River Restoration for Climate Change Adaptation (RIOS) | Mexico FMCN 22 October 2019 Project/Programme title: River Restoration for Climate Change Adaptation (RIOS) Country(ies): Mexico National Designated Ministry of Finance and Public Credit (SHCP) Authority(ies) (NDA): Executing Entities: Fund for the Gulf of Mexico (FGM), Northwest Fund (FONNOR) Accredited Entity(ies) (AE): Fondo Mexicano para la Conservación de la Naturaleza A.C. Date of first submission/ 10/21/2019 V.1 version number: Date of current submission/ 2/18/2020 V.2 version number A. Project / Programme Information (max. 1 page) ☒ Project ☒ Public sector A.2. Public or A.1. Project or programme A.3 RFP Not applicable private sector ☐ Programme ☐ Private sector Mitigation: Reduced emissions from: ☐ Energy access and power generation: 0% ☐ Low emission transport: 0% ☐ Buildings, cities and industries and appliances: 0% A.4. Indicate the result ☒ Forestry and land use: 10% areas for the project/programme Adaptation: Increased resilience of: ☒ Most vulnerable people and communities: 20% ☐ Health and well-being, and food and water security: 0% ☐ Infrastructure and built environment: 0% ☒ Ecosystem and ecosystem services: 70% A.5.1. Estimated mitigation impact 2,568,000 tCO2eq (tCO2eq over project lifespan) A.5.2. Estimated adaptation impact 63,294 direct beneficiaries (number of direct beneficiaries) A.5. Impact potential A.5.3. Estimated adaptation impact 865,634 indirect beneficiaries (number of indirect beneficiaries) A.5.4. Estimated adaptation impact 0.67% of the country’s total population (% of total population) A.6. Financing information A.6.1. Indicative GCF funding requested (max Amount: 9,000,000 Currency: USD Financial Instrument: Grants 10M) A.6.2. Indicative co- Amount: 1,000,000 Currency: USD Financial Instrument: Grants financing Institution: GEF (CONECTA PROJECT) A.6.3. Indicative total project cost (GCF + co- Amount: 10,000,000 Currency: USD finance) disbursement A.6. Estimated duration of period: 60 A.7.2. Estimated project/ 240 project/ programme: repayment period, if Programme lifespan applicable: 0 A.8. Is funding from the A.9. Is the Environmental and ☐ Yes ☒ Yes Project Preparation Social Safeguards Category C or ☒ No No Facility needed? I-3? ☐ Minimal or no negative environmental and social impact is expected A.10. Provide rationale for since the participation of communities will be voluntary, the natural habitat the ESS categorization will be restored, and gender equity will be ensured. Outreach will be (100 words) culturally appropriate and allow for the participation of stakeholders in training activities aimed at increasing ecosystem-based adaptation capacity. Simplified Approval Process CONCEPT NOTE Template V.1.1 GREEN CLIMATE FUND | PAGE 2 OF 17 The project does not include activities on infrastructure, resettlement, use of agrochemicals, or invasive species. A.11. Has the CN been ☒ Yes ☐ Confidential A.12. Confidentiality shared with the NDA? ☐ No ☒ Not confidential Mexico is highly vulnerable to the effects of climate change, such as the increase in extreme events, which are affecting watersheds (droughts, floods, landslides), and the negative ecological, economic, and social A.13. Project/Programme impacts are expected to be exacerbated. The objective of RIOS is to rationale, objectives and increase adaptive capacity in watersheds vulnerable to climate change approach of through river restoration and connectivity by: (i) conducting restoration, programme/project (max conservation and improved productive activities, implemented by local 100 words) organizations in the states of Jalisco and Veracruz, (ii) increasing local monitoring capacities to reduce climate vulnerability, (iii) aligning public and private climate-smart investments; and (iv) promoting climate policy in a National River Restoration Strategy. B. Project / Programme details B.1. Context and Baseline (500 words) Mexico has geographical characteristics that place it as one of the most vulnerable countries to the effects of climate change (SEMARNAT, 2014). These effects will have negative ecological, economic, and social consequences, which are already visible today (Sarukhán et al., 2012). In a scenario business as usual, the cost of climate change in Mexico could reach between $550,000 million-$2.3 billion in 2100 (INECC, 2019). These impacts reduce ecosystem services in watersheds and riparian ecosystems. A riparian ecosystem is a transition between the aquatic ecosystem and the adjacent terrestrial area (US Forest Service, 2000). Riparian vegetation corridors regulate processes that result in valuable ecosystem services such as uptake, infiltration, and retention of sediments and contaminants from human activities (Iura et al., 2013). However, it is