Climate Change STRATEGY

Enabling poor rural people to overcome poverty

 Climate Change
Strategy

Enabling poor rural people to overcome poverty

Cover photo: © IFAD/G.M.B.Akash
Printed by Palombi & Lanci, Rome
May 2010
Contents

Abbreviations and acronyms 3

Executive summary 6

1. Background 8
2. How a changing climate will affect poor rural women and men 10
Impact of a changing climate 10
Impact of the world‘s response to climate change 11
Enhancing IFAD’s approach to rural development 13
3. Maximizing IFAD’s impact on rural poverty in a changing climate 18
Operations 19
Knowledge, innovation and advocacy 21
Resource mobilization 24
Organization 25
4. Measuring success 28

Annexes
I. IFAD Climate Change Strategy results and implementation framework 30
II. IFAD/GEF portfolio: Building on a strong foundation 32

Abbreviations and acronyms

COSOP country strategic opportunities programme

ENRM environment and natural resource management
ESA environment and social assessment
FAO Food and Agriculture Organization of the United Nations
GDPRD Global Donor Platform for Rural Development
GEF Global Environment Facility
IFI international financial institution
KSF key success factor
LDCF Least Developed Countries Fund
NRM natural resource management
ECD Environment and Climate Division (IFAD)
QE quality enhancement
RB-COSOP results-based COSOP
SCCF Special Climate Change Fund
UNCCD United Nations Convention to Combat Desertification
UNFCCC United Nations Framework Convention on Climate Change

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 © IFAD/David Rose

5
 Executive summary

The speed and intensity of climate change largely on agriculture and natural resources
are outpacing the ability of poor rural – particularly at women as producers and
people and societies to cope. Many indigenous people as stewards of natural
smallholders with whom IFAD works are resources. But there is recognition that
already reporting impacts on the key climate-related risks, and potential
ecosystems and biodiversity that sustain opportunities, can be addressed more
agricultural production, rural infrastructure, systematically within our projects and policy
market opportunities and rural livelihoods. advice. For example, we cannot rely on
The world’s response will have an impact historical rainfall and temperature averages,
on the ground through the degrees of since climate change is increasing the scale
temperature increase, whether smallholders of volatility and risk. We need to be alert to
will be able to benefit from credible financial new sources of risk, and there may be more
mechanisms for mitigation, and whether opportunities in the future to reward
additional public climate financing will reach emissions reductions.
poor rural people.
Environmental threats such as climate
IFAD is enhancing its approach to rural change are inseparable from IFAD’s mission
development in the context of increasing of helping poor smallholders (including
environmental threats, including climate fishers, pastoralists and agroforesters).
change. Our programmes will continue Climate change is multiplying their existing
to reflect the complex reality of poor risks, creating new ones, and – depending
smallholder businesses, where issues are on the global response – creating some
not contained neatly in boxes labelled new opportunities as well. The goal of
according to global issues. And IFAD will this strategy is to maximize IFAD’s impact
continue to target its investments at the on rural poverty in a changing climate.
poorer and often most climate-change- This goal is further articulated in three
affected people – whose livelihoods depend statements of purpose: to support
innovative approaches to helping
smallholder producers – both women and
men – build their resilience to climate
change; to help smallholder farmers take

6
advantage of available mitigation incentives IFAD’s core programmes and to
and funding; and to inform a more coherent cover the increased cost this implies.
dialogue on climate change, rural We will seek to mobilize additional
development, agriculture and food security. Global Environment Facility (GEF)
resources for global environment and
IFAD is already active on climate change, climate change activities.
but it can do more. The main strategy • On internal organization, IFAD will make
output is a more ‘climate-smart’ IFAD, greater use of existing in-house skills
where climate change – alongside other and people, and will implement a new
risks, opportunities and themes – is organizational structure that brings
systematically integrated into core together and increases its staff capacity
programmes, policies and activities: on climate and the environment. It will
• On operations, climate change can be – also continue to demonstrate the values
and in many cases already is – factored of environmental awareness internally.
into IFAD’s operating model. This means
incorporating it into our toolkit for the Key partnerships are addressed throughout
early stages of country programme and the strategy, based on the principle that
project design and for implementation. IFAD will have the most impact when we
• On knowledge, innovation and advocacy, work with and through others.
IFAD will: explore new arrangements for
sourcing climate-related expertise, share
ground-level experiences to ensure their
application throughout IFAD-supported
programmes, and continue our work
to shape the global dialogue on climate
change for smallholders.
• On resource mobilization, our primary
focus is to make IFAD’s expanding
overall portfolio climate-smart. Increased
supplementary climate funds will
continue to be sought to deepen the
integration of climate change into

7
 Background

At the Consultation on the Eighth role. It has benefited from consultations

Replenishment of IFAD’s Resources, in with international financial institutions (IFIs),
2008, the Executive Board requested that a foundations, civil society and donor
corporate strategy on climate change be agencies. Many elements of the strategy
presented for approval by April 2010. The will benefit from further consultation
Board requested a strong operational focus. and development in our work to develop
This focus ensured that IFAD activities at the environment and natural resource
the country level are consistently and management (ENRM) policy, which will
systematically built on an awareness of the address a range of environmental
potential effects of climate change, and that, challenges and provide a more detailed
wherever appropriate, climate change focus on IFAD’s natural resource

1
adaptation is incorporated into project management (NRM) activities.
design in a manner consistent with national
policies and that supports governments in Annex I provides a results and
realizing their climate change objectives. implementation framework for the strategy.

This strategy is based on extensive in-

house and targeted external consultation.
It is the work of an internal IFAD policy
reference group on climate change, in
which all key IFAD divisions played an active

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 © IFAD/R. Ramasomanana

9
 How a changing climate will affect
poor rural women and men

Impact of a changing climate Many communities with which IFAD works

are already reporting changes:
Agriculture is where climate change, food • The key ecosystems and biodiversity
security and poverty reduction intersect. For that sustain agricultural production.
most of the one billion extremely poor and Climate change contributes to: reduced
hungry people in developing countries, water resources; changes in the primary
agriculture is the main income source. productivity of crops, forage and
These people are already vulnerable, and rangeland; changes in the composition
climate change will in most cases increase of plant varieties and quality of plant
this vulnerability. While trying to cope with material; and reduced biodiversity,
the effects of a warmer climate, agriculture marine life and animal (and human)

