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PROJECT DEVELOPMENT FACILITY REQUEST FOR PDF BLOCK A FOR MSP UNDP PROJECT INITIATION DOCUMENT

AGENCY’S PROJECT ID: 3624 GEFSEC PROJECT ID: COUNTRY: Maldives COUNTRY ELIGIBILITY: Ratified UNFCCC: 9 November, 1992; Ratified CBD: 28 October, 1992 PROJECT TITLE: Implementing Tourism Adaptation to Climate Change in the Maldives (TACC-M) GEF AGENCY: UNDP OTHER EXECUTING AGENCY (IES): World Tourism Organization (WTO) DURATION: PDF A: 6 months; MSP: 4 years GEF FOCAL AREA (S): Climate Change GEF OPERATIONAL PROGRAM (S): GEF STRATEGIC PRIORITY(IES): Special Climate Change Fund (SCCF) ESTIMATED STARTING DATE: May 2006

FINANCING PLAN (US$) GEF PROJECT

PDF A 30,000Sub-Total GEF 30,000CO-FINANCING GEF Agency National Contribution In Cash In Kind 7,000Others Cash (WTO) 6,000In Kind (WTO & Experts) 12,000Sub-Total Co-financing: 25,000Total PDF Financing: 55,000

RECORD OF ENDORSEMENT ON BEHALF OF THE GOVERNMENT:

This proposal has been prepared in accordance with GEF policies and procedures and meets the standards of the GEF Project Review Criteria for PDF Block A approval. Andrew Hudson Officer-in-Charge UNDP-GEF

Contact Person: Bo Lim Principal Technical Adviser UNDP-GEF, New York

Date: March 28, 2006 Tel. (1-212) 906-5730 email: bo.lim@undp.org

Abdullahi Majeed Date: February 12, 2006 Deputy Minister Ministry of Environment, Energy & Water

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TABLE OF CONTENTS 1. Global Significance and Problem Statement 3 2. Baseline Situation 4 3. Project Linkage to National Priorities, Action Plans and Programmes 5 4. Stakeholders and Beneficiaries involved in Project 6 5. Potential GEF Relevant Benefits of the Project 7 6. Rationale for GEF Involvement 9 7. Expected Goal, Objectives, Outputs and Outcomes of Final Project 10 8. Description of Preparatory Inception Stage 14 8.1 Expected Outcomes & Completion of PDF A stage 14 8.2 Total Cost of PDF A 16 8.3 Summary of Activities, Timetable and Total Cost 16 9. Total Budget and Work Plan 17 10. Management Arrangements 18 11. Monitoring and Evaluation 18 12. Legal Context 19 13. Mandatory Annexes 20 Annex 1: TOR of Key Staff 20 Annex 2: Letter of Endorsement from GEF OFP 21 Annex 3: Information on Applicant Institute 22 Signature Page

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1. Global Significance and Problem Statement

Climate change and its various impacts pose a significant risk to the tourism sector, especially in developing countries where it is often the single most important industry. Climate change will affect the tourism sector through impacts on marine and terrestrial biodiversity and, consequently, on the livelihoods of local communities reliant on such resources. Globally, the tourism sector will have to adapt to climate change by incorporating measures that minimize adverse (or take advantage of beneficial) impacts. In the case of the Maldives, the tropical island environment and the marine biological diversity have proven to be unique marketable assets, in a country, which is essentially devoid of any other commercially exploitable resources. But as was evident by the devastation wrought by the recent Indian Ocean tsunami, the Maldives is also among the most vulnerable and least defensible countries in the world. This is mainly due to its low elevation and fragile ecosystems, smallness, remoteness, geographical dispersion, small human resource base, a highly limited internal market and an extremely sensitive and competitive external market. The economic base of the Maldives is very narrow, while the human resources of the country are not yet sufficiently developed to sustain a dynamic, knowledge-based economy. Moreover, the domestic market of the country is too small to stimulate economic growth. These factors have contributed to the growth of a narrowly diversified, highly dependent economy that is extremely delicate and vulnerable to external shocks. This weakness of the Maldivian economy is aggravated by the heavy dependence on just two main industries (fisheries and tourism) for the country’s fiscal revenues, foreign exchange earnings, employment and growth. Both these industries face strong international competition. External price fluctuations are common for fisheries products, exposing the economy to periodic contractions in earnings, as was the case in 2000. As recent international events have shown, the tourism sector is also vulnerable to a number of natural and manmade threats. For example, the combined cost (direct and indirect) to tourist resorts and loss of Government revenue from the tourism sector as a result of the Indian Ocean tsunami has been estimated to be in excess of US$300 million. The diversity of the reef ecosystems in the Maldives is amongst the richest in the world, a major reason why tourists visit the country. The reefs are also the seventh largest in the world, covering a total area of 8,920 square km and contributing 5% of the world's reef area. The coral reefs also show how tourism, when poorly managed, can impact considerably on the natural environment. Loss of biodiversity, both marine and terrestrial, is a very real threat in the Maldives and hence globally. The root cause is the increased demand on natural resources due to population expansion and rapid economic growth, both leading to over exploitation. Socio-economic forces and circumstances tend to create incentives for activities that cause pressure on biodiversity and generate disincentives for more sustainable behaviour. Coral reefs are not only economically important to the Maldives in terms of the ecosystem services they provide, as they also represent strategic natural offshore sea-defence acting to buffer shorelines from wave action and other oceanic forces. They are also important as habitat for bait and reef fish. The tourism sector created new demands for the reef resources, leading to the development of an organised reef fishery. By 1997 the reef fishery had expanded to the extent of overexploitation of certain species. Climate change projections for the Maldives, including those related to variability and extreme events indicate increasing likelihood of conditions detrimental to the tourism sector and, through cross-sectoral linkages, adverse impacts on the Maldivian economy. Climate change will affect the viability and profitability of the tourism sector and other dependent sectors, both directly and indirectly.

