Incremental Costs


  1. The overall goal of the GEF Alternative is conservation of the biological diversity and ecological integrity of the Romanian forest, alpine and meadow ecosystems of the Carpathian mountain chain. The GEF Alternative will establish inter-sectoral participatory planning and sustainable management of natural ecosystems and associated landscapes at three demonstration sites in the Carpathian mountains, and mechanisms to support replication of these activities at other priority conservation sites. The total incremental cost to achieve these outputs is approximately US$8.8 million, of which a grant of US$5.5 million is requested from GEF. Context and Broad Development Goals
  2. Natural temperate forest (broad leaf and mixed forests 70%, and conifers 30%) cover 27% (6.2 million hectares) of Romania's land area. Approximately two thirds of this occurs in the Romanian portion of the Carpathian mountains, where more than half of all forests have been effectively managed for conservation objectives, such as watershed management, rather than wood production. These areas include some of the last and largest tracts of relatively undisturbed and virgin forests still remaining in Europe. The natural soil profile and ecology has been maintained through the use of natural regeneration in more than 75% of Romania's production forests. The natural integrity and ecological viability of Romanian forest is indicated by the continued presence of the full range of European forest fauna, including approximately 60% and 40% of all European brown bears and wolves respectively.
  3. Romania's rich natural and biological resource base is coming under increasing pressure in response to the country's need for forestry development. In recent years, following the political and economic transition and the breakdown of regulatory frameworks, the nation's ecosystems have been threatened by a variety of unsustainable land use practices. These include overgrazing of alpine and hill forest meadows, plowing under of contour bands, and clear cutting of private forest land. Overexploitation of state forests and uncontrolled and inappropriate forms of tourism and associated infrastructure developments in highly-sensitive mountain ecosystems have likewise had a significant impact upon biological diversity.
  4. Concerns over increasing environmental threats to the country's biological resources prompted the Government of Romania (GoR) to prepare a National Biodiversity Conservation Strategy and Action Plan. The National Strategy affirms Romania's commitment to sustainable natural resource management and biodiversity conservation and identifies four principal biodiversity conservation priorities:
    • development of the legal framework and strengthening the institutional capacity for conservation of biological diversity;
    • organization of the national systems of protected areas,
    • in-situ and ex-situ conservation of threatened, endemic and/or rare species, and those with a high economic value and
    • protection and conservation of biodiversity outside protected areas through minimizing inappropriate land-use practices, restoring altered ecosystems and habitats, and promotion technologies which favor sustainable natural resource use. The project will address these national priorities. Baseline Scenario
  5. In this analysis, funding for the baseline scenario is differentiated into three sources:
    • direct Government funding of planned and on-going biodiversity conservation programs;
    • donor activities which have been initiated as a result of the GEF program, which will provide baseline information critical to the success of the GEF project, and are listed as co-financing;
    • other donor activities which will contribute to overall biodiversity conservation in Romania.
  6. Government. Over the next decade, the GoR's economic transition will likely lead to increased industrial output as well as expansion of the forestry sectors. Recognizing that these activities have not always been highly sensitive to protection and sustainable use of biological resources, the GoR will endeavor to stimulate and carry out such activities in an environmentally sustainable manner. Under the Baseline Scenario, it is expected that the GoR will concentrate its scarce resources on biodiversity conservation through regulating natural resource exploitation in state forests and strengthening the capacity of natural resource management agencies, including the Directorate for Nature and Biodiversity Conservation (DNBC) and the National Forestry Authority (NFA), both of which are under the authority of the Ministry of Waters, Forests and Environmental Protection (MWFEP).
  7. At present, Romania has identified a number of national parks, biosphere reserves, and potential protected areas. However, with the exception of the Danube Delta Biosphere Reserve, most areas that are proposed for protected area management occurs in state forest lands that are under threat from proposed changes in land tenure and likely pressures to increase resource use. NFA is charged with overseeing Romania's national parks and protected areas, yet lacks clear responsibility for preparing and implementing management plans for biodiversity conservation. Out of NFA's annual budget of US$ 160 million, about a quarter is spent on forest conservation (for watershed management, seed stands, game and hunting management, etc.).

    However, none of this is specifically targeted towards biodiversity conservation and management of protected areas. Consequently, all funding from NFA for project activities is considered incremental.

  8. NFA does, however, receive money for its research institute, ICAS, from the Ministry of Research and Technology for research on biodiversity issues. So far, US$ 268,000 has been allocated to NFA/ICAS for:
    • research on biodiversity of forest ecosystems and potential protected areas in forest lands;
    • the development of a biodiversity database; and
    • studies on the ecological role of bear, wolf and lynx in the Carpathian mountains
  9. Donors. The Government of Romania, in conjunction with development agencies, is undertaking activities related to natural resource management and biodiversity conservation. International and National NGOs are also contributing to the enabling environment, with support from private and corporate donors, bilateral and multilateral agencies. The activities which have broad national impacts and will contribute to project success, but are not included in the project baseline scenario because of their broader focus and sometimes less direct impact include:
    • A RAMSAR Small Grant Fund to DNBC for identifying and characterizing Romanian Wetlands which can be included in the National Network of Protected Areas, or which can be declared as Internationally Important Wetlands ( $140,000).
    • A NFA-ICAS initiative, in collaboration with Belgium, to develop Internet sites on biodiversity in Romania. The Government contribution, from the Ministry of Research and Technology, General Directorate of Natural Resources and Environment, is $15,000; the Belgian Ministry of the Walloon Region have contributed $40,000.
    • An initiative of Bird Life International in collaboration with the Romanian Ornithology Society (NGO) to identify important bird areas in Romania ($13,000).
    • Investments to minimize human impact on the ecosystems from Retezat mountain, funded by the Regional Environmental Center and carried out by Fundatia SALVAMONT - Lupeni, an NGO mountain rescue team in Retezat ($15,000).
    • World Bank activities:
      • GEF Danube Delta Biodiversity Project, which supports implementation of the Danube Delta Biosphere Reserve's conservation management plan (US$ 4.3 million);