2
is simultaneously facing two other health. For some countries, the decline
challenges: it must double food production in yield from rainfed agriculture could be
in developing countries by 2050 to meet as much as 50 per cent.1 Scarce and
population increases and dietary changes, highly variable rainfall has already
and must be central to efforts in decreased the resilience of the high
greenhouse gas reduction. plateau rangeland ecosystems in eastern
Morocco – the Alfa grass ecosystem is
Climate change is a ‘threat multiplier’ – it severely degraded and the carrying
increases a range of livelihood threats and capacity of rangelands is no longer able
vulnerabilities, rather than being an isolated to sustain growing demand.2
1 Cline, W. R., Global
specific risk. Over the centuries, human • Rural infrastructure and market
warming and agriculture. societies have developed the capacity to opportunities. Fragile rural
Impact estimates by
country (Washington D.C.: adapt to environmental change and climate infrastructure, such as rural roads,
Centre for Global variability. These adaptations include drainage and irrigation systems, storage
Development and the
Peterson Institute for practising shifting cultivation, adopting new and processing, and livestock
International Economics, crop varieties and modifying grazing infrastructure will come under increasing
2007).
2 Source: Direct
patterns. But today the speed and intensity pressure. In turn, market opportunities
experience of IFAD- of climate change are outpacing the speed for smallholder farmers will be reduced.
supported projects.
of those autonomous actions and threaten For example, IFAD’s Viet Nam country
3 Easterling, W. E., P. K.
Aggarwal, P. Batima, K. M. the ability of poor smallholders and rural strategy describes how flooding has led
Brander, L. Erda, S. M.
societies to cope. In the countries most to extensive damage to irrigation
Howden, A. Kirilenko, J.
Morton, J.-F. Soussana, J. reliant on rainfed agriculture and natural systems and other agricultural
Schmidhuber and F. N.
Tubiello, “Food, fibre and
resources, poor rural women, who are often infrastructure. Reduced availability of
forest products,” in Climate the primary food producers, but have fewer food in local markets as a consequence
Change 2007: Impacts,
Adaptation and Vulnerability. assets and less decision-making power, are of climate change may also increase
Contribution of Working even more exposed than men. food prices. According to the
Group II to the Fourth
Assessment Report of the Intergovernmental Panel on Climate
Intergovernmental Panel on Change, a global mean temperature
Climate Change, ed. M. L.
Parry, O. F. Canziani, J. P. increase of 3 to 5 degrees could lead to
Palutikof, P. J. van der
a pronounced increase in food prices of,
Linden and C. E. Hanson
(Cambridge, United on average, 30 per cent.3
Kingdom: Cambridge
University Press, 2007),
273-313.

10
• Rural livelihoods. Despite urbanization, issue owned by one single environment
the majority of the poorest people ministry to one owned by heads of state
continue to live in rural areas and to and shared by all key ministries, including
depend on agriculture for their agriculture ministries. Otherwise the national
livelihoods. Environmental degradation, and global dialogues risk progressing along
erosion of natural resources and separate and incoherent tracks.
biodiversity loss are challenging their
ability to cope with and adapt to climate The global response will itself have an impact
change, and to ensure food security. on smallholders. Climate negotiations will
Climate change may result in more continue in 2010 with the aim of achieving
migration, food insecurity, conflict over progress at COP16 (the Conference of the
scarce resources (for example between Parties of the UNFCCC) in Mexico. The
pastoralists and agriculturalists) and global response to climate change will have
possible forced sales of livestock and an impact on smallholders through three
other assets. As primary providers of main channels:
food, fuel and water in most developing
countries, women are on the front line of First, the extent of global emissions
climate change impact. Indigenous reductions, and the extra cost to poor
peoples are particularly affected due to rural people associated with inaction. The
their high dependence on the natural longer it takes to reach an ambitious
resource base. Communities where IFAD agreement on global emissions reductions,
works have noticed changes in the the higher the likely temperature rise and
duration of heat and cold waves, and in the greater the additional risks and costs
the patterns and predictability of rainfall. to smallholders. According to the World
In Mongolia, for example, where average Bank, developing countries will need
temperatures have risen 1.8ºC over the US$75-100 billion extra per year for the
last 60 years,4 the melting of high cost of adaptation to climate change over
mountain glaciers has increased and the period 2010-2050.5 In the agriculture,
permafrost is degrading. The ground forestry and fisheries sectors, the cost
water table is decreasing in arid regions, would range from US$7.3 billion to
and degradation and desertification of US$7.6 billion per year.6
the land have been intensifying due to
the shortage of water and precipitation. Second, the extent to which smallholders 4 Cruz, R. V., H. Harasawa,
will be able to benefit from credible M. Lal, S. Wu, Y. Anokhin,
B. Punsalmaa, Y. Honda,
financial mechanisms for mitigation. Land M. Jafari, C. Li and
Impact of the world’s use is a big part of emissions – agriculture N. Huu Ninh, “Asia,” in
Climate Change 2007
response to climate change represents 14 per cent7 and is the main (see note 3), 475.
driver of other land-use and forestry 5 World Bank, Economics
of Adaptation to Climate
National and international policymaking on Change (Washington, D.C.,
poverty reduction, food security, climate 2009).
6 The World Bank analysis
change and the environment (including
estimates adaptation costs
biodiversity and land degradation) has often for major economic sectors
under two alternative future
treated each issue separately. This is scenarios: wet and dry, both
changing, but it reflects a deep challenge at based on 2°C warming
during the 2010-2050 period.
the country level, not just in poor countries,
7 Agricultural emissions
but in many richer countries as well. include carbon dioxide
mainly from land-use
Climate change needs to transform from an
changes; methane from
the livestock sector and
rice production; and
nitrous oxides from the
use of fertilizers.

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 emissions, which represent an additional potential – reform of the rules governing the
18 per cent. Smallholders account for only carbon market to allow smallholders greater
a small part of agricultural emissions, but access to carbon finance8 is a possibility
they provide a wide range of largely that IFAD will be watching closely.
unrewarded environmental services that can
contribute to carbon sequestration and limit Third, whether public climate financing is
other greenhouse gas emissions made available to and will benefit poor
8 These include allowing (see box 2 for examples). Rewards for rural women and men. It is highly likely that
more land-use activities in
the Clean Development mitigation services come from a number of climate change will become a more
Mechanism (CDM), dealing
sources, but they are currently limited and prominent driver of international financial
with the disincentives for
temporary credits to land- do not exist at the scale required. For support. The Copenhagen Accord includes
use activities in the CDM,
enabling more programmatic
agriculture and forestry, for example, carbon a ‘fast-track’ provision of “approaching
CDM approaches that markets are still thin and evolving, with US$30 billion for the period 2010-2012” to
reduce transaction costs
for farmer cooperatives, underdeveloped rules, uncertainty as to be balanced between adaptation and
allowing countries to opt their depth, and concerns about the mitigation, “a goal of mobilizing jointly
for agriculture in nationally
appropriate mitigation potential impacts of capture by larger-scale US$100 billion a year by 2020 to address
actions, and a concerted investors or of benefits not being passed on the needs of developing countries,” a
approach to agreeing on
workable methodologies to smallholders. But they hold tremendous commitment to set up a forestry financing
to make soil carbon actions
mechanism, a high-level panel to look at
monitorable, reportable
and verifiable. innovative sources of international finance,

BOX 1 Climate-related IFAD-supported projects: Some examples

Supporting rural people in adapting to harsh climatic conditions has been at the centre of many
IFAD-supported projects. For example:
• In Mongolia, the Livestock Sector Adaptation Project, to be financed through the GEF-managed
Special Climate Change Fund, aims to increase the resilience of the Mongolian livestock
system to changing climatic conditions by strengthening natural resource management,
‘climate-proofing’ pasture water supply, and building the capacity of herders' groups to address
climate change.
• In Kenya, the Mount Kenya East Pilot Project for Natural Resource Management seeks to halt
the environmental degradation, flooding and drought resulting from deforestation and
inappropriate agricultural practices in one of the regions most vulnerable to climate change.
• In Bangladesh, the Special Assistance Project for Cyclone-Affected Rural Households
supported poor rural households hit by the 1991 cyclone in protecting their dwellings against
floods, and established 10 cyclone shelter centres.
• The Western Sudan Resources Management Programme in The Sudan and the Pastoral
Community Development Project in Ethiopia both established early warning systems that
enable rural populations to adjust their livelihoods to the expected effects of drought.
• The Kidal Integrated Rural Development Programme in Mali seeks to establish an environmental
monitoring system for risks such as drought, locusts and livestock diseases, and foresees
measures to mitigate their impacts.
• In China, where farmers are exposed to regular crop failures induced by erratic weather
patterns, IFAD has co-funded an initiative to develop and implement an index-based weather
insurance system.