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The problem addressed by this project is therefore to, based on expected impacts as articulated in national communications and ongoing NAPA activities identify and implement practical, on-the-ground adaptation measures that will accelerate the process of reducing the vulnerability of the tourism sector in the Maldives to climate change. 2. Baseline Situation The Maldives is highly dependent on tourism as a source of foreign exchange, employment and contribution to GDP - in 2003 tourism accounted for 32.7% of GDP, arrivals numbered over 1/2 million and the sector employed more than 17,000, or over 56% of the working population. Since tourism began in 1972 the sector has grown rapidly. In 2003, 87 resorts provided 18,447 beds. As part of the Tourism Master Plan, the Government has authorised an additional 1600 beds in 11 designated islands, with emphasis on environmental protection and preservation. The tourism sector provides employment and other opportunities in sectors such as transport, communication, agriculture, distribution and construction and also in the more dispersed local economies. The current success of tourism in the Maldives is the combined result of a clear vision and public-private partnership. The Government and the industry have agreed that the main tourism assets are the marine environment and a consistent view between Government and the private sector as to how tourism should develop in the Maldives. In order to protect these valued tourism assets the Government set the industry very high standards, with tourism development guided by a consultative 10-year master plan process. The Government and industry together establish the rules of play. Comprehensive carrying capacity limits are enforced. All resorts are required to have environmentally sound incinerators and sewage treatment facilities. The resorts produce water for consumption through desalination technology, and in this way island groundwater is preserved. Mandatory environmental impact assessment and other regulations are used to ensure that tourism development has minimal impact on the natural environment. The Ministry of Tourism has specified several regulations and standards to ensure maximum protection of the environment of tourist islands. For example, coral from the reefs of Maldives cannot be used for any construction on a tourist resort, not more than 20% of an island may be cleared of bushes and vegetation for construction and for building purposes a minimum setback limit of 5m from the vegetation line of the island is required. With respect to marine conservation and management, nine marine species have now been prohibited for fishing or collecting and 15 marine products are prohibited for export. Due to unsustainable demand and exploitation, harvesting of berried lobsters and lobsters less than 25 cm in length is prohibited. In addition, 25 marine areas have been declared as protected dive sites. Lack of data on abundance and distribution of species has hindered sustainable management of marine resources. Monitoring mostly relies on export data which is a major setback to implementing timely regulatory measures. Other than pursuing good practices in the management of the environment and natural resources, the tourism sector in the Maldives is currently doing little to address the already substantial, and growing, risks to the sector from climate change. The main barriers are a lack of capacity, including awareness, knowledge, trained personnel and institutional support, and the inability to finance measures that reduce risks to anticipated climate change impacts. There is a need for urgent action to address these barriers. In the absence of this project, the Government, the private sector, and the communities that depend on tourism activities would not factor the impending risks of climate change, including climate variability, in their long term planning frameworks to ensure the sustainability of the tourism sector. The tourism sector is

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already experiencing damage to the environment and natural resources that are consistent with climate change. For example, an estimated 50% of all inhabited islands and 45% of tourist resorts currently suffer from beach erosion caused by variable climate effects. This is a serious situation given that more than 70% of the inhabited islands have buildings less than 30 m from the shoreline, while buildings are within 15 m of the shoreline on over 55% of the islands. Some 2% percent of the islands have buildings at the shore line. Other vulnerabilities due to climate change include salt water intrusion impacting on the availability of fresh water and on human health. A mixture of “soft” coastal protective measures as well as sector- and industry- specific adjustments in practices and planning frameworks are needed to enhance the longevity of both resort islands and tourism-dependent communities in the face of climate change. 3. Project Linkage to National Priorities, Action Plan and Programmes The Maldives has been actively participating in international meetings and conferences in search of such solutions. The Maldives is a signatory to the three Rio Conventions on Climate Change, Biodiversity and Desertification, and has also ratified the Kyoto Protocol. A National Implementation Strategy for Addressing Climate Change was adopted in 2001. The Maldives has submitted its First National Communication (FNC) to the UNFCCC and is soon to embark on preparing its Second National Communication (SNC). The present project will contribute to that process. The pursuit of added value to the key economic activities of tourism and fisheries is a priority of the 6th National Development Plan (NDP) for the Maldives. The NDP stresses diversifying the economy through facilitating the growth of new areas of economic activity. Both these strategies are in themselves proactive, no-regrets responses to climate and related risks. The immediate devastation and subsequent impacts suffered by the Maldives as a result of the Indian Ocean tsunami has added urgency to, and provides guidance for, implementing initiatives that enhance the resilience of the Maldivian economy to climate change, including variability. The Maldives' Second National Environment Action Plan (NEAP II) recognizes climate change, and associated sea-level rise, as a primary concern and has sustainable tourism development as a priority. The tourism sector is committed to sustainable tourism through responsible planning and management practices consistent with the conservation of the natural and cultural heritage of the Maldives, including promotion of ecotourism development, establishment and strengthening of marine protected areas and encouraging greater cooperation between the multiple stakeholders in the marine resources and environment sectors. The Ministry of Fisheries, Agriculture and Marine Resources has a policy to develop and manage the country's marine resources in a sustainable manner. The Integrated Climate Change Strategy for the Maldives provides shared design and implementation arrangements for the National Adaptation Programme of Action (NAPA), a National Capacity Self Assessment (NCSA), a Technology Needs Assessment (TNA) and preparation of the SNC to the UNFCCC. The current proposed project will be integrated into the National Climate Change Strategy, with the project objectives (e.g. capacity building, development and implementation of policies and plans, on the ground adaptation, awareness raising) contributing to the implementation of actions the NAPA, TNA and NCSA identify as priorities for the tourism sector. The proposed project is also consistent with the UNDP Country Programme for the Maldives (2003-2007) and with the National Biodiversity Strategy and Action Plan (NBSAP). It will also be coordinated with Atoll Ecosystem Project, currently being implemented in the Maldives, and provide key inputs to UNDP/GEF’s Adaptation Learning Mechanism project – see Section 6 for further details.

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4. Stakeholders and Beneficiaries involved in Project Implementing agency: United Nations Development Programme (UNDP) Executing agency: World Tourism Organization (WTO) WTO coordinates the preparation of country MSPs in three pilot countries (Fiji, Maldives and Seychelles) related to Implementing Tourism Adaptation to Climate Change (TACC). This will ensure during the project development and implementation a good linkage between Implementing Agencies (UNDP and UNEP) as well as achievement of the overall project objectives and exchange between the governments and experts involved. In the Maldives WTO will liaise directly with the focal point of the Ministry of Tourism and Civil Aviation, as its official counter part. WTO will also provide support through its technical expertise, manuals, guidelines and publications related to climate change, management of coastal zones and natural resources in tourism destinations. Execution arrangements for MSP implementation will be elaborated during the PDF-A stage, subject to consultations with key stakeholders, GEF implementing agency, and result of an assessment of institutional capacities for project implementation (to be carried under the PDF-A). Thus the PDF-A will identify institutional and technical capacity gaps and will design a capacity strengthening strategy to ensure a successful implementation of the project. Public sector agencies: Ministry of Tourism and Civil Aviation: Coordination of the country study in cooperation

with the Ministry of Environment, Energy and Water; liaison with tourism industry (public-private sector partnerships) and other key stakeholders (e.g. Maldives Association of Tourism Industry);

Ministry of Environment, Energy and Water: Partner in coordinating the country-project; integrating tourism into wider climate change and sustainable development policies, plans and activities;

Ministry of Fisheries, Agriculture and Marine Resources: Partner in ensuring that tourism contributes to responsible planning and management practices related to the country’s natural resources;

Department of Meteorology: Partner in preparing the climate risk profile; National Disaster Management Centre: Collaborate in preparing and applying a risk

management framework for tourism and climate change, building on experience from Indian Ocean tsunami etc;

The roles of the following key public sector stakeholders will be decided early in the consultation process: Ministry of Health; Maldives Water and Sanitation Authority Environment Research Centre; Marine Research Centre; Ministry of Atolls Development; Ministry of Planning and National Development; and Maldives Airports Company Limited.

As one of the outcomes of the PDF-A phase, an inter-ministerial, multi-stakeholder committee will be established in order to provide project coordination and guidance at the national level. The committee will involve focal points of key public, private and NGO institutions. The Ministry of Tourism and Civil Aviation of the Maldives will have the role of coordinating the inter-ministerial and multi-stakeholder committee. A stakeholder engagement plan will be developed during the PDF-A phase to ensure an effective public-private partnership for the project implementation, as well support from the NGO and academic sectors, from regional and international organizations.

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Private sector organizations: Maldives Association of Tourism Industry: Support initiatives through marketing activities,

for example relating to product diversification; provides linkage between public and private sector; provide co-financing or in-kind contribution to the project;

National Chamber of Commerce and Industry: Engage their members in the project and secure their active support and participation, assist in disseminating knowledge gained in this project; build capacity among members; identify other private co-funding sources.

Note: The private sector, such as tourist resort owners and operators, recognises the serious risks of climate change to their operations and to the communities and economies that depend on tourism in the Maldives. However, as the National Communications and the draft findings of the NAPA and the NCSA indicate, there is a lack of both relevant know how and capacity to undertake such activities. The proposed project, with the support of co-financing from the private sector, will address these and related barriers and, through sub-projects demonstrate the successful implementation of on-the-ground adaptation to climate change. Demonstration Project Partners: Relevant authorities, tourism businesses and tourism-dependent communities.

Other organizations: Economic and Social Commission for Asia and the Pacific: advising on implementation of

activities, including the workshop, and on dissemination and uptake of the findings of the country study;

South Asian Association for Regional Cooperation: advising on implementation of activities, including the workshop, and on dissemination and uptake of the findings of the country study;

South Asia Cooperative Environment Programme: advising on implementation of activities, including the workshop, and on dissemination and uptake of the findings of the country study;

Global Coral Reef Monitoring Network: Collaborate in the project; provide expertise, access to networks, assist in communicating results;

International Coral Reef Initiative: Collaborate in the project; provide expertise, access to networks, assist in communicating results.

Possible financial partners: Bilateral donor and development agencies, regional institutions, governments and private

sector organizations (to de defined during the PDF-A phase). 5. Potential GEF Relevant Benefits of the Project: Addressing the Priorities of the Special

Climate Change Fund (SCCF) 5.1 National and Community Development Tourism, if effectively planned and managed, can catalyse improved standards of infrastructure, health and education, food security, gender equality and social and economic wellbeing consistent with national development goals, improved management of natural resources and participation in policy making and planning. Above all, tourism can be an effective way to improve and sustain livelihood opportunities for island communities.

