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The Global Environment Facility (GEF) is a multilateral financial mechanism that promotes international cooperation around the protection of the global environment. It grew out of a concern for global environmental problems in the 1980s, particularly a growing awareness of transboundary environmental problems and recognition that efforts to improve matters would be costly. Today, GEF is the single largest grant-making institution for global environmental programs. It has allocated some $5 billion for more than 1,500 projects in 140 countries.

Projects are developed and financed through three implementing agencies: the World Bank, United Nations Environment Program (UNEP), and United Nations Development Program (UNDP). Executing agencies that implement projects on the ground include regional development banks and a number of UN specialized agencies. Governance structure of the GEF is centered around the GEF Council, a group composed of 32 representatives from member states who meet biannually to review, comment upon, and reject or accept GEF projects, future business plans, work programs, and policies. The GEF Assembly, composed of all GEF 176 member states, meets every three or four years to review and approve general policies, operations, and amendments to the founding GEF Instrument. GEF operations are coordinated by a Secretariat in Washington, D.C. The GEF has been applauded for its unique structural flexibility and strong ability to adapt in a changing environment.

Focal Areas and Projects

The GEF promotes environmentally beneficial projects in developing countries through six focal areas: Biological Diversity, Climate Change, International Waters, Ozone Depletion, Land Degradation, and Persistent Organic Pollutants. The GEF acts as the financial mechanism for the following global conventions and international agreements: the United Nations Framework Convention on Biological Diversity, the United Nations Framework Convention on Climate Change, the Montreal Protocol, the United Nations Framework Convention on Combating Desertification, and the Stockholm Convention on Persistent Organic Pollutants.

The GEF provides concessional financing to cover the incremental costs necessary to achieve global environmental benefits in the six focal areas. Incremental costs are calculated by subtracting the costs of any national or local benefit from the total cost of the project to identify the cost of creating global environmental benefits that the recipient would otherwise have no incentive to fund. Cofunding is expected to cover the “national” benefits of the project. According to the GEF publication Achieving the Millennium Development Goals: A GEF Progress Report, the institution’s work reflects the “current thinking within the conservation movement,” emphasizing management of ecosystems and cooperation with the “human communities found there.” This signals a shift among all focal areas from a technological emphasis to an approach that considers both economic and life systems.

The First Decade of the GEF: Second Overall Performance Study (2002) of the GEF found that the institution’s biodiversity program, specifically, made “significant advances in demonstrating communitybased conservation within protected areas, and, to a lesser extent, in production landscapes.” As the financial mechanism for the UN Convention on Biological Diversity, the GEF recognizes intrinsic and global benefits of biodiversity, and funds incremental costs that may otherwise dissuade countries from protecting biodiversity. Yet, the biodiversity program has received criticism for overly ambitious goals and inadequate local participation and its inability to address the root causes of biodiversity loss.

Global climate change impacts a wide array of consequences across a wide spectrum of communities; accordingly, the GEF pursues a synergistic model to address the consequences of climate change. It utilizes market development, sustainable business models, and demand-side incentives to complete projects that remove barriers to efficiency and conservation, promote alternative energy, reduce implementation and long-term costs of alternative energies, and support sustainable transport. For example, the Poland Efficient Lighting Project relied on the GEF’s manipulation of market forces to subsidize the production of energy-efficient fluorescent lamps, thereby increasing the percentage of households that use energy-efficient lighting.

Action-oriented, on-the-ground projects with replicable schemes characterize the GEF’s International Waters projects. Unencumbered by a global convention, the GEF can exhibit a high degree of autonomy in this area. The majority of the International Waters portfolio is dedicated to regional projects, in which education and dialogue are emphasized with the hope that future problems can be addressed collaboratively by neighboring countries. Recent research on these projects found success in building scientific knowledge and creating linkages across social, economic, and environmental issues but found less success in the GEF’s ability to enhance the contractual environment and build national capacity.