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and a new Copenhagen Green Climate Enhancing IFAD’s approach
Fund. Much of the financial architecture to to rural development
channel this potential flow has yet to be
determined. It is also not clear how much of Our programmes will continue to reflect the
climate finance will be additional to existing complex reality of smallholder farming
commitments of official development businesses, where issues are not contained
assistance. IFAD will continue to press for neatly in boxes labelled ‘climate’,
disbursement processes that recognize the ‘environment’, ‘food security’ or ‘migration’.
particularly high level of synergy between Issues often discussed separately at the
adaptation and mitigation that exists in international level are interlinked and
most sustainable agricultural projects; for integrated for the smallholder farmer.
climate finance mechanisms that reach
smallholders; and for adaptation to be given Thus IFAD’s approach to programme
a prominent place in the provision of public development continues to be holistic – we
finance for climate change. IFAD will will not look at climate change in isolation.
continue to help mobilize available funding Climate-related risks and opportunities will
for poor rural women and men farmers and be assessed in a wider development
managers of natural resources. context including other environment-related
issues – such as population pressures or
local pollution. This is done for conceptual

IFAD projects are already addressing mitigation indirectly through reforestation and improvement of
land use and land management practices. Examples include:
• Implementation of 4,500 hectares of agroforestry systems in Rwanda, increasing yields and
reducing erosion.
• Assisted tree regeneration in the Niger, covering about 100,000 hectares and contributing to
restoring soil fertility and sequestering carbon.
• Two IFAD-supported projects in China are promoting renewable energy. The West Guangxi Poverty
Alleviation Project is helping promote household biomass units, transforming human waste and
animal dung into biogas for lighting and cooking in rural areas. By 2006, almost 30,000 households
had benefited from biogas tanks, saving 7,500 hectares of forest each year. The Xinjiang Uygur
Autonomous Region Modular Rural Development Programme is working to help poor rural people
install solar systems to meet their power needs.
• Two grants to the World Agroforestry Centre (ICRAF) to develop and pilot mechanisms for
rewarding environmental services in Asia and Africa, through, respectively, the Programme for
Developing Mechanisms to Reward the Upland Poor of Asia for the Environment Services They
Provide and the Programme for Pro-poor Rewards for Environmental Services in Africa (PRESA).
• The installation of small-scale biogas digesters and provision of 11,500 units of energy-saving
stoves in Eritrea is another example of a small-scale mitigation intervention.

See Annex II, “IFAD/GEF portfolio: Building on a strong foundation” for a detailed description
of GEF- and IFAD-supported programmes.

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 and practical reasons – climate change There is a growing recognition, however,
often multiplies such risks – and for by our clients and in development
operational purposes they should not be organizations that we are often overlooking
assessed in isolation. risks – and potential opportunities –
created by climate change. This was
Climate change does not mean throwing reflected in the ARRI 20099 report in the
out everything IFAD has learned about rural wider context of the ENRM. A 2006 study
development; we must instead build on this by the World Bank10 found that a quarter of
learning. Many of IFAD’s programmes are World Bank projects were assessed as
implicitly or explicitly designed to increase exposed to a ‘high’ climate risk, but that
the resilience of smallholders and poor only 2 per cent of projects identified climate
communities to shocks – many of which are risk in their project design documents.
weather-related. A coherent response to More systematic attention in IFAD-
climate change requires continued supported operations to climate-related
emphasis, for example, on country-led risks and opportunities requires additional
development, gender awareness, targeting reflection and analysis as we engage with
of poor rural people, sustainable poor communities:
management of natural resources, dealing • We can no longer rely on historical
with land tenure issues, improving credit averages – climate change is
markets, strengthening the quality of local increasing the scale of volatility and
and national governance, and increasing risk. For example, historical drought or
productivity. It also remains essential to flooding frequency is less and less a
recognize the relevance of farmers’ guide to the future. And most crops
traditional and indigenous knowledge in are already grown at the limits of their
addressing issues such as climate temperature tolerance.
variability, and the differences between • The impact of a changing climate on
women’s and men’s knowledge and roles in long-term trends needs to be better
responding to climate change. understood. While impacts are already
being felt, the worst impacts will be felt
The process of overall agricultural and rural later. For many regions, science yields
development can in itself build the resilience clear projections (e.g. drought in North
of poor rural women and men to climate Africa). Project appraisal has often
change. IFAD’s existing and increasing discounted such future project risks.
portfolio of support to the building of IFAD’s programmes will now draw on the
agricultural productivity, value addition, latest regional and country climate
markets and rural infrastructure remains projections to be alert to the resulting
important. Making better use of more- risks and opportunities.
productive land also reduces pressure on • There will be new sources of risk
farmers to practise extensive approaches beyond the traditional ones – such as
that, with increasing population pressure, sea-level rise and glacier-melt impact on
are so vulnerable to climate risk and are water supply. Smallholder businesses
9 IFAD, Annual Report on also a major cause of deforestation. will need to increase their general
Results and Impact of IFAD
Operations (ARRI) evaluated
resilience to withstand currently
in 2008 (Rome, 2009). unidentified shocks. New opportunities
10 World Bank, Clean for emission rewards will bring their own
Energy and Development:
Towards an Investment
Framework, prepared
for the World Bank/
International Monetary Fund
(IMF) Development
Committee meeting, April
2006, 120.

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 risks – for example, if poor people were • Disaster risk management is a major
to be excluded from such benefits element of building resilience to climate
through social exclusion and limitations change. Thus disaster prevention and
on land-use rights. ‘Maladaptation’ – recovery are likely to increase in
project design that exacerbates prominence – for example, flood and
vulnerability – is also a risk (for example, drought risk management, and
facilitating habitation in a flood plain). emergency response and rehabilitation
• Depending on the outcome of to damaged rural infrastructure and
international climate negotiations, there agricultural capacity.
may be more opportunities to reward • Beyond sectors, there will be greater
emissions-reduction activities. Payment use of new tools and approaches.
systems are currently fairly complex and There is scope to improve the relevance
may remain so, but rural development and quality of climate-related information
practitioners need to be alert to any to smallholders. Financial services
potential future or existing opportunities programmes, such as microinsurance,
to reward smallholders for the mitigation are being modified to incorporate
benefits they produce, including through climate risk, including affordable weather
access to the carbon market11. index-based insurance that can help
smallholder households in developing
Given that the response to climate change countries improve their financial security
requires effort across all sectors, and will and protect their livelihoods in the event
vary by country, this strategy does not of extreme weather events and natural
make specific sectoral recommendations. disasters. Participatory and vulnerability
Some country programmes may require mapping techniques12 are being used to
only additional elements or a change improve community-based adaptation
of emphasis within some projects. Others efforts. New technologies are being
may require a major rethinking of IFAD’s piloted or scaled up to assist in building
sectoral engagement and emphasis – resilience (e.g. special irrigation piping
for example where sea-level rise is that enables waste water and salt water
threatening coastal areas. However, some to be used for irrigation purposes).
generalizations are possible: Potential modifications to farming
• Overall, the response to climate change practices are described in box 2.
threats to agriculture is likely to result in • Depending on the further development
greater support to NRM – such as land of carbon markets, there may also be
degradation programmes, water greater investments in helping poor
management and community-based smallholders – including women and 11 As an example of
forest management. Efficient irrigation indigenous peoples – access possible collaboration in
pro-poor mechanisms, IFAD
systems, improved water management emissions-reduction incentives such as will support a pioneering
and harvesting, and sustainable use of voluntary or formal carbon markets. national programme in
Ecuador (Sociobosque) to
ground water are effective adaptation reward poor rural people for
conserving forests and
measures that will help build smallholder
reducing emissions.
resilience, particularly in drylands (box 2). 12 See, for example, the
This is because the first-round impacts decision-support tool
CRiSTAL(Community-based
of climate variability are being felt in Risk Screening Tool –
changes in natural resource availability. Adaptation & Livelihoods).
Training was organized in
This will be further elaborated in work to IFAD in the context of
the CLIMTRAIN project,
develop our environment and natural
and the tool was used
resource management policy. to undertake an adaptation
review in three ongoing
IFAD projects in Brazil,
Kenya and Mongolia.

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 Such investments will be assessed like For example, sustainable management
any other market-creating activities. of forests, as an approach that
Investments in emissions-reduction encompasses social, economic and
activities are likely only when they either environmental goals, offers good
yield an income-diversifying payment for opportunities to reduce deforestation
poor people or they are ‘win-win’ – that and increase carbon sequestration.
is, they would be done anyway since
they benefit the community even without
specific rewards for reduced emissions.

BOX 2 Technical examples of adaptation and mitigation in agriculture

Issue Activity
Crop management Applying conservation agriculture – minimum disturbance of soil,
in combination with maintenance of year-round soil cover plus
crop rotation, preferably with inclusion of leguminous crops to boost
soil nitrogen.
Adopting new crops, crop rotation and/or crop varieties, adjusting
the time of planting/harvesting; introducing integrated soil-fertility
management systems that cater to the nutritional needs of
the crop without polluting the environment; and integrated water-
management practices.
Rangelands and pasture Managing grazing systems and grazing intensity, fire management
management and pasture rehabilitation.
Livestock management Modifying herd composition: varied species/breeds; adapting grazing
management practices to increase soil carbon.
Reducing greenhouse gas emissions from livestock by improving
animal nutrition, breed selection and manure management.
Restoration of degraded Applying erosion control, soil and water conservation, organic
lands with high production amendments, perennial or deep root crop systems.
potential Improving land and soil, including drainage, desalinization, addition of
gypsum to renovate sodic soils.
Coastal management and Promoting non-destructive fishing techniques to maintain resilience of
fisheries marine ecosystems; aquaculture in areas inundated by rising sea levels.
Achieving carbon sequestration in mangrove plantations and culturing
of seaweed and algae for food and biofuel.
Bioenergy Using crop residues, cellulosic crops (e.g. switchgrass), non-food
biofuel crops (e.g. Jatropha, Pongamia), dual-purpose biofuel crops
(e.g. sugar cane, sweet sorghum, cassava) and biogas.
Disaster preparedness Improving risk management and preparedness – e.g. better
agrometeorological warning systems, drought contingency plans,
response to flooding, awareness-raising, weather-indexed risk insurance.

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 © IFAD/Petterik Wiggers

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 Maximizing IFAD’s impact on rural
poverty in a changing climate

Strategy goal, purpose and output described above, climate change is a

Climate change is a cross-cutting thematic theme that runs through all IFAD does, thus
issue that is changing the physical, political it cannot be addressed through a
and financial context of IFAD operations. disconnected set of activities. Climate
The Fund’s existing mandate and change cannot be an add-on, and is not
comparative advantage in working with seen as a separate sector or optional extra.
smallholders oblige us to respond to The approach of this strategy is to help
climate change in parallel with, and in ensure that climate change – alongside
addition to, a range of other development other risks and themes – is systematically
challenges. IFAD is doing a lot already, integrated into IFAD’s core programmes,
but it can do more. Thus the goal of the policies and activities.
IFAD Climate Change Strategy is to
maximize IFAD’s impact on rural poverty IFAD cannot, and should not, work alone on

3
in a changing climate. the climate change aspects of rural
development. The depth and breadth of
Figure 1 sets out the goal and three climate threats means that all major
statements of purpose. The main output for international organizations are considering
this strategy is a ‘climate-smart’ IFAD. As how they can help. This implies a wide
range of partnerships for IFAD: national
governments, the United Nations family

FIGURE 1 Strategy goal and purpose

GOAL
To maximise IFAD’s impact on rural poverty in a changing climate

PURPOSE 1 PURPOSE 3
To support innovative To inform a more
PURPOSE 2
approaches to helping coherent dialogue on
smallholder farmers build To help smallholder climate change, rual
their resilience farmers take advantage development agriculture
to climate change of available and food security
mitigation incentives
and funding

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(including the UNFCCC), the Global Operations
Environment Facility (GEF), the donor
community, other IFIs, international civil IFAD will build the capacity of our country
society and the private sector (in particular, programmes to more systematically
farmers and rural producers’ organizations). respond to increasing demands from our
IFAD’s choice of partnerships will be based clients for help and innovation on climate
on what makes the biggest difference for change. This means enabling climate
our clients – they are described in sections change as part of our toolkit for the early
A through D. stages of country programme and project
design, rather than as an overly
A climate-smart IFAD means that climate compliance-driven approach in the final
change is appropriately reflected in our approval stages for country strategic
approaches to: operations; knowledge, opportunities programmes (COSOPs) and
innovation and advocacy; resource programmes/projects. In terms of overall
mobilization; and organization. direction, IFAD’s next strategic framework
will see climate, environment and
sustainable natural resource management
fully integrated into analysis and objectives.

FIGURE 2 IFAD climate partnerships

KNOWLEDGE,
INNOVATION AND
© IFAD/David Rose

ADVOCACY
• UN family
• Farmers’ organizations,
indigenous peoples
groups, international civil
COUNTRY LEVEL
society
• National stakeholders,
• Research centres and
including central
think tanks
governments, local
• Donor community
institutions, community-
(i.e. GDPRD)
based organizations RESOURCE
• IFIs
• Harmonization with MOBILIZATION
donor community • Global Environment
(bilateral and multilateral) Facility, including GEF
Trust Fund and GEF-
managed UNFCCC funds
• Adaptation Fund
• Private sector and
foundations
• Donors and IFIs

19
 We will use key partnerships on the ground, How will IFAD achieve this?
such as community-based, farmers’ and • Enhanced stock-taking of current,
women’s organizations, NGOs, and national relevant NRM work in country and
and local public institutions, including regional programmes, which can provide
agriculture ministries. Our aim will be to lessons and be expanded and scaled up;
empower local communities and their • Greater capacity for systematic and
institutions to participate in climate-change- enhanced participation of relevant
related decision-making processes, and to climate and environment expertise in
build their capacity to respond using their country programme management teams
own and others’ experience. Based on its and missions;
growing in-country presence, IFAD will also • Deeper integration of climate analysis
engage where appropriate in country-level into environment and social assessment
climate and environment coordination (ESA) tools – i.e. expand the scope of
efforts, working closely with bilateral and analysis to more fully include climate
multilateral donors, and taking advantage change questions. This process will feed
where appropriate of the capacity of into any potential enhancements of ESA
partner organizations. procedures in our ENRM policy;
• Factoring emerging knowledge on
Country strategies climate change into COSOP mid-term
COSOPs are increasingly reflecting new reviews; and
thinking about how climate change is • Inclusion of climate-change threats and
altering the development context for IFAD’s opportunities in subsequent revisions to
partners. But we can go further in ensuring the guidelines for results-based COSOP
that expertise is available to do this (RB-COSOP) formulation.
systematically.
Project design and implementation
Potential questions to be addressed in Similarly, climate change is featuring
COSOP design are: (i) what are the latest increasingly in the purpose and risk
available estimates of climate impacts on analyses of new projects. Again, there is
poor rural people – particularly on IFAD’s an opportunity to provide more support
partner communities – using disaggregated so that this is done systematically and
impacts (e.g. sex-disaggregated impact makes the best use of available knowledge
data if available); (ii) how could national and expertise.
poverty and climate change plans guide the
choice of investments; (iii) are there any Our priority will be to ensure that project
overall estimates on climate-related risk to identification, design (including quality
the existing and planned portfolio; (iv) are assurance), and implementation are based
there any areas for potential IFAD support on an understanding of climate change in a
that could generate rewards for the local context, how it affects different
mitigation actions of smallholders; (v) what categories of poor rural people, and women
has been IFAD’s past experience, as compared with men. Rather than special
comparative advantage and value-added on treatment for climate change, this requires
climate-related work in the country and including it alongside other relevant project
what is its potential for scaling up; and (vi) risks and opportunities, particularly those
what climate-related activities could be
incorporated into IFAD-supported projects
and policy advice.