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The National Implementation Strategy for Addressing Climate Change has an emphasis on integrating responses to climate change into the national planning process. A key policy element is incorporating adaptive measures to climate change into national development planning, including identification of feasible economic activities for diversification in order to reduce dependency on tourism and product diversification in the tourism sector to reduce dependency on the marine environment. The latter is one focus of the proposed project. Tourism is making a vital contribution to one of two key principles included in the NDP to guide economic development, namely promoting regional development and establishment of growth centres in the Maldives. Development in the Maldives has tended to be spatially imbalanced due to the geographic and demographic peculiarities. Malé has emerged as the focal point of both economic activities and human settlement, and has been experiencing a high level of immigration from other islands of the country, contributing to congestion. In order to reduce the concentration of economic opportunities in Malé, and to ensure more broad based, equitable development, and regional development is an overarching theme in the NDP, including economic development, provision of health care services, education, infrastructure. Policies and strategies suggested for tourism, fisheries and other economic activities are also oriented towards promoting regional development by building on the existing economic, environmental and social competitive advantages in the newly designated regional growth centres. In an average tourist resort with 200 beds the investment is over US$ 13 million and is over US$ 43 million for a modern 700 bed resort. Loss, or even under-utilization, of such infrastructure due to climate variability and change will devastate the Maldivian economy. As noted in the FNC, product diversification by the tourism sector is thus an essential adaptation measure to reduce this dependency, and hence the level of risk to the overall economy, and to society. Concerted effort amongst the stakeholders will be required to find alternative tourism products to beaches and reefs. Options could include cultural attractions and adventure activities such as traditional sailing, as well as establishing convention centres to host international meetings and promote ecotourism, as proposed in the FNC. The FNC also identified promotion and uptake of insurance for resort investments, to ensure adequate cover by insurance policies for natural disasters and other extreme events. Adaptation initiatives that reduce climate-related risks to the tourism sector will need to be taken across the full spectrum of players, from the individual tourist and operator to governmental and inter-governmental organisations, and at diverse locations both within and outside the Maldives. 5.2 Building Capacity, Including Institutional Capacity The Maldives is committed to sustainable tourism, through responsible planning and management practices consistent with the conservation of the country’s natural and cultural heritage, including promotion of ecotourism development, establishment and enforcement of marine protected areas and encouraging greater cooperation between the multiple stakeholders in the marine resources and environment sectors. Currently the country suffers from a shortfall in the capacity required to ensure sustainability of the tourism sector in the face of climate change. A key stakeholder is the Ministry of Fisheries, Agriculture and Marine Resources. 5.3 Transfer and Uptake of Environmentally Sound and Sustainable Technologies The Maldivian tourism sector is already a centre of technology innovation, due to regulatory requirements for self sufficiency and sustainability of water and energy supply, solid waste management and wastewater treatment. In the project emphasis will be placed on demonstrating how environmentally sound technologies and other innovations, including those related to local

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health services and food production, can be expanded to benefit resorts and communities to adapt to climate change. 6. Rationale for GEF Involvement and Fit with GEF Operational Programmes and Strategic Priorities The First National Communication of the Maldives to the UNFCCC documents the significant consequences of climate change for the Maldives, the low ability to avoid or limit these impacts at either national and community level, and the extremely limited contribution the Maldives has made through anthropogenic drivers of climate change. Nevertheless, the same document highlights the vulnerability of the tourism sector to climate change, the important role tourism plays in the national economy and in the livelihoods of many Maldivians, and again the limited capacity of the tourism sector to avoid or limit the adverse consequences of climate change.

As a result, a suite of activities have been identified that will, with the assistance of the GEF and other development partners, ensure the continued functioning of the sector despite the pressures imposed by climate change. The activities proposed here are all country-driven and cost-effective, and have been selected not only because of their ability to reduce the vulnerability of the tourism sector to climate change but also because they will contribute to national sustainable development and to the well-being of those individuals and communities that depend on tourism for their livelihoods and well-being.

The proposed activities represent proactive responses designed to reduce the adverse consequences of climate change. They range from capacity building (including strengthening institutional capacities, constituency building and awareness rising) through to substantive, on-the-ground activities designed to reduce the additional risks imposed on the tourism sector by climate change. The additional risks to tourism are in many cases indirect, with the initial impacts being imposed on the water resources sector, agriculture, human health, infrastructure, and vulnerable terrestrial and marine ecosystems. The implications for integrated coastal zone management and for sustainable land and marine resources management have also been taken into consideration when prioritizing adaptation activities. In many instances responses designed to reduce the additional risks attributable to climate change will require the transfer and uptake of appropriate environmentally sound and sustainable technologies. The technology needs of the tourism sector are consistent with the more general national technology needs that are being identified in the FNA. GEF funding is thus sought to finance the additional costs of overcoming the barriers to the sustainable development of the tourism sector as a consequence of climate change.

The project as a whole will seek synergies and establish linkages with other GEF adaptation initiatives such as the Adaptation Learning Mechanism (ALM), and the Atoll Ecosystem Conservation (AEC) project. The objective will be to ensure interactions between projects so that the proposed project can add value to, and benefit from, these other projects, and also to avoid any duplication of effort or outputs. The modalities will be elaborated during the PDF phase through consultation process with national and local stakeholders. Some examples of potential synergies are provided below: ALM Activity 1: Gain a new understanding of the successes, failures and “good practices”

of adaptation planning, implementation and mainstreaming – the proposed project will contribute to the ALM knowledge base relevant understanding gained as a result of adaptation by the economically important tourism sector of a small island country;

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ALM Outcome 2: A knowledge base and active learning process for the ALM designed, established, and operationalized – the proposed project will draw on the ALM knowledge base so that international experience in on-the-ground adaptation by various sectors can be incorporated in the tourism adaptation initiatives undertaken in the Maldives;

The main constituencies of the learning benefits from this project are the Government, the private sector, local communities and GEF. The project will explore linkages such as implementing adaptation to climate change measures that have been already identified based on rigorous assessments through projects such as the AEC. It will also seek to build on institutions, processes and results obtained through activities under the NCSA, TNA, and if possible, the SNC (when it is implemented). 7. Expected Goal, Objectives, Activities, Outputs and Outcomes of Final Project Climate change will impact most sectors of national economies, and especially those in small island developing countries. Adaptation to climate change requires an integrated and coordinated (and often) multi-sectoral approach. The GEF, through the Special Climate Change Fund, is supporting this process through funding of additional costs associated with modifying baseline development programmes so as to permit effective adaptation to climate change. The goal of the proposed project is to address the adverse impacts of climate change through adaptation activities in the tourism sector in the Maldives. As a contribution to the achievment of this goal, the project objective is to develop and implement a range of long-term adaptation initiatives to reduce the vulnerability of key public and private sector stakeholders in the tourism sector to climate change. A fundamental premise linking the above goal with the proposed objective, and outcomes is that reducing climate change-related risks will bring much needed and tangible benefits to the longer term sustainability of tourism-dependent communities and to the national economy of the Maldives. The preceding sections have highlighted the strength of these relationships, which, in terms of climate-related risks, are characterised in Figure 1. The figure also provides a framework for the overall project.