estimated that 45% of riparian corridors in Mexico are degraded (Garrido et al. 2010). This is related to the pressures of land use change caused by the deterioration in territorial suitability for agricultural and livestock activities, caused by climate change; this leads to deterioration of the hydrological cycle and soils. Other barriers are lack of local governance, limited institutional coordination, and deficient alignment of public and private investments. Climate change impacts in this ecosystems are expected to be exacerbated, with negative implications for local communities. Riparian ecological restoration can significantly increase adaptation of these communities to the effects of climate change (Seavy et al., 2009). Two highly vulnerable watersheds are the Vallarta region in the state of Jalisco and Jamapa basin in Veracruz. Both areas were selected for this project due to their vulnerability to climate change events, climate-change adaptation potential, and local capacities. The regions have different environmental and socio-economic characteristics to maximize the learning potential. Vallarta region in Jalisco. Population: 42,754 (48.5% women).Extension: 22,702ha.Riparian corridors: 6,838ha. Estimated GHG emissions in Jalisco: 25.7 Mt CO2 eq., with 11% from AFOLU (INECC, 2014). Rate of land use change for the basin 1993-2011: 3.23%. Forestry is practiced in the mountainous areas, small scale agriculture on hillsides, extensive cattle ranching within 8,000ha of the basin, and traditional and nature-based tourism is present mostly in coastal areas, with over 4,057,875 tourists per year. Jalisco had USD$389.7 millions of economic losses due to hydrological disasters Simplified Approval Process CONCEPT NOTE Template V.1.1 GREEN CLIMATE FUND | PAGE 3 OF 17 during 2000-2015 (data from CENACOM, CENAPRED and FONDEN), 95% weather-related. Climate change scenarios in the near future project an increase of 0.5-4.5°C, and precipitation up to +20mm change. The region presents climate change vulnerability to: human settlements to flooding (vhsf), to landslides (vhsl), extensive livestock farming exposed to flooding (velff) and to water stress (elfws), and forage production exposed to water stress (fpws) (INECC, 2018). Climate change projections show that all these vulnerabilities will increase in the future (2030) (Annex 2 for project areas and Annex 4 climate change vulnerability in the region). Jamapa watershed in Veracruz. Population: 10,772 (51.2% women).Extension: 36,309ha.Riparian corridors: 7,956.00ha.Rate of land use change in the area is 0.28%. In the upper and middle part of the basin are agricultural activities, such as vegetable production and fruit trees, and near 3,000ha have extensive livestock. Veracruz is one of the top five states with highest economic loss for tropical cyclones, rains, and floods during 2000-2012 (SEMARNAT, 2014). In the watershed, climate change scenarios in the near future project an increase of 1-2°C, and precipitation up to +20mm change. Over 99% of the disasters in the municipalities in the watershed are weather- related. The region presents climate change vulnerability of vhsf, vhsl, velff, elfws (INECC, 2018). Climate change projections show that most of them will increase in the future (2030). This project is fully aligned with Mexico´s priorities. The project will support to finance the additional costs of implementing adaptation activities prioritized by the government´s climate commitments. The adaptation National Determined Contributions (NDCs) includes three pillars: (i)Social Adaptation, (ii)Ecosystem-Based Adaptation, and (iii)Infrastructure and Productive Systems. The NDC includes in its goals: (i)reforestation in watersheds, with particular focus on riparian ecosystems; (ii)conservation and restoration of ecosystems; (iii)integral watershed management, and (iv)integration of climate change criteria into agricultural and livestock programs. Mexico is currently developing the National Adaptation Strategy, this is intended to:¨reduce vulnerability to the effects of climate change (…) and to facilitate the integration of adaptation to climate change in policies, activities and programs(…)”. B.2. Project / Programme description (1000 words) Component 1: Increase functional connectivity in two watersheds. This Component will strengthen capacities in producers along the Jamapa and Vallarta watersheds to conduct activities on their land that promote ecosystem-based adaptation through functional connectivity. Functional connectivity are biological corridors that improve ecosystem services, which are directly linked to increased resilience to the effects of climate change. INECC -the National government agency that coordinates climate change research and policy- has identified