20
related to environmental threats. This may • Appropriate integration of climate-related
require engaging with communities to issues in project monitoring and
assess specific climate-related risks to evaluation and knowledge management
communities and to project success (and systems, mid-term reviews, and
their financial implications); and then supervision and project status reports.
working with them to identify and analyse These procedures will be facilitated by
alternative project designs or approaches to inclusion of such elements where
reduce or eliminate these risks. A wide appropriate in the original project design.
variety of new tools and approaches are
available to help in this assessment. IFAD
grants can support innovations and Knowledge, innovation
capacity-building activities in this regard. and advocacy

How will IFAD achieve this? Sharing of knowledge and innovation is part
• Increase staff knowledge of and of IFAD’s core business. In line with the
sensitivity to the role of climate change IFAD Strategy for Knowledge Management,
issues in IFAD’s mission, and their lessons and innovations from the field will
knowledge of experiences in, and be shared across the organization and
practical tools for, building climate externally. Individual country experiences
change into country and regional must be mainstreamed and scaled up to
programmes and projects; ensure their application throughout IFAD’s
• Again, systematic and enhanced programmes and to draw on learning from
participation of climate and environment IFAD’s research grant portfolio. There is still
expertise in country-level dialogue a need to profit from the knowledge and
through country programme experiences of others, including indigenous
management teams and missions; knowledge systems and international
• New tools – a climate risk tool for research centres – which will require
screening COSOPs and projects is innovations in IFAD’s knowledge
under development, as well as management and partnership approaches.
enhanced attention to climate change
in ESA; IFAD will continue to raise the profile of
• Sharing knowledge internally on how smallholder agriculture in international policy
climate change risks and opportunities discussions on climate change, and vice
can be integrated into project design – versa, to increase the attention of
for example there may be more agriculture discussions to climate change.
opportunities to factor climate change This communication and engagement effort
issues (climate risks, impacts of response is tightly focused, given the staff capacity
measures, technical and economic needed to manage IFAD’s operational task
mitigation potential of agricultural on the ground. Working with the Global
activities) into social, technical, Donor Platform for Rural Development
economic and financial analysis; (GDPRD), the Food and Agriculture
• Implement the quality enhancement (QE) Organization of the United Nations (FAO),
process: projects are assessed in the farmers’ organizations and others, IFAD
context of a number of key success
factors (KSFs), which include a question
on the vulnerability to climatic shocks of
poor rural people whose livelihoods
depend on agriculture and NRM;

21
 made progress in 2009 in encouraging • Preparation of thematic guidebooks,
greater recognition of agriculture in climate learning notes, case studies, climate-
negotiations – draft negotiation texts now change-related country profiles and
feature greater attention to agriculture regional climate change outlooks, as a
and to the possibility of a future technical way to inform country programmes;
work programme. Various IFAD co-hosted • Continued use of country and global
side-events at UNFCCC negotiation research grants to support the
meetings and communication efforts in generation and development of
2009 engaged climate negotiators and appropriate technologies that build on
the public in a consideration of what local knowledge systems and blend
concrete measures in negotiations are them with the best available formal
most important to smallholders. science options;
• Continued lesson-learning from
Key deliverables will include: evaluations of IFAD’s climate- and
• New arrangements for outsourcing environment-related work.
expertise: exploration of new resource
centre arrangement(s) with reputable Key knowledge, innovation and advocacy
organizations or consortia to provide partnerships:
expert advice, where needed, in the • Farmers’ organizations, indigenous
development of programmes and staff peoples and international civil society.
training (for example, partnership with Rural producers’ organizations and civil
the World Bank’s BioCarbon Fund – society organizations are important
paragraph 36); partners, particularly for advocacy in the
• Support to regional divisions and climate change arena. Building on
technical focal points of IFAD by the new ongoing relationships with organizations
Environment and Climate Division for such as the World Wide Fund for Nature
establishing an internal climate and (WWF), International Institute for
environment network to share knowledge Environment and Development (IIED),
and coordinate IFAD’s efforts; United Nations Permanent Forum on
• Systematic knowledge-sharing and Indigenous Issues (UNPFII) and
learning on climate change within the producers’ organizations involved in the
country programmes, particularly with Farmers’ Forum, IFAD will increase its
regard to experiences from the field, collaboration with relevant groups to
and adequate training for staff; raise the voice and emphasize the
concerns of smallholder farmers.
• United Nations family and Rome-based
agencies. IFAD will continue to engage
in concerted efforts with other United
Nations agencies:
(i) Through collaboration by the three
Rome-based agencies, which will
continue to be a priority, as identified
at the Rome heads of agencies
meeting in September 2009.13 IFAD
already works closely with FAO on
13 IFAD, “Directions for
collaboration among the the technical aspects of mitigation
Rome-based agencies”,
(e.g. testing FAO’s Ex-ante Appraisal
note document prepared for
review by the ninety-seventh Carbon-balance Tool [EX-ACT]) and
session of the Executive
Board, 14-15 September
general advocacy work, and with the
2009. World Food Programme (WFP) on a

22
 weather risk insurance programme in • The Consultative Group on International
China. In addition, the Rome-based Agricultural Research (CGIAR) is one of
agencies have started a collaborative IFAD’s main research partners. The
partnership on disaster risk recently launched 10-year Challenge
management. It aims to integrate Programme on Climate Change,
such management into rural Agriculture and Food Security offers new
development and agriculture sector opportunities to engage with the CGIAR
planning, including a range of rural on climate change research. IFAD will
financial services and products for also link its works to other emerging
risk prevention measures. IFAD will initiatives relevant to its target group,
continue to deepen these such as the Global Research Alliance on
collaborative efforts, making more agricultural greenhouse gases.
use of FAO’s analytical capacity and • International financial institutions: IFAD,
– given the impact of climate change as both an IFI and a United Nations
on disasters and vulnerability – with specialized agency, will increase its
WFP on disaster preparedness, relief engagement and knowledge-sharing
and early recovery work. IFAD will with other IFIs. It is already an active
also continue to work with the Global member of the Multilateral Financial
Mechanism of the United Nations Institutions Working Group on
Convention to Combat Desertification Environment that has made significant
(UNCCD) in strengthening the ability progress towards harmonizing the
of countries to respond to the threat approach MFIs take to environmental
of desertification; issues, particularly in relation to
(ii) Through the climate change working environmental impact assessment. IFAD
group of the Chief Executives Board will also engage with and learn from the
High-level Committee on experience of the Climate Investment
Programmes, in support of the Funds, in particular the Pilot Programme
UNFCCC process, as well as in the for Climate Resilience and the Forest
delivery of common products;14 Investment Program.
(iii) Through our work with the UNFCCC • Donor community: membership in the
secretariat, particularly on technical GDPRD offers a space for coordinated
matters related to adaptation and action on climate change within the
mitigation in agriculture and on donor community. Building on its current
initiatives such as the Nairobi Work and ongoing engagement with the 14 In 2009 the United
Programme on impacts, vulnerability platform, IFAD will continue to take part Nations system engaged in
a number of joint initiatives
and adaptation to climate change.15 in the development of a coherent and tools, such as the joint
IFAD’s main objective will be to approach among donors to agricultural paper on adaptation
presented at COP15 and
increase attention to the needs and mitigation and adaptation. the UNCCD: Learn platform,
concerns of smallholder farmers in to which IFAD contributed
through its internal climate
the post-Kyoto global climate change training (i.e. the
CLIMTRAIN project).
agreement, and to continue
15 IFAD joined the
supporting implementation of the UNFCCC Nairobi Work
Convention by delivering Programme on impacts,
vulnerability and adaptation
programmes identified in national to climate change in
adaptation programmes of action. October 2007. The aim of
this programme is to help
countries improve their
understanding and
assessment of the impacts
of climate change and to
make informed decisions on
practical adaptation actions
and measures.

