This document proposes a policy on incremental costs and full costs. It sets out methodologies for the GCF and its stakeholders to apply in estimating the agreed incremental costs and agreed full costs in its project approval processes. The methodologies proposed are designed to guide stakeholders and the GCF Secretariat in making more transparent and consistent estimations of full and incremental costs as part of the funding proposal approval process. The methodologies make use of qualitative narratives and quantitative data where available, taking into account capacity limitations and availability of data.