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Figure 1 The main consequences of climate change of relevance to the tourism sector in the

Maldives and the proposed adaptation interventions1 Importantly, the adaptation measures highlighted in the figure above will not be implemented as discrete, stand-alone initiatives. Rather, to maximize synergies between adaptation measures, selected measures will be combined to form an adaptation package tailored to reducing climate change-related risks relevant to key stakeholders in the tourism sector. A wider range of possible adaptation measures is listed in Table 1, along with their relevance to tourism in the Maldives, barriers to implementation and how the MSP will remove those barriers. It should be noted that the final suite of adaptation measures to be implemented will be determined in a consultative process, assisted by the use of tools and other resources such as those developed by the ALM project and by the World Bank, including an adaptation screening and design tool. It is also important to note that since there will be an appropriate emphasis on “no regrets” adaptation measures and on generating benefits for the tourism sector, for national development most of the possible adaptation measures are of a generic nature, when considered at a higher level. Table 1 shows how the adaptation measures will be tailored to generate these benefits, principally by removing barriers to their implementation in the tourism sector and its dependent systems. Table 1: Sample of Possible Adaptation Measures, their Relevance to Tourism in the Maldives, Barriers to Implementation and Examples of how they might be removed. 1 Proposed adaptation measures seek to enhance the sustainability of tourist resorts, tourist-dependent communities and tourism’s natural resource base. Many of the adaptation measures have been identified in the First National Communication of the Maldives and during preparation of the National Adaptation Programme of Action.

Direct Consequences Indirect Consequences Adaptation Measuresfor Tourism Sector

Outcomes

Discomfort and Ill Health

Stress on Plants/Animals

Damage to Infrastructure

Elevated AirTemperatures

Elevated SeaTemperatures

High WaveIncidents

ElevatedSea Level

Rainfall Variabilityand Extremes

Increased Intensityof Cyclones

Contamination of Groundwater

Coral Bleaching

Coastal Erosion and Land Loss

Flooding and Inundation

Changed OceanCurrents

Reduced Fish Catch

Lower Marine Productivity

Drought

Decline in Tourist Arrivals

Education & Awareness Raising

Tourism Activity Diversification

Shade; Crop Diversification

Reduce Tourism Pressures on Coral

Reduce Tourism Pressureson other Marine Resources

“Soft” Coastal Protection;Improved Insurance Cover

Increased Water Storage

Desalination & Catchments

Enhanced Design/Siting Standards

Drainage and Pumping Systems

Tourism Product Diversification

R EDUCED

CLI

MAT E-RELATED

RISKS

TO

TOURISM-DEPENDENT

COMMUNITIES

AND

TO

TOURIS

M’S

NATURAL

RESOURCE

BASE

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Adaptation Measures Relevance to Tourism in Maldives

Barriers to Implementation

Proposed Removal of Barriers

Integrating adaptation to climate change into National and Sector Planning

Currently adaptation is not mainstreamed in long term tourism planning frameworks

Lack of information on which to base policy initiatives that address climate change impacts

Improve targeted information, such as climate risk profile for the tourism sector

Include climate change risk reduction in tourism-related regulations, codes ..

Currently climate change risks are not reflected in tourism-related regulations etc

Lack of information on which to base regulatory strengthening to address climate change impacts

Improve targeted information, such as climate risk profile for the tourism sector

Institutional Strengthening to coordinate climate responses in the tourism sector

Shortfall in institutional capacity to coordinate climate responses across tourism-related sectors

Lack of clarity as to the institutional strengthening required to improve sustainability of tourism in light of climate change impacts

Assess options and implement the most appropriate strategies that enhance institutional responses to facilitate adaptation to climate change

Education/Awareness Raising

Need to motivate and mobilize tourism staff and also tourists to the impacts of climate change

Lack of education and related resources that support behavioural change to cope with climate change

Prepare resources and undertake education and awareness programmes of the impacts, and adaptation options, to climate change

Desalination, Rainwater Catchments and Storage

Tourist resorts are major consumers of fresh water and this will be threatened by climate change

Lack of information on future security of fresh water supplies in light of climate change

Provide and ensure utilization of targeted information, based on climate risk profile and identify solutions that will be effective in the long run to cope with climate change

Drainage and Pumping Systems

Important services for tourist resorts and for tourism-dependent communities that is likely to be under pressure due to climate change

Lack of the targeted information needed to design systems with sufficient capacity to withstand climate change driven pressures

Provide and ensure utilization of targeted information, based on climate risk profile

Enhanced Design and Siting Standards

Many valuable tourism assets at growing risk from climate change, including extremes

Lack of the targeted information needed strengthen design and siting standards

Provide and ensure utilization of vulnerability information, based on climate risk profile, in decision making

Tourism Product Diversification

Need to reduce dependency of tourism in Maldives on “sun, sea and sand”

Lack of credible alternatives that have been demonstrated and accepted

Demonstration of credible alternatives to “sun, sea and sand” tourism

The three main outcomes of the full Medium Sized Project address the need for: (i) building capacity, including institutional capacity, to adapt to climate change; (ii) on-the-ground long term adaptation to climate change measures, in the context of national sustainable development and risk reduction for tourism-dependent communities and for tourism’s natural resource base; and (iii) documentation and dissemination of knowledge and good practices. Outcome 1: Strengthened capacity of the tourism sector and other key players and institutions to develop policy and plan for, and implement, adaptation activities designed to reduce climate-related risks to the tourism sector, including tourism-dependent communities and other sectors: (Output 1a) With the direct involvement of the Maldives' Department of Meteorology and Ministry of Tourism and Civil Aviation, prepare a targeted climate change risk profile for the

