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MDGF-1675: Climate Change Risk Management in Egypt

PLEASE NOTE THIS CONCEPT NOTE IS THE ORIGINAL SUBMISSION TO THE FUND. IN MANY CASES INDICATIVE BUDGET AMOUNTS APPROVED BY THE STEERING COMMITTEE ARE CONSIDERABLY LOWER THAN THAT REQUESTED AND INDICATED HERE-IN. FINAL BUDGET AMOUNTS WILL ONLY BE AVAILABLE AFTER APPROVAL OF THE FINALIZED DETAILED JOINT PROGRAMME DOCUMENT.
Thu, 2007/06/07 - 9:02am — james.w.rawley@...
Thu, 2007/06/07 - 10:37am
Thu, 2007/06/14 - 11:32am
james.w.rawley@undp.org
English  (current)

ID: MDGF-1675

Environment and climate change
Round 1
(26/04/2007 - 31/12/2009)
Egypt
$7,917,650
36 Months
Climate Change Risk Management in Egypt

Attached Documents:

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A. Applicant Information

Arab States
  • Lower Middle Income Country
  • Medium HDI, according to UNDP's 2006 Human Development Report
  • James W Rawley
  • james.w.rawley@undp.org
  • Fatoutmatta Sabally
  • fatoumatta.sabally@undp.org
  • Mounir Tabet
  • UNDP - United Nations Development Programme
  • Country Director
  • mounir.tabet@undp.org
  • Sami Kamel
  • UNEP - United Nations Environment Programme
  • UNEP Risoe Center
  • sami.kamel@risoe.dk
  • UNDP - United Nations Development Programme ($2,236,000)
  • IFAD - International Fund for Agricultural Development ($966,500)
  • UNESCO - United Nations Educational and Scientific Organization ($966,500)
  • FAO - Food and Agriculture Organization of the United Nations ($980,000)
  • UNIDO - United Nations Industrial Development Organization ($1,154,000)
  • UNEP - United Nations Environment Programme ($1,614,650)
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B. Concept Note

The aim of the proposed joint programme is to help Egypt align its climate risk management and human development efforts in pursuing the achievement of MDGs in the face of climate change and the predicted serious threats to the country. In this context, the project will serve to reduce poverty and mitigate risk by combining mitigation and adaptation under one integrated Climate Risk Management (CRM) banner with a special attention given to the vulnerable poorest populations of Egypt through two complementary approaches: ? Mainstreaming GHG mitigation into national policy and investment frameworks, including increased CDM financing opportunities; ? Enhancing the country’s capacity to adapt to climate change. The joint programme will build awareness and capacity of key decision makers and development actors to support the systematic integration of climate change as a new variable in key policy, regulatory, institutional and operational frameworks and implement pilot projects.

In the past decade, Egypt has taken important steps towards attaining the MDGs. Despite the country’s progress, the Common Country Assessment (CCA) points out that reaching the MDGs and ensuring economic growth, poverty reduction and social protection will be undermined unless the environment and natural resources are preserved from the increased pressure induced by the growing population. In response, UNCT has included two UNDAF Outcomes 1 and 3 in Egypt’s UNDAF 2007-2011, that address promotion of sustainable development concepts and climate change issues. Egypt is currently a minor oil exporter but will become a net oil importer by around 2015. Hence there is a national impetus to move towards a less GHG-intensive development path, mainly by becoming a more energy efficient economy and by making greater use of its large renewable energy potential. Nevertheless, the onerous energy price subsidy is constraining investment in the energy sector while the potential for GHG reduction is far from being exploited. In recent years, the Government has embraced several measures to promote the rational use of energy, culminating recently with the establishment of the Supreme Energy Council headed by the Prime Minister. This Council aims to revise national energy policies including energy efficiency measures, incentives for renewable energy, private sector investment in energy services and revise energy prices for large industrial facilities and other end-users. Continuing these efforts will help the Government better manage the budget deficit while contributing to the modernization of the economy and the reduction of GHG emissions through the implementation of energy efficiency and CDM Projects. Furthermore, Egypt is among the leading countries in Arab States region in terms of number of registered CDM projects and a developed pipeline of prospective projects. Nevertheless, the number of registered projects, size and scope of the portfolio are far below the country’s overall potential for CDM projects in energy and industry sectors. Despite Egypt’s actions, global warming and its associated effects are likely to aggravate the current environmental challenges. According to Egypt’s Initial National Communication (INC) to the UNFCCC, UNDP Global Human Development Report 2006 and the IPCC Fourth Report, Egypt proves to be highly vulnerable to climate change impacts that may jeopardize Egypt’s development gains. As identified in its INC, Egypt’s most vulnerable sectors to climate change are coastal zones, water resources and agriculture. Accordingly, climate change threats would inflict serious damage to human settlements, large parts of the productive agricultural lands and industrial areas in the North Coast. Estimates show that 0.5 m Sea Level Rise (SLR) would lead to the permanent submersion of 1,800 km2 of cropland in low lands in the Nile Delta and increase soil salinity in the remaining lands. The economic losses induced are estimated at over US$ 35 billion, including the loss of 30% of the total land area, and 195,000 jobs, jeopardizing the food security balance, and relocating more than 2 million people to the already over populated Nile Delta and Valley. SLR would also inflict severe damage on the large investments in summer resorts along the North West Coast. Climate Change could also cause significant variation in Nile stream flow, which provides Egypt with more than 97% of its renewable water resources. Available hydrological models have predicted an increase of 30% or a decrease that can reach 70% in the annual Nile flow. These two scenarios can have serious implications in terms of increased flood risks or droughts that could lead to cultivated lands shrinking associated with decrease in food production, loss of jobs and water conflicts. In recognition of the above-mentioned challenges, in April 2007, the UN Resident Coordinator initiated brainstorming meetings with UN Agencies, national experts and relevant government authorities to formulate a UN climate change initiative that includes mitigation and adaptation. The introduction of the UNDP-Spain MDG Achievement Fund will support the already established alliance in responding to the government needs in addressing climate change challenges.

The principal objective of the joint programme is to ensure achievement of the MDGs in the face of climate change in Egypt through sustainable energy development strategies and effective management of climate risks in key affected sectors. To support this objective, the programme will pursue the following four Outputs consolidated under two Outcomes as follows: Outcome 1: Mainstreaming GHG Mitigation and CDM into National Policy and Expanding Access to Finance Frameworks (Priority Areas I & III) Output 1.1: National policy reform for a more sustainable energy economy achieved The aim is to build a road map to progressively reform the energy sector. This will include policies and measures aimed at promoting energy efficiency, CDM, and renewable energy, especially designed to mitigate any social tension. The programme will also focus on enabling activities and on sequencing national, bilateral and international environmental financial support. This initiative will be led by the Supreme Energy Council in close collaboration with the Ministries of Electricity, Industry, Petroleum and Environment to achieve an enabling environment for investment in GHG reduction and CDM projects. Output 1.2: Expanded CDM Market The programme will follow the UNDP-UNEP approach to strengthen the capacity of the established CDM infrastructure including the Designated National Authority (DNA), local experts and other stakeholders to promote greater access to carbon finance. It will identify key sectors where carbon finance can bring significant development dividends and implement strategies, in collaboration with regulatory authorities, to remove key CDM access barriers for targeted sectors. Finally, project management services will be provided to demonstrate the profitability of carbon finance in nascent CDM markets. The current CDM DNA at the Ministry of Environment will be the key implementing agency and its capacity will be strengthened in this respect on development and management of CDM projects. Outcome 2: Enhanced capacity to adapt to climate change (Priority Area IV) Output 2.1: Adaptation strategies and practices integrated into climate-sensitive development policies, plans and programmes Capitalizing on Egypt’s SNC, the programme will target the agriculture, water and coastal zone development sectors and will analyze their respective policy frameworks at national and sub-national levels in order to identify and leverage critical entry points for systematic mainstreaming. Key decision-makers and stakeholders in the three sectors will be engaged in a national consultation process hosted by the National Climate Change Committee. Using UNDP APF guidance, specific adaptation decision-support tools will be developed to strengthen the CC Committee coordination capacity on integrating CRM and adaptive measures into the key sectors policies and plans. In the water sector, such tools will be developed in close cooperation with the Nile Basin Initiative’s water resources management project. The programme will enable the National Climate Change Committee to follow up on implementation of the adaptation strategies. Output 2.2: Pilot measures implemented and scaled up in support of adaptation mainstreaming and policymaking In collaboration with Ministries of Environment, Water Resources and Agriculture, the programme will pilot climate risk reduction strategies and measures in the above three priority sectors and advocate for scaling up successful pilots including in Nile riparian countries. Results and lessons learnt from these demonstration projects will feed back to the policy level and will support effective mainstreaming of adaptation concerns. The project will establish grounds in the Research Center of Ministries of Water and Agriculture to support up-scaling pilots into full fledged projects on the national level. This will include development of a Regional Circulation Model for Nile Basin that will useful to Egypt and to Nile Cooperation, as recommended by the Nile Council of Ministers and Secretariat since the developed tool will provide valuable guidance for climate change adaptation measures at the level of the basin. Specific up-scaling and replication mechanisms will be further investigated during the preparatory phase. Through the above framework, the programme will sustainably contribute to develop Egypt’s key policy-makers, national institutions, practitioners and vulnerable communities’ capacity to mitigate GHGs and to adapt to climate change.

Outcome 1: Mainstreaming GHG Mitigation and CDM into National Policy and Expanding Access to Finance Frameworks • Initiate a policy dialogue process with Supreme Energy Council and relevant Ministries and prepare a strategy to reform the energy subsidies scheme and to promote energy efficiency and renewable energy ; • Identify carbon finance opportunities in key sectors and develop a portfolio of CDM projects; • Provide hands-on training workshops, tools and materials for policy makers, financial institutions, professional institutions and practitioners to formulate and implement CDM and energy efficiency projects. • Analyze women’s and men’s energy use, transport use, other consumption patterns impacting climate; Outcome 2: Enhanced Capacity to Adapt to Climate Change • Analyze adaptation capacity gaps and needs, using suitable gender sensitive methodologies ; • Conduct policy assessments (climate-proofing) and formulate a national roadmap and action plan for enhancing the adaptation policy framework in the three targeted sectors; • Produce tools and guidelines and organize targeted workshops for decision-makers and practitioners on the design/implementation of adaptation responses; • Prepare and implement a communication strategy for raising awareness via various media channels • Establish a virtual climate change center to facilitate information sharing, promotion and dissemination of best practices, awareness raising and outreach mechanisms; • Identify and implement pilot/demonstration adaptation projects and develop funding strategy to support adaptation efforts. Implementation plan The following articulates the proposed main roles for each Agency while the detailed roles and responsibilities in the joint programme will be confirmed during the preparatory phase. UNEP will also focus on strengthening the capacity of the Designated National Authority (DNA) at the Ministry of Environment on processing CDM projects and building capacities of national key players. UNEP will also work on the development of a Regional Circulation Model (RCM) for River Nile to predict impact of climate change on the Nile water regime in collaboration with the Nile Basin Initiative (NBI) national Office at the Ministry of Water Resources and Irrigation and in full coordination with the NBI regional structures. UNEP will also support UNDP efforts on reforming the energy sector in collaboration with the Supreme Energy Council. UNIDO will complement UNEP’s activities on CDM with a special focus on the industrial sector in collaboration with the Ministries of Environment and Industry. IFAD will focus on improving and optimizing water resources management in agriculture. In addition, IFAD will help in the development of drought and heat tolerant crop varieties that cope better with harsh climatic conditions including testing in pilot projects in collaboration with Ministry of Agriculture and its research centres. FAO will complement the efforts of IFAD targeting the agricultural sector by providing the tools and information necessary to the Ministry of Agriculture for adapting agriculture and fisheries policies and practices to changing climate regimes. FAO will also assess the promotion of bio-fuels. UNESCO in collaboration with the Ministry of Water Resources and Irrigation will be building on UNEP RCM generated scenarios and outputs to conduct hydrological impact analysis of climate change, design suitable adaptation responses at the national level and test adaptation measures in pilot projects while UNDP will facilitate necessary collaboration with the NBI at the Nile basin levels. In addition, UNESCO will train MWRI staff and will establish a climate change knowledge network and a virtual climate change center, possibly with the Academy for Scientific Research. UNDP in collaboration with UNEP will advise the Supreme Energy Council on reforming the energy sector strategies to make investments in GHG reductions and CDM more economically attractive. UNDP will also liaise with UNEP on the implementation of CDM activities. UNDP will support UNEP and UNESCO efforts on the adaptation of the water resources sector and will facilitate proper coordination with the NBI structures. UNDP will implement pilot projects in the area of Integrated Coastal Zone Management (ICZM) and will investigate linking local actions with the ongoing UNDP decentralization initiatives in Egypt. In addition, UNDP will also support the integration of Climate Risk Management approaches in the UN Programming Frameworks. The following are the National Key Partners which are expected to be playing a role in the project: Ministry of Foreign Affairs is the Government Representative in all UN initiatives in Egypt. The Department of International Cooperation is the common Government counterpart for UN Agencies and national executing agencies in the implementation of UN projects in Egypt. Ministry of International Cooperation (MOIC) is mandated to follow up with all bilateral initiatives and it is a signatory of Egypt’s UNDAF. Nevertheless, since the source of funding of the project is from the Spanish Government, it is important to ensure MOIC engagement in the process aiming to promote the participation of bilateral and multilateral donors in building up on the achievements of the proposed prgoramme. After approval of the concept note, the project proposal will be shared with the Donor Assistance Sub-Group on Environment to solicit participation of other bi-lateral and multi-lateral donors in the full fledged programme. Ministry of State for Environmental Affairs (MESA) is hosting the Climate Change National Focal Point who coordinates the climate change activities on the national level. The Minister of Environment is the Chair of the National Climate Change Committee which reports to the Prime Minister on the coordination among the relevant ministries on mitigation and adaptation. The programme aims to strengthen the technical secretariat of the committee and provide it with tools to support its efforts in integrating climate change reduction in national development plans. The Ministry of Environment also hosts the CDM DNA which will be strengthened to better identify, develop, negotiate, and oversee implementation of CDM projects. By the end of the project MESA should have a strong team, an enabling environment and a coordination mechanism that is capable of promoting CDM and energy efficiency initiatives on the national level. Ministry of Water Resources and Irrigation (MWRI) is the responsible body in Egypt for management of water resources and coastal zone protection; and it hosts the NBI National Office. Through this office, the MWRI will ensure the integration and coordination of national activities with basin-level initiatives. The staff from the Ministry will be engaged in the development of the RCM for the River Nile as well as the local water management models in partnership with the Water Resources Planning and Management Project of the NBI. The Ministry Staff will also be trained on the operation of the developed models, and generation of adaptation scenarios to integrate climate change in the decision making process that will continue after the end of the project. The programme will also work with the Shore Protection Agency and Coastal Research Institute of MWRI on the development and training on ICZM tools to reduce the risks associated with Sea Level Rise and support the decision making process on future coastal zone planning and response to SLR threats. Ministry of Agriculture is responsible for agricultural in Egypt. The programme will assist a national research programme in the climate change specialized institutes within the Agricultural and Desert Research Centers on the adaptation of the agricultural sector to accommodate possible shortage of water and impact of increased temperature on the cultivated species. The Ministry will also work closely with the UN agencies on the implementation of pilot projects involving the new species. Supreme Energy Council is the highest forum which decides on national energy strategies and policies that is chaired by the Prime Minister and includes Ministers of Electricity, Industry, Environment, and Petroleum which are key players in drafting the energy sector reform. The project will provide technical assistance and advice to the secretariat of the Council or one of its affiliated agencies on the proposed measures and policies to promote sustainable market for energy efficiency, CDM and renewable energy projects in Egypt.