      Project co-financing of baseline activities totaling $1.0 million is as follows:

      • World Bank/WWF Alliance activity, which will prepare a proposal to demonstrate sustainable forest management through certification of forest products (US$ 35,000).
      • Two projects funded by the European Union:
        • In-Copernicus project to study and mitigate the effects of grazing in Piatra Craiului, for which the EU is providing $112,000;
        • an EU LIFE project working with MWFEP to support large carnivore conservation in Piatra Craiului, for which about $850,000 has been allocated.
  10. Costs. Total expenditures under the Baseline Scenario, through international cooperation, are estimated at US$1.0 million.
  11. Benefits. Implementation of the Baseline Scenario would result in limited protection of biodiversity at existing protected areas and limited public sector capacity to manage Romania's natural resource base. The efforts of international and national NGOs will result in a marginal increase in environmental awareness, and the activities of development agencies will result in a limited increase in sustainable natural resource management. The activities are unlikely to ensure protection of globally significant biological resources due to the lack of an explicit focus on biodiversity values as well as institutional, financial, legal and socioeconomic constraints to their protection.

    Global Environmental Objective

  12. The global environmental objective is to conserve the biological diversity and ecological integrity of the last and largest remaining tracts of relatively undisturbed forest ecosystem in Europe. Romania is near the convergence of four biogeographic influences, including: eastern (Caucasian/pontic), northern (boreal), southern (Mediterranean and Balkanic) and western (continental European and panonic). Consequently the country includes a relatively large number of endemic and subendemic flora. Additionally, the extent and continuity and naturaleness of forest ecosystems of the Carpathian mountain chain ensures ecological viability and supports the full range of Eastern European forest fauna, including, for example, Europe's largest numbers of top predators (bear, wolf and lynx), all ten species of European woodpecker, and ten of Europe's twelve species of mustelid carnivores (excluding wolverine and sable, species that are adapted to arctic and taiga habitats, respectively).

    GEF Alternative

  13. Scope. The GEF Alternative would build on the Baseline Scenario by establishing effective inter-sectoral participatory planning and sustainable management of natural ecosystems and associated landscapes at three demonstration sites in the Carpathian mountain, and mechanisms to support replication of these activities at other priority conservation sites. The GEF Alternative would make possible activities and programs that would not be undertaken under the Baseline Scenario, including strengthening capacity at the field and central levels for planning and managing land-use for conservation and sustainable use of biodiversity in protected areas and surrounding buffer zones; supporting an education and awareness program; mechanisms to reduce non-sustainable resource use, promoting eco-tourism development, reintroducing endemic species and demonstrating sustainable forest management practices. GEF funds are also leveraging additional funds for parallel activities supporting protected area systems and biodiversity conservation.
  14. Costs. The total cost of the GEF Alternative is estimated at US$8.8 million, detailed as follows:
    • strengthen the national framework for managing biodiversity conservation - US$ 1.10 million (GEF financing - US$ 0.86 million);
    • establish systems for biodiversity conservation planning and management at the three demonstration sites (two protected areas and one forest park) - US$ 4.30 million (GEF financing - US$ 2.20 million);
    • establish mechanisms to reduce non-sustainable resource use - US$ 0.68 million (GEF financing - US$0.65 million);
    • establish eco-tourism programs - US$ 0.25 million (GEF financing - US$0.19 million);
    • establish program to reintroduce European bison - US$ 0.84 million (GEF financing - US$0.54 million);
    • develop models of forest management practices that reflect biodiversity conservation concerns - US$ 0.14 million (GEF financing - US$0.12 million);
    • establish public awareness programs at the three project sites and at the national level - US$ 0.72 million (GEF financing - US$0.54 million);
    • project management - US$ 0.76 million (GEF financing - US$0.40 million).
  15. Benefits. Implementation of the GEF Alternative would give the GoR the ability to take a comprehensive approach to biodiversity conserva-tion, protected area management and biodiversity conservation in forest management planning,. Benefits generated from this comprehensive approach would include those classified as "national" -- increased sustainability of natural resource use, greater stability in long term revenues from the natural resource base, and increased public awareness of environment and natural resource issues -- as well as those considered "global" in nature. Global benefits would include the conservation of Romania's endemic flora and fauna in three priority areas; protection of the ecological integrity of critical ecosystems and habitats, including important corridors for endangered species; mainstreaming biodiversity conservation in forest management; outreach to and involvement of local communities and local governments; and development of viable approaches to natural resource use in buffer zones, thereby reducing pressure on protected areas.

    Incremental Costs

  16. The difference between the cost of the Baseline Scenario (US$ 1.0 million) and the cost of the GEF Alternative (US$ 9.8 million) is estimated at US$ 8.8 million. This represents the incremental cost for achieving global environmental benefits through the establishment of three protected areas which would conserve globally significant biodiversity and development of mechanisms for biodiversity conservation and sustainable use in forest management and among buffer zone communities adjacent to the protected areas. The GoR has committed to mobilizing US$ 2.4 million toward the GEF Alternative. Additionally, NFA will provide US$ 900,000 to pay for implementation staff salaries at the three demonstration sites. Consequently, a GEF grant of US$ 5.5 million is requested.

To find out about Incremental Cost Matrix see Annex 4