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tourism sector of the Maldives. The plan will follow the methodology of ADB (2005) and based on the climate risk profile for the Maldives, the tourism focused climate risk profile will include the likelihood of risk conditions, such as excessively high sea surface temperatures and the consequences, such as coral bleaching, sea level rise, increased storm surges and impacts on coastal infrastructure, with specific attention to locations that are of particular importance to tourism, and where possible has been identified by ongoing processes such as NAPA, National Communications etc. (Output 1b) Workshop for local and national stakeholders to prepare a plan to develop capacity to address climate change adaptation. This will build on the findings of the NCSA and TNA, and use relevant methods, tools, information and stakeholder engagement processes, to prepare a focused and detailed action oriented and time bound capacity enhancement plan. The plan will focus on (cross-sectoral) capacity development measures that are necessary to strengthen the enabling environment for adaptation to climate change in the tourism sector; (Output 1c) In accordance with the above capacity enhancement action plan, implement activities that build the capacity of key players in or related to tourism (e.g. host communities, national, regional and local governmental agencies and departments in the tourism and environmental fields, private sector investors, NGOs, tourism operators and managers) to coordinate, manage, undertake, monitor and evaluate adaptation initiatives that will reduce climate change related long term risks on the tourism sector. Examples activities include: -- the formation of an inter-ministerial and multi-stakeholder consultative advisory committee to oversee project coordination and implementation. The committee will involve representatives of key public, private and NGO institutions, and will be expected to coordinate, monitor and evaluate tourism-related climate change adaptation activities in the longer term. -- establishment & enhancement of operational institutional structures and functions to effectively address adaptation to climate change, at key institutions at the national and sub-national levels; -- awareness raising activities organized around relevant regional, national and sub-national environmental events; Outcome 2: Implement on-the-ground adaptation measures that will reduce climate change-related risks to tourism-dependent communities in ways that also contribute to national sustainable development. On the basis of the priorities identified during the PDF-A phase, including the required transfer and uptake of technologies, as identified in the TNA, NCSA, and NAPA, and information made available for inclusion in the SNC and making use of the enhanced adaptive capacity, the following outputs are anticipated; (Output 2a) Implement a set of demonstration projects that facilitate adaptation to climate change. Subject to technical assessment, and prioritizations based on consultation with stakeholders on adaptation measures to climate change during the PDF A phase, a demonstration project may involve the management of accelerated erosion at the resort and community levels based around the use of soft options such as planting of soil-binding vegetation The challenge is to identify and implement softer adaptation options that retain the aesthetics, integrity and functionality of the coastlines of tourist islands and their dependent communities. Measures should be prioritized based on ongoing activities under NAPA, National Communications, and other such initiatives. (Output 2b) Develop an adaptation implementation plan for the suite of adaptation options identified during the PDF A phase. This adaptation plan will be aimed at the primary stakeholders in the tourism industry (i.e. resorts, hotels, and related government institutions) and will focus on

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adaptation policies and measures over and above current initiatives that may already be, directly or indirectly, addressing climate change issues. The plan will seek to strengthen national institutions in ways that: (i) encourage responsible planning and management practices that promotes adaptation to climate change and which are consistent with the promotion of sustainable tourism; and (ii) result in greater cooperation between the multiple stakeholders in the marine resources, tourism and environment sectors to make the tourism sector more resilient to climate change. The plan will include targets (for 2020 and 2060), financial schemes, timeframes, and indicators to measure and track implementation and results. Outcome 3: Wider understanding of climate change adaptation policies and measures in the tourism sector, by documenting and disseminating the success factors, lessons learned and barriers, as well as good practice guidelines for replication and up-scaling. (Output 3a) Prepare a synthesis of the adaptation projects, with particular emphasis on: a) the enabling environment; b) implementation process; c) costs and benefits of adaptation; and d) replication and up-scaling; these findings will be made available for inclusion in the SNC; (Output 3b) Prepare a synthesis of comparative analysis of the three countries- (Seychelles, Maldives and Fiji) implementing the climate change and tourism project. The analysis will have particular emphasis on: a) the enabling environment; b) implementation process; c) costs and benefits of adaptation measures; and d) replication and up-scaling. These findings will be made available to UNDP/GEF’s Adaptation Learning Mechanism project, and these will help replication of the experiences in other island and coastal destinations. 8. Description of Preparatory Inception Stage 8.1 Expected Outcomes and Completion Date of PDF A project

The PDF A process will be guided by UNDP/GEF’s Adaptation Policy Frameworks for Climate Change (APF). The design of the project and especially the identification of adaptation measures that modify baseline development activities in the tourism sector must conform to the principal of additional cost reasoning. PDF-A grant funds are requested for the following activities, in order to produce the identified outcomes: 1) Initiate and undertake appropriate consultation and communication activities with all stakeholders; 2) Information gathering, to ensure existence of required information base for the medium-sized project, including technical, policy, economic and environmental information; 3) Undertake capacity enhancement (preparatory and on-going) activities, in order to ensure appropriate institutional arrangements are in place and full engagement, empowerment and participation of all stakeholders and key players; these activities will be coordinated and integrated with the NCSA and the TNA; 4) Develop and validate a selection matrix for choosing an appropriate and pragmatic suite of adaptation measures and demonstration activities - the matrix will reflect the multiple dimensions and levels of adaptation, including the interests and relevance to tourism enterprises, communities and government:

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• Based on the priorities articulated in the initial draft of the NAPA and the FNC, select

high priority adaptation activities at business, community and national scales that will reduce to acceptable levels the current and anticipated climate-related risks facing tourism-dependent communities and tourism’s natural resource base;