A detailed monitoring and evaluation plan will be developed during the programme preparatory stage. The baseline situation, targets and measurement methodologies will be further refined to allow for the measurement of the initial situation, progress and quality throughout the implementation phase. A potential risks could arise from managing a programme that includes six UN agencies and several government institutions. To overcome this risk, the management arrangements that would ensure high level of coordination, effectiveness and efficiency of the project will be finalized during the preparatory phase in addition to preparing a comprehensive risk management strategy for the project. Below is a tentative list of performance indicators: Outcome 1: Mainstreaming GHG Mitigation and CDM into National Policy and Expanding Access to Finance Frameworks Indicator: The retail price of energy to the end-user Baseline: Price of energy inferior by up to 75 % compared to similar energy markets Target (end of the Programme): National energy prices is aligned with energy markets Measurement Methodology: Energy tariffs survey Indicators: Number of PDDs registered through the programme Baseline: zero Target: Registered PDDs in at least 3 sectors Measurement Methodology: UNFCCC CDM Exec Board website data Outcome 2: Enhanced capacity to adapt to climate change Indicator: Extent to which the water, agriculture and costal zone development sectors are resilient to climate change impacts Baseline: Incorporation of adaptation considerations into current policies, plans and programmes is unsatisfactory Target: Policy frameworks in the three sectors are revised so as to integrate adaptation considerations in a fully satisfactory manner Measurement Methodology: Use of adaptation performance scorecard, including a ‘’climate risks’’ screening tool and a set of adaptation indicators Indicator: % of policy-makers and sectoral actors who are aware of climate change risks and capable to design suitable adaptation responses Baseline: Less than 10% Target: At least 50% Measurement Methodology: Quality-Based Survey of stakeholders Indicator: % of the costs of climate change impacts in the targeted sectors avoided by pilot measures (US$) Baseline: tbd Target: Costs of losses due to climate change reduced by 60% relative to baseline Measurement Methodology: Climate impacts cost assessment survey

