Incremental Costs

GEF funds the "incremental" or additional costs associated with transforming a project with national benefits into one with global environmental benefits; for example, choosing solar energy technology over coal or diesel fuel meets the same national development goal (power generation), but is more costly. GEF grants cover the difference or "increment" between a less costly, more polluting option and a costlier, more environmentally friendly option.

The process of determining incremental costs can be complicated. In response to the GEF Council's request to "clarify and simplify" this concept, simplified guidelines for calculating incremental costs are being developed by the secretariat to accelerate this step in the project approval process.

Until the simplified guidelines are available, the following documents represent GEF efforts to develop and demonstrate the concept of incremental costs.

Incremental Cost Policy Paper

Other Council Documents

Other Recommended Documents