23
 Resource mobilization management. Through the GEF
partnership, IFAD has deepened its
Climate change is increasing the cost of engagement and cooperation with the
development, and the international other GEF agencies.16 Of relevance to
response has added a layer of complexity IFAD, the GEF manages the GEF Trust
to the provision of international public Fund, the Least Developed Countries
finance to developing countries. Climate Fund (LDCF) and the Special Climate
change is already becoming a more Change Fund (SCCF). IFAD’s GEF
prominent driver of the provision of portfolio is approximately US$100
international financial support, and million, with cofinancing of approximately
significant spending commitments were US$370 million from IFAD-supported
made as part of the Copenhagen Accord projects. IFAD will continue to work with
(see paragraph 11). As climate negotiations the GEF through the
evolve, IFAD will continue to explore how (i) GEF-5 Trust Fund: IFAD aims to
we can enhance our role, together with significantly increase our use of GEF
other agencies, in the deployment of resources in the next GEF
greater financial assistance, calibrated replenishment for the period 2010-
according to our ability to deliver and 2014. Success will in part depend on
aligned with our core programmes and the size of the next replenishment,
mandate. It is already clear that climate and on ongoing project cycle reforms
change adaptation will be an important and programmatic approaches. IFAD
element of future climate change finance, is active in four of the six GEF focal
which fits well with IFAD’s core mandate. areas: land degradation, biodiversity,
international waters and climate
Based on this strategy’s principle of change. A stable or increasing GEF
integrating climate change throughout IFAD, replenishment would present an
our primary focus is on making IFAD’s opportunity for IFAD to continue
expanding portfolio climate-smart. increasing its still-small share of
Supplementary funds will be used to help the GEF portfolio (2.9 per cent for
deepen integration of climate change into GEF-4). The GEF’s ongoing efforts to
our core programmes. These funds will streamline the project cycle would
meet the additional costs of climate-smart facilitate integration of GEF financing
project investments and technical into our overall portfolio. These
assistance, and enable more innovative resources would continue to be used
approaches to address climate threats to mobilize IFAD investments based
and opportunities. on our GEF-4 mobilization ratio of 1:4.
16 African Development (ii) UNFCCC’s GEF-managed LDCF
Bank (AfDB), Asian
Development Bank (AsDB), Key resource mobilization partnerships: and SCCF: depending on the
European Bank for • Global Environment Facility: as the replenishment of these two funds,
Reconstruction and
Development (EBRD), financial mechanism of the UNFCCC, over the next four years IFAD will
FAO, Inter-American
the GEF represents a major strategic aim to significantly increase its
Development Bank (IDB),
the World Bank, United partner, going beyond resource LDCF/SCCF pipeline with innovative
Nations Development
Programme (UNDP), United
mobilization and including knowledge projects that help rural communities
Nations Environment address the additional costs of
Programme (UNEP), and
United Nations Industrial climate change to their development
Development Organization efforts.
(UNIDO).
• Adaptation Fund:17 IFAD is submitting
17 The Adaptation Fund
was established by the an application to serve as a multilateral
Parties to the Kyoto
Protocol of the UNFCCC
implementing entity of the Adaptation
and is hosted by the GEF. Fund, which will finance concrete

24
 adaptation projects and programmes in Organization
developing countries that are parties to
the Kyoto Protocol. The details of IFAD has always been perceived as and
access and Adaptation Fund priorities prides itself on being a ‘front-line’
are being finalized. Resources available international agency that focuses its efforts
will depend on developments in the at project and country programme levels
carbon market. with an emphasis on direct results.
• Corporate private sector and Accordingly, transforming the above three
foundations: the private sector will statements of purpose into tangible results
ultimately drive the investment response for poor rural people will involve
to climate change. IFAD will explore strengthening IFAD’s ability to assess
further possible collaboration with relevant climate risks, identify mitigation and
private foundations, building on its adaptation opportunities, and implement
successful partnership with the Bill and and monitor effectively and efficiently.
Melinda Gates Foundation for weather
insurance in China. Success at the country level will require
• Rewards for emissions reductions: IFAD effort across the organization – including
will develop its partnership with the the President, regional divisions and country
BioCarbon Fund, administered by the offices, the Communications Division, and
World Bank, in its third agriculture- facilities management. In order to support
related tranche (to be committed by regional divisions and Senior Management
2012) to demonstrate projects that in realizing the Fund’s implementation and
successfully sequester or conserve advocacy goals, IFAD must reinforce its
carbon in forests and agroecosystems. capacity. This will be achieved with a
Where appropriate, IFAD will take modest internal staff increase, together with
advantage of the BioCarbon Fund training, new arrangements for accessing
team’s carbon market expertise to external expertise, and deeper partnerships
assess potential income-generating on climate change.
emissions-reduction activities, and will
seek its potential investment. Key elements of IFAD’s organizational
• Donors and IFIs: IFAD remains open to response are
bilateral financing partnerships to • Making greater use of existing in-house
expand our climate and environment skills and people through (i) identifying
integration and support18 – including the dedicated in-house capacity to deliver
financing of stepped up analytical high-quality programmes and (ii) staff
support to IFAD’s clients and training. Building on the experience of
development of climate-smart COSOPs the CLIMTRAIN project,19 IFAD will
and programmes. IFAD will encourage a design and make available to its staff an
harmonized approach to the provision of e-learning training programme on
such cofinancing support (such as climate change and rural development;
common reporting and memorandums
of understanding). IFAD will also
continue to explore engagement with the
European Commission’s Global Climate
Change Alliance and the World Bank- 18 As in the case of
administered Climate Investment Funds. Ethiopia, where Spain is
supporting additional
activities for adaptation to
climate change in a joint
IFAD/GEF project.
19 www.ifad.org/climate/
climtrain/.

