEF focal area allocations.

Incremental reasoning: Projects should follow the GEF’s incremental reasoning. The baseline scenario is taken to be the situation without the project, and the alternative scenario is that which is required to ensure that the community and/or ecosystem are/is resilient to future climate change. The difference between the two scenarios is the incremental cost. Baseline and alternative scenarios should be established once vulnerability indices or UNDP programmes, such as NAPAs, have been used to prioritise the focal areas and site(s).

Adaptation to climate change starts with an understanding of coping strategies for dealing with the extremes evidenced in current climate variability. Often times, it will be operationally impossible to attribute a given extreme to climate variability or climate change. Therefore, the baseline is taken to be current coping strategies. The alternative scenario will include adaptation measures aimed at addressing climate change events in the longer term. Priorisation should be based on an assessment of the probability of a climate event occurring, and the magnitude of expected damages from it. That is, low probability/low impact events will receive the lowest priority, while high-probability/high impact events can expect to receive the highest priority for SPA funding.

Monitoring and evaluation (M&E): Projects under the SPA will have to demonstrate (a) a global environmental benefit in the selected focal area(s), and (b) that capacity has been created or resilience enhanced. For this purpose, a double (or multiple) set of indicators will be required to track both project outcomes and programme objectives. There should be adequate budgetary allowance to meet this M&E requirement for formulating a double set of indicators.

Cost sharing: The recommended co-financing ratios for SPA- projects is 50%:50%.