• Ensure that the selected initiatives build on lessons learned from the consequences of the

Indian Ocean tsunami for the tourism sector in the Maldives, and from the subsequent recovery and rebuilding efforts

5) Develop and test the methodology to prepare a plan that identifies, coordinates and promotes adaptation initiatives at business, community and national levels; this activity will be coordinated and integrated with the NAPA, the AEC project and UNDP/GEF’s Adaptation Learning Mechanism project; 6) Prepare baseline scenario and scenarios with and without GEF intervention; use these scenarios to develop incremental reasoning; 7) Develop and evaluate methods to ensure an on-going knowledge exchange and cross-fertilization process between the three projects (Maldives, Fiji and Seychelles). 8) Convene a stakeholder workshop to reach consensus on details for design and implementation of the medium sized project; 9) Further consultations with stakeholders to reach agreement on the endorsement, design and implementation approach for the demonstration projects to be undertaken in the full MSP phase - this includes agreement on stakeholders involved and collaborating organisations/agencies; 10) Undertake any other actions to ensure wide acceptance and support for the project by stakeholders, including government, industry and communities and the formation of a project team including local stakeholders; this will be coordinated and integrated with the NCSA, TNA and NAPA, and with preparations for the SNC; 11) Design and implement relevant monitoring, review and learning programmes and procedures, including development of relevant indicators, in order to meet GEF, UNDP, WTO and national requirements. Practical indicators will be developed to demonstrate the implementation of the demonstration projects and their longer-term impacts; 12) Establish a national inter-ministerial and multi-stakeholder committee with oversight of project coordination, execution, monitoring and evaluation. In order to identify suitable execution arrangement, capacity assessment for executing agency will be conducted by GEF implementing agency (UNDP).; 13) Identify support and donor institutions for the co-financing of the project implementation; and 14) Formulation and development of the full Medium Sized Project (MSP) proposal. The design of the MSP will follow the guidance of the UNDP Adaptation Policy Frameworks for Climate Change (APF). The PDF-A activities are required in order to obtain all the information and complete the planning necessary to design and implement the demonstration projects. To ensure overall success of the

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project, capacity building including institutional strengthening will be conducted. Training and awareness raising activities will also be undertaken. The PDF-A will also fund preparation of a plan for monitoring, review, learning and dissemination. 8.2 Total Cost of PDF A (including co-financing amounts and sources) This PDF A project will cost USD55, 000 (USD30, 000 from GEF and USD 7,000 in-kind contributions from Government, and 23, 000 from WTO which breaks down to USD 6,000 in cash and USD 12,000 in kind. WTO will provide 6,000 USD cash contribution. WTO, the Expert Consultants and the Government of the Maldives will provide in-kind contributions through allocating staff time, as well as providing office and equipment and consumables for the PDF-A coordination and execution (see budget on front page). The PDF-A phase will serve to identify and engage donor agencies and financial institutions and other partners for the co-financing of the full project. There are good possibilities of co-financing from the following sources: Maldives Association of Tourism Industry; National Chamber of Commerce and Industry; and Resort owners and operators.

8.3. Summary of Activities, Timetable and Total Cost of PDF A Activities (see Section 9.1 for details) Dates Amount

provided through GEF (USD)

Amount provided through other sources (USD)

Initial studies, data gathering, development of consultation methodology and the adaptation action selection matrix; capacity building

Months 1 & 2 10,000

Stakeholder engagement, consultations and national workshop; identification of demonstration activites; capacity building

Months 3 & 4 20,000 10,000

Assesment of institutional capacities for project implementation

Month 3&4 5,000

Sythesis of consultation results, research and preparation of full MSP proposal, final consultations for approval and submission to GEF

Months 5 & 6 5,000 5,000

Totals 30,000 25,000

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9. Total Budget and Work Plan Award ID: tbd Award Title: PIMS 3624 CC PDF A: Implementing Tourism Adaptation to Climate Change in the Maldives Project ID: tbd Project Title: PIMS 3624 CC PDF A: Maldives TACC-M Executing Agency: World Tourism Organization

TOTAL BUDGET AND WORK PLAN

GEF Outcome/Atlas

Activity

Responsible Party

(Implementing Agent)

Source of

Funds

Atlas Budgetary Account

Code

ERP/ATLAS Budget

Description/Input

Amount (USD) 2005 Total

(USD)

GEF 71200 International Consultant 15,000 15,000

GEF 71300 National

Consultant 10,000 10,000

Implementing Tourism Adaptation to Climate Change in the Maldives (TACC-M)

OUTCOME 1: A medium

sized project document for submission to

the GEF Council on

Implementing Tourism

Adaptation to Climate

Change in the Maldives

(TACC-M)

WTO

GEF 74500 Miscellaneous 5,000 5,000

Total 30,000

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10. Management Arrangements The PDF A will be executed according to UNDP’s National Execution Modality (NEX). The primary responsibility for financial and administrative management will be with the national executing agency supported by the UNDP Country Office. Based on the governments' requests, the World Tourism Organization (WTO) has been coordinating with the Ministries of Tourism of Fiji, the Seychelles, and the Maldives, to implement three demonstration country projects on climate change adaptation in the tourism sector. The proposed national-, sector- and community-scale demonstration projects will have high replicability and up scaling potential. Thus the experiences generated and lessons learned by these three SIDS can be applied at other island and coastal tourism destinations. The three SIDS seeking to demonstrate tourism adaptation have number commonalities, but also many distinctive environmental and socioeconomic characteristics. For this reason, each country-based project has specific aims and activities, while retaining critical elements in common in order to maximize synergies and ensure the best possible synthesis of experiences can be made available for application by other tourist destinations, as well as for ensuring global environmental benefits beyond the three country projects. Given the experience and project portfolio of GEF implementing agencies (IA) in the three countries, it was agreed that UNDP will act as the IA for Maldives and UNEP for Fiji and Seychelles. WTO will be the executing agency for all three projects in order to ensure effective coordination as well as full integration of the project outputs and outcomes. The three country projects (Fiji, the Maldives and the Seychelles) will implement adaptation to climate change and thereby achieve both short- and long-term local benefits in these highly vulnerable destinations. However, the overall project - the synthesis of the three country projects - goes well beyond generating local benefits. The adaptation sub-projects will be critical to improving our wider understanding of climate change impacts on tourism, including adaptation opportunities in other island destinations, coastal zones, and for tourism worldwide. This enhanced capacity of tourism to adapt to climate change, and manage natural resources in a more sustainable manner, will generate substantial global environmental benefits, as noted above 11. Monitoring & Evaluation