25
 • Creating a new organizational structure minimize the impact of its operations on
with increased dedicated expertise on the environment and to lower its own
climate and the environment: a new carbon imprint. The restructuring of the
Environment and Climate Division (ECD) new IFAD headquarters was based on a
– housed in the Programme green-building, sustainable design – and
Management Department (PMD) – will IFAD is currently seeking Leadership in
share operational staff with the regional Energy and Environmental Design
divisions in pursuing a common agenda certification, which will recognize the
of climate and environment integration building’s high performance with respect
throughout IFAD. It will also bring to water savings, energy efficiency,
together staff working on climate and material selection and indoor air quality.
the environment to enable (i) continued A voluntary IFAD Go Green Group is
development of the GEF pipeline; actively involved in creating awareness
(ii) more support to the regional divisions in-house of environment-friendly
on COSOPs and non-GEF programme behaviour. Two working groups are
development; (iii) innovation and focusing respectively on policies in our
knowledge management on the field operations and on a carbon-neutral
environment and climate change; and imprint for the Fund’s facilities. IFAD is
(iv) managing external partnerships and revising its travel policy: specific
global initiatives on climate and the provisions will be made in relation to
environment; carbon emissions, and elements of
• New arrangements for outsourcing emissions mitigation will be part of the
expertise; new travel manual.
• Demonstrating the values of
environmental awareness internally. IFAD
is committed to playing a proactive role
in the United Nations carbon neutral
initiative. It is actively doing its share to

26
 © IFAD/Susan Beccio

27
 Measuring success

A results and implementation framework for implementation. Given IFAD’s country-driven

the IFAD Climate Change Strategy is approach, and the cross-cutting nature of
presented in annex I. In line with the overall climate change, specific sectoral indicators
approach of the strategy, the framework are not used as an indicator of success.
seeks to embed climate-related issues IFAD’s ENRM policy will elaborate on results
appropriately across IFAD’s results-based measurement in the context of IFAD’s
measurement system. As a theme that runs NRM activities.
throughout our work, the success of the
strategy will be assessed through a number
of proxy measurements largely related to
portfolio performance and activity

28
 © IFAD/Nancy McGirr

29
 Annex I

IFAD Climate Change Strategy results

and implementation framework

Goal: To maximize IFAD’s impact on rural poverty in a changing climate.

Statements of purpose:
• To support innovative approaches to helping smallholder producers build their resilience
to climate change.
• To help smallholder farmers take advantage of available mitigation incentives and funding.
• To inform a more coherent dialogue on climate change, rural development, agriculture
and food security.

Output: a climate-smart IFAD

Strategic themes Strategy objectives Outcome indicators Implementation milestones

1. Climate-smart COSOPs and • From end-2010 all new COSOPs IFAD’s next strategic December
operations programmes submitted to the Executive Board framework will see climate, 2010
systematically and new programme documents environment and sustainable
reflect climate and systematically and appropriately natural resource management
environment risks reflect climate and environment fully integrated into its
and opportunities risks and opportunities analysis and objectives
• Project completion reports: RB-COSOP formulation By December
increased percentage of projects and quality enhancement 2010
rated 4 or more for environment guidelines updated to include
over baseline of 77 per cent climate change issues
(2008-2009 two-year average) for Enhanced ESA climate By end-2010
2013-2014 cohort change inputs piloted
• Results and impact management (including risk-screening tool
system: by 2014, average rating of the IFAD Initiative for
increased to 4.25 in 2nd-level Mainstreaming Innovation)
indicators (effectiveness/ Climate-change expertise Ongoing
sustainability) for natural resource participation enhanced in
interventions over baseline of country programme
3.75 for 2009 management teams and
• Increased satisfactory ratings missions
under the natural resources and Climate-change sensitivity Ongoing
environment domain for projects of design regularly tracked
evaluated in the ARRI report at QE
• QE panel report overall
assessment highlights climate
change concerns, QE panel
summary assessment sheets
record KSF rating for climate-
change-related questions

30
Strategic themes Strategy objectives Outcome indicators Implementation milestones
2. Climate-smart Enhanced internal • Agricultural issues, and Continued IFAD engagement in Ongoing
knowledge, and external needs and concerns of poor support of global climate and
innovation and climate-related rural people, appropriately agriculture dialogue
advocacy knowledge reflected in final post-Kyoto New knowledge service By mid-2011
management, in agreement arrangement(s) with reputable
parallel with • Reform of the Clean organizations or consortia to
continued global Development Mechanism provide expert advice and staff
and national (CDM) to allow greater training
advocacy inclusion of agriculture Enhanced collaboration with Ongoing
• Frequency of IFAD climate- United Nations family and Rome-
related events based agencies on climate change
• Implementation of actions IFAD internal climate and June 2010
on climate change of environment network established
“Directions for collaboration to ensure that knowledge is shared
among the Rome-based Knowledge/training products Ongoing
agencies” and events rolled out –
• Frequency of climate-related including CLIMTRAIN web-based
IFAD media interviews and training package
publications Inclusion of climate change in Ongoing
grant programmes
Engagement to support coherent Ongoing
donor approach to climate
change through GDPRD
Continued engagement to Ongoing
support global climate and
agriculture dialogue
3. Climate-smart Additional • At least 25 per cent increase Increased GEF-5 grant financing From
resource supplementary in GEF-5 Trust Fund cofinancing secured to support IFAD June 2010 to
mobilization funding secured to of IFAD operations over operations related to climate June 2014
assist in systematic the next GEF replenishment change and the environment
integration of period 2010-2014 Increased UNFCCC LDCF/SCCF From
climate risks and • At least 40 per cent increase grant financing secured to June 2010 to
opportunities into in combined LDCF and support IFAD operations in next June 2014
overall portfolio SCCF cofinancing of IFAD LDCR/SCCF replenishments
operations over the next IFAD access to the Adaptation From
GEF replenishment period Fund established, with five-year mid-2010
2010-2014 engagement plan prepared
• Pending the outcome of and implemented
CDM reform, at least two BioCarbon Fund – rewards 2011
further IFAD projects for emissions-reduction projects
cofinanced with BioCarbon piloted
Fund by end-2011
4. Climate-smart Appropriate • Five additional climate and ECD created, capacity increased By March
internal resource levels and environment experts recruited and staff shared with regions 2010
organization internal procedures to IFAD by June 2011 IFAD certified as leader in Energy By June 2010
• Shared (ECD and regional and Environmental Design
divisions) regional environment IFAD travel manual updated to 2011
and climate specialists in at include specific provisions to
least three regional divisions by reduce carbon emissions imprint
June 2011

31
 Annex II

IFAD/GEF portfolio: Building on a strong foundation

A strategic partnership
IFAD and the GEF work together to support countries in addressing the intertwined issues
of poverty alleviation, environmental degradation and climate change, with a focus on rural
development needs.

As the only United Nations agency dedicated exclusively to fighting rural poverty, IFAD
brings to this partnership its extensive experience in sustainable rural development and
integrated environmental management, as well as its strengths in identifying synergies and
addressing cross-cutting environmental issues.

This alliance with the GEF enables IFAD to enhance its contribution to sustainable NRM,
and to fight climate change and its consequences, while improving the living conditions of
poor rural people.

The IFAD/GEF partnership capitalizes on the linkages between GEF strategic objectives and
IFAD programmes and projects, making them mutually reinforcing. As a GEF agency, IFAD
can access funds under the GEF Trust Fund. It is also able to access climate change funds
under the UNFCCC’s Least Developed Countries Fund (LDCF) and Special Climate Change
Fund (SCCF), managed by the GEF secretariat.

IFAD and the GEF: Meeting environmental and rural development challenges
in a rapidly changing world
IFAD became a GEF agency in 2001 and created a dedicated unit in 2004, housed in its
Programme Management Department. During these five years of collaboration, IFAD has

FIGURE 1 IFAD portfolio by region

(Total financing in millions of United States dollars)

GEF Portfolio and co-financing distribution by region

250
Other Financing
IFAD Financing
200
GEF Financing
65,682
150
US$ Millions

100 58,076 103,787

32,894 29,255
50 38,378
32,018 39,183
29,515 40,72
21,81 19,443
0
Near East and Sub-saharan Africa Asia (6 grants) Latin America and
North Africa (8 grants) (11 grants) Caribbean (5 grants)

32
secured a total grant portfolio of 30 projects under its direct responsibility, totalling
US$111.4 million from the GEF, directly linked to US$399 million in investments
(US$213.3 million from IFAD investments and US$185.9 million of cofinancing from other
partners – figure 1). This cost-effective participation and its successful mobilization rate are
complemented by the quality control mechanisms and rigorous fiduciary procedures and
standards applied by IFAD.