The UN system in Egypt is currently represented by twenty-four agencies with offices in Egypt that are supporting its people in a variety of ways. While each of these agencies pursue their specific mandate, they all collaborate within the framework of the Resident Coordinator System and support the implementation at the country level of the UNDAF and UN Secretary-General’s programme of reform. There is a long history of collaboration among several of the participating agencies in implementation of joint initiatives on climate change issues. On the Strategic level UNDP and UNEP have recently signed their Partnership Framework Agreement on Climate Change and prior to the agreement UNDP-GEF Energy Efficiency Project was participating in UNEP’s Capacity Development for CDM project in Egypt. UNDP was also engaged recently with FAO in implementation of projects that address protected cultivation and genetic engineering which are important elements of the adaptation of the agricultural sector. UNDP has also collaborated with UNESCO on the protection of groundwater resources in the Nile Delta that is at risk from the Sea level Rise. Meanwhile, there are ongoing discussion to develop synergizes between the UNIDO Cleaner Production Center and the UNDP-GEF Energy Efficiency Project on the implementation of mitigation projects. The consultation process among the UN Agencies to formulate a UN Climate Change Initiative has started prior to the announcement of the MDG Fund in recognition of the serious Climate Change risks that threatens Egypt. In this context, meetings and consultations among UN Agencies have started early April 2007 and chaired by the UN RC including representatives of UNDP, WFP, IFAD, UNIDO, FAO, and UNESCO. However, the meetings intensified after the announcement of the environment funding window that has yielded this proposal. A Programme Board will be established including representatives of all collaborating UN Agencies and relevant Ministries, such as Ministry of State for Environmental Affairs that host the Climate Change National Focal Point, Ministry of Water Resources and Irrigation, Ministry of Agriculture, Ministry of Electricity and Ministry of Industry, Ministry of Petroleum, Ministry of Foreign Affairs and Ministry of International Cooperation in addition to the Spanish Embassy and chaired by the UN Resident Coordinator. A meeting was held in UNDP in May 2007 for the small Programme Board to review this concept note that included representatives of the Ministry of Foreign Affairs, Spanish Embassy, Ministry of State for Environmental Affairs, UNEP and UNDP. The concept note was endorsed in the meeting with minor corrections and the Government representative described the programme as a timely and of great importance for Egypt. Intensive consultations with all other key partners will be conducted in the preparatory phase to ensure participation in design and later on implementation and monitoring and evaluation of the programme. A national full-time Joint Programme Manager will be recruited and agency task managers will be designated. The Programme Manager will be responsible for daily programme management and will coordinate with designated task managers in the relevant agencies who will be collaborating with the host national counterpart for each programme component. The Manager will be accountable and reporting to the Programme board. An Advisory Board for the Programme will be established comprising renowned national experts who are involved in the GEF-UNDP Second National Communication Project (SNC). The potential Advisory Board has convened in May 2007 to review the proposal and have emphasized the importance of the project proposal to Egypt and provided useful inputs to the concept note. The detailed TOR for Board, Advisory Board, Joint Manager, and agencies task managers will be developed during the preparatory phase. The programme will collaborate with the National Climate Change Committee in coordination with the SNC project. The programme will mobilize private sector involvement as well as NGOs and will also coordinate with the relevant NBI structures. Furthermore, during the preparatory phase of the programme, consultations aiming collaboration or synergies with ongoing programmes will be carried out with other Donor Assistance Agencies.

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C. MDG-Related Indicators

  • Goal 1: Eradicate extreme poverty and hunger
  • Goal 7: Ensure environmental sustainability
  • 1. Proportion of population below $1 (PPP) per day
  • 2. Poverty gap ratio [incidence x depth of poverty]
  • 27. Energy use (kg oil equivalent) per $1 GDP (PPP)
  • 28. Carbon dioxide emissions per capita and consumption of ozone-depleting CFCs (ODP tons)
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D. Formulation Advance

Yes
$20,000
UNDP - United Nations Development Programme
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E. Resident Coordinator's Undertakings

  • The Concept Note has been reviewed by the national government and the UN Country Team.
  • If approved by the MDG-F Steering Committee, the UN Participating Organizations undertake to submit a draft Joint Programme Document within eight weeks of notification.
  • All UN Participating Organizations have or will sign the global Memorandum of Understanding with the Multi-Donor Trust Fund Office.