The project will comply with UNDP’s monitoring, evaluation and reporting requirements, as spelled out in the UNDP Programming Manual. Quarterly progress reports will be submitted to UNDP by the executing agency, providing a brief summary of the status of activities and output delivery, explaining variances from the work plan, and presenting work-plans for each successive quarter for review and endorsement. The Quarterly progress reports will provide a basis for managing disbursements. An Annual Project Report (APR) will be prepared at the end of year 1, summarizing and evaluating work in progress in more detail, and will be reviewed by the Project Steering Committee, which shall make recommendations to the executing agency and UNDP regarding the subsequent scheduling of project activities. A Terminal Report will be prepared upon project completion and reviewed at a terminal PSC meeting.

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12. Legal Context This Project Document shall be the instrument referred to as such in Article I of the Standard Basic Assistance Agreement between the Government of the Maldives and the United Nations Development Programme signed by the parties on 25th January 1978. . The host country-implementing agency shall, for the purpose of the Standard Basic Assistance Agreement, refer to the government co-operating agency described in that Agreement. The UNDP Resident Representative in the Maldives is authorized to effect in writing the following types of revision to this Project Document, provided that she/he has verified the agreement thereto by the UNDP-GEF Unit and is assured that the other signatories to the Project Document have no objection to the proposed changes:

a) Revision of, or addition to, any of the annexes to the Project Document; b) Revisions which do not involve significant changes in the immediate objectives, outputs

or activities of the project, but are caused by the rearrangement of the inputs already agreed to or by cost increases due to inflation;

c) Mandatory annual revisions which re-phase the delivery of agreed project inputs or increased expert or other costs due to inflation or take into account agency expenditure flexibility; and

d) Inclusion of additional annexes and attachments only as set out here in this Project Document

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13. Mandatory Annexes Annex 1: TOR for key staff

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Annex 2: Government GEF Operational Focal Point Endorsement Letter-

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Annex 3 Information on Applicant Institution Name: World Tourism Organization Type: UN Specialized Agency Date of Establishment, Membership, and Leadership: 1975, 150 Member States and Territories, governed through Regional

Commissions, the Executive Council and the General Assembly Sources of Revenue: Contribution of Member States Mandate/Terms of Reference:

WTO is an inter-governmental body, a UN Specialized Agency in the field of tourism. Through tourism, WTO aims to stimulate economic growth and job creation, reduce poverty levels, provide incentives for protecting the environment and heritage of destinations and promote peace and mutual understanding among all nations of the world.

Recent Activities/Programs, in particular those relevant to GEF: WTO has undertaken a wide range of research, capacity building and technical

cooperation activities aimed at promoting sustainable development of tourism in coastal zones and SIDS. Examples are the regional ecotourism conferences organized in Fiji and Seychelles in the framework of the UN-declared International Year of Ecotourism in 2002, and the Maldives Tourism Master Plan, developed with strict environmental criteria. Currently WTO is collaborating in a full-size GEF project under the GEF International Waters Focal Area. The project aims to reduce environmental impacts of tourism in coastal destinations of eight African countries.

WTO made an important initial step to address the complex relations between

climate change and tourism by convening the First International Conference on Climate Change and Tourism, in April 2003, in Djerba, Tunisia. The conference brought together over 140 delegates from 53 countries, drawn from representatives of the scientific community, various United Nations agencies (including UNEP, UNFCCC and IPCC), the tourism industry, NGOs, national tourism administrations and environment departments and local governments. The main outcome of the aforementioned conference was the Djerba Declaration on Climate Change and Tourism, which provides a basic reference and framework for further action by the major stakeholder groups.

The WTO has also developed a wide range of activities to support its member

countries affected by the Indian Ocean tsunami in order to re-develop their tourism sector in a sustainable way, and to identify and apply lessons learned from this disaster.

WTO is the Executing Agency for tourism projects financed through UNDP, and has delivered numerous technical assistance projects to support its Member States in the formulation and implementation of tourism policies, strategies and plans at the national and sub-national levels.

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SIGNATURE PAGE Country: Maldives

UNDAF Outcome(s)/Indicator(s): n/a Expected Outcome(s)/Indicator (s): n/a Expected Output(s)/Indicator(s): n/a Implementing partner: World Tourism Organisation (designated institution/Executing agency) Other Partners: Ministry of Tourism and Civil Aviation

Maldives Association of Tourism Industry Ministry of Environment, Energy and Water Ministry of Fisheries, Agriculture and Marine

Resources Department of Meteorology National Disaster Management Centre United Nations System Non Governmental Organizations Private Sector

Agreed by: On behalf of: Signature Date Name/Title Government of the Maldives:

WTO (Executing Agency):

UNDP:

Total Budget 55,000 Allocated resources: • GEF 30,000• Government (in kind) 7,000 • WTO (cash) 6,000 • WTO (in-kind) 12,000

Programme Period: 2006 Programme Component: Climate Change Adaptation Project Title: Implementing Tourism Adaptation to Climate Change in the Maldives (TACC-M)] Project ID: Pims 3624 Project Duration: Six Months Management Arrangement: NEX