The GEF: Five Years After Rio

OUR PLANET 9.1 - The Way Ahead



The GEF: Five Years After Rio



Global Environmental Facility

INNOVATION * PARTICIPATION * TRANSPARENCY





The Global Environment Facility (GEF) is a financial mechanism that helps protect the global environment by incorporating activities designed to protect it into the process of sustainable development. GEF-sponsored projects, programmes and activities address four aspects of the global environment: biological diversity, climate change, international waters and the ozone layer. Land degradation issues, primarily desertification and deforestation, as they relate to these four focal areas, are also being addressed. The Facility is directed by a council representing its nation-members and GEF projects are implemented by the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP) and the World Bank.




bicycle in mud

The vocabulary of sustainable development is derived from the lessons it teaches. Through on-going application of these lessons, more is being learned about how to help developing countries improve their living standards while also protecting their natural resources. Yet the pace of improvement never seems fast enough, particularly in the wake of intense pressures exerted by soaring levels of inflation, population growth and pollution. As these worldwide threats to social and environmental security pervade, another lesson, cooperation, assumes escalating importance.

In the five years since the 1992 Earth Summit, the international community has addressed global issues such as biological diversity, climate change and water-resource management through international conventions and protocols. At the same time, a marked decline in official development assistance to the lowest level in decades has made cooperation among participants in development projects - countries, local communities, the private sector, acadaemia and non-governmental organizations (NGOs) - all the more essential for environmentally sustainable development.

The GEF is one catalyst for cooperative action. Nearly 160 countries currently participate in the Facility, which is a financial mechanism that helps developing nations and those with economies in transition protect the global environment. It creates opportunities for local communities and national governments alike to partner with private investors and other actors working toward shared, defined goals.

The GEF grants and concessional funds disbursed complement traditional development assistance by covering the additional costs (also known as 'agreed incremental costs') incurred when a national, regional or global development project also targets global environmental objectives. As of December 1996, about $1.33 billion had been allocated in the GEF work programme, composed of 220 on-going and planned projects in some 85 countries. This funding has been supplemented by almost $3.3 billion in co-financing, which has come from international agