Evaluation of Incremental Cost Calculation

Incremental cost (IC) is the GEF’s fundamental operational principle. The GEF funds the incremental or additional costs associated with transforming a project with national/local benefits into one with global environmental benefits. Both the process and calculation of IC are admittedly complex, and are difficult to quantify for all involved. Several evaluations conducted by the GEF Evaluation Office have identified IC as an issue that needs further clarification.

To this end, the Evaluation Office is conducting a short and focused evaluation in 2006 of how IC calculations have been undertaken in GEF projects and what can be learned from the application of the methodology so far. The evaluation will build on findings from existing program studies and will drawing on expertise on methodological issues from within and outside the GEF family. The finished evaluation will provide feedback to the GEF Council for future decisionmaking and to the GEF Secretariat, IAs, and project proponents as they work to clarify guidelines and make the IC process more transparent. The evaluation is managed by Senior Evaluation Officer Claudio R. Volonte and Evaluation Officer Lee Risby.

Evaluation Report, Nov 2, 2006

Approach Paper

Terms of Reference