Since its establishment, IFAD has worked intensively in marginal lands, degraded
ecosystems and post-conflict situations, with an emphasis on the people living in these
conditions. Consistent with this approach, nearly 40 per cent of IFAD/GEF grants are
invested in sub-Saharan Africa, complementing other IFAD operations for agriculture and
rural development in the region. The remaining 60 per cent are dedicated to the poorest
areas of Latin America and the Caribbean, Asia and the Pacific and the Near East and
North Africa (figure 1).

Most IFAD/GEF programmes are implemented in collaboration with other GEF agencies,
either as part of programmatic approaches or country programmes (led by the United
Nations Development Programme [UNDP] or the World Bank), or in association with other
agencies (African Development Bank [AfDB], the United Nations Environment Programme
[UNEP] and the United Nations Industrial Development Organization [UNIDO]).

IFAD’s comparative advantage for the GEF lies in its work in integrated management of land
and water and the sustainable use of biodiversity and forests – while simultaneously seeking
to lessen the impact of climate change on vulnerable rural communities and promote their
capacity to cope with changing climatic conditions. Approximately three fourths of the
IFAD/GEF portfolio supports sustainable natural resource and forest management practices,
while the remaining fourth is dedicated to climate change activities (figure 2).

Combating land degradation

IFAD was created in response to the droughts and food crisis that affected millions of people
in Africa and Asia in the early 1970s. It offers a major and unique comparative advantage in
supporting sustainable land management. With a strong track record in tackling land
degradation and promoting sustainable rural development and integrated land management,

FIGURE 2 Distribution of IFAD/GEF grants by focal area

(Millions of United States dollars)

2%
23%

18%
57%

Climate change Biodiversity Land degradation International waters

33
 IFAD plays a critical role in implementing the UNCCD and has full access to GEF funds
targeting land degradation. IFAD's focus on reducing rural poverty and fostering household
food security, its people-oriented participatory approaches, and its extensive experience in
drylands ensure that its programmes will deliver maximum results on the ground.

IFAD is the lead agency in the GEF programme of MENARID [Integrated Natural Resources
Management in the Middle East and North Africa Region Programme] (with GEF total
funding of nearly US$60 million), designed to promote such land management while
increasing the economic and social well-being of targeted communities through the
restoration and maintenance of ecosystems.

IFAD is also a major player in the GEF’s Strategic Investment Program (SIP) for sub-Saharan
Africa, which responds to the region’s urgent need to address land degradation and
sustainably improve natural-resource-based livelihoods. IFAD has mobilized US$100 million
(20 per cent from GEF grants) to promote sustainable land management in six countries.

Promoting sustainable forest management and biodiversity use

One of IFAD’s priorities is the efficient use of natural resources, enabling poor rural people to
benefit from these assets, while conserving and managing them sustainably. IFAD has
proven experience in promoting biodiversity conservation and water management through
participatory management mechanisms, including protected areas and buffer zones.
Roughly 40 per cent of IFAD/GEF projects include financing from the GEF biodiversity and
international waters focal areas.

Forest conservation and sustainable use, with a strong pro-poor approach, play a primary
role in IFAD strategy, due to their importance to and interlinkages with poor communities
and indigenous peoples. The IFAD Strategic Framework 2007 2010 recognizes the
importance of managing forests sustainably to reduce land degradation, while
simultaneously improving food security and providing alternative income sources for
communities and small-scale farmers. In this regard, IFAD is actively supporting the GEF’s
sustainable forest management strategy through five projects.
Fighting climate change

Under the GEF-4 replenishment, IFAD committed itself to prioritizing climate change as it
relates to rural poverty reduction, with a particular focus on adaptation. Under the GEF Trust
Fund, IFAD is supporting climate change adaptation as a cross-cutting issue within other
focal areas, particularly sustainable land management, within programmes such as
MENARID20 and SIP. Also, under the Special Pilot on Adaptation, IFAD is implementing a
community-based project to rehabilitate three key coastal ecosystems – mangroves, coastal
lagoons and sand dunes – along the tsunami-devastated east coast of Sri Lanka. The
project enhances their resilience to climate variability, while reducing the population’s
vulnerability to climate change.

In addition, IFAD is currently working with the governments of Mauritania, Senegal and
Sierra Leone to support implementation, through the LDCF, of the priorities of their
agriculture-related national adaptation programmes of action. With funding from the SCCF,
IFAD is supporting Jordan, Mongolia and Pakistan in implementing adaptation activities,
including technology transfer, in the livestock, water and crop production sectors.

In 2009, IFAD also began development of its climate change mitigation portfolio under the
GEF Trust Fund. The three projects currently being prepared in Mexico, The Sudan and the
20 Reducing Risks to the Bolivarian Republic of Venezuela focus on promoting a climate-friendly rural development
Sustainable Management of
path by increasing the carbon sequestration potential of land use, land-use change and
the North-Western Sahara
Aquifer System (NWSAS). forestry activities in these countries.

34
Enhancing collaboration under the fifth GEF replenishment
The financial crisis and rising food insecurity are intertwined global challenges for poor rural
people. Food price volatility in 2008 and the economic crisis in 2009 have resulted in
increased hunger. According to FAO, there were more than one billion people
undernourished in 2009, and food prices are on the rise again. Population growth – and
migration caused by poverty, climate change and natural resource degradation – will further
complicate the intertwined global crises. Poor rural people and smallholder farmers are the
most vulnerable to the combined action of these global crises, as they lack adequate
coping capacity.

Environmental degradation (mismanagement of forest, water and soil resources) is

aggravating the world food crisis, as resources become scarcer and of poorer quality,
affecting livelihoods, health and living conditions. Climate change – altering weather
patterns, melting glaciers and inducing more extreme events (droughts, storms, etc.) – will
further exacerbate these tensions.

Immediate action is needed to strengthen the resilience of agriculture to the challenges of

climate change and natural resource degradation, while sustainably improving the
productivity of agriculture in the face of growing demand for food.

The GEF partnership helps IFAD better integrate climate change and NRM into its core
mandate, while continuing to work with poor rural people to improve their living conditions.
Collaboration with the GEF secretariat and other GEF partners also allows IFAD to improve
and increase its efforts to reduce rural poverty through an appropriate blending of
operations. Similarly, integration of its efforts with the GEF enables IFAD to carry out more-
innovative and higher-risk approaches to addressing climate threats and opportunities.

Given the importance of the GEF in addressing global environmental issues, and its
important contribution to the achievement of IFAD objectives, the Fund fully supports a
significant and strong replenishment of GEF resources, as well as those of the other two
GEF-managed funds, the LDCF and SCCF.

IFAD also welcomes, and supports, the process of GEF reforms that will help make the GEF
more efficient, transparent and country-driven. One of the proposed reform measures, the
improvement of the GEF project cycle, will enable IFAD to deliver better results, while
continuing to leverage major IFAD cofinancing towards GEF-supported programmes.

Under GEF-5, IFAD would like to continue its collaboration with the GEF partnership,
increasing the engagement according to its comparative advantages, consolidating planned
and ongoing programmes and activities, and proposing new initiatives that can incorporate
new country partners and mobilize major cofinancing.

35
International Fund for
Agricultural Development
Via Paolo di Dono, 44
00142 Rome, Italy
Tel.: +39 06 54591
Fax: +39 06 5043463
E-mail: ifad@ifad.org
www.ifad.org
www.ruralpovertyportal.org