Although the Ozone Program is the smallest of GEF programs, the impact of ozone-depleting substances (ODS) on earth’s protective ozone layer is no small matter. The GEF is not officially linked to the Montreal Protocol, which limited the production of ODS; nevertheless, it has secured $138 million over the last 10 years to help countries with economies in transition to begin phasing out the use of ODS. Only countries that have ratified the protocol are eligible for GEF support.

Land degradation has deep links to global environmental change, among them the threat to biodiversity, the ability to induce climate change, and the disruption of hydrological cycles. GEF projects cut across focal areas to combat desertification and deforestation, with sustainable land management as the ultimate goal. The land degradation program exhibits greater recognition of poverty and economic development than other focal areas but lacks ingenuity: the GEF’s Second Overall Performance Study noted that land degradation activities lack innovative approaches to policy and technological components, with projects tending to rely on old technologies and approaches.

Living organisms absorb persistent organic pollutants (POPs) through food, water, and air and accumulate these harmful compounds in their tissues. Exposure to POPs may affect immune and reproductive systems and neurobehavioral development and is connected to birth defects, cancers, and osteoporosis. As the financial mechanism for the Stockholm Convention on Persistent Organic Pollutants, between 2001 and 2004 the GEF funded more than $141 million POPs projects. The majority of the more than 150 projects center on implementation of the convention, and include the destruction of obsolete stockpiles of POPs.

The GEF in Transition

Presently, officials at the GEF are preparing its fourth replenishment cycle. Since the GEF’s first funding cycle in the mid-1990s, the United States, the GEF’s largest single shareholder, has been holding down GEF funding levels. Most recently, it required the GEF to adopt a new resource allocation framework as a condition of continued U.S. financial support. According to Raymond Clémençon, this controversial framework “allocates GEF funds to recipient countries according to their global environmental relevance and ties resource allocation to performance-based indicators.” Under this new framework, to be implemented beginning in July 2006, countries will be ranked by a Benefits Index and a Performance Index. The highest-ranked countries in each focal area will get individual country allocation. The remaining countries will be placed into groups with collective access program funding. Undoubtedly, the new framework will change how the GEF conducts business. It is expected to seriously alter competition among project proposals. Indeed this change in the GEF’s funding allocation structure, coupled with changes in GEF focal areas, will provide fertile ground to further investigate GEF projects and programs-and this institution’s broader impact on the global environment.

Bibliography:

Raymond Clémençon, “What Future for the Global Environment Facility?” Journal of Environment and Development (v.15/1);
Eric Dewailly and Christopher Furgal, “POPs, the Environment, and Public Health,” in David Leonard Downie and Terry Fenge, , Northern Lights against POPs: Combatting Toxic Threats in the Arctic (McGill-Queen’s University Press, 2003);
Andrea K. Gerlak, “One Basin at a Time: The Global Environment Facility and Governance of Transboundary Waters,” Global Environmental Politics (v.4/4, 2004);
Gerlak and L. Parisi, “An Umbrella of International Policy: The Global Environment Facility at Work,” in Dennis L. Soden and Brent S. Steel, eds., Handbook of Global Environmental Policy and Administration (Marcel Dekker, 1999);
Global Environment Facility, Achieving the Millennium Development Goals: A GEF Progress Report (Global Environment Facility, 2005);
Global Environment Facility, The First Decade of the GEF: Second Overall Performance Study (Global Environment Facility, 2002);
Global Environment Facility, Operational Strategy (Global Environment Facility, 1996);
Korinna Horta, Robin Round, and Zoe Young, The Global Environment Facility: The First Ten Years-Growing Pains or Inherent Flaws? (Environmental Defense and Halifax Initiative, 2002);
Helen Sjoberg, From Idea to Reality: The Creation of the Global Environment Facility (Global Environment Facility, 1994);
Charlotte Streck, “The Global Environment Facility-A Role Model for International Governance,” Global Environment Politics (v.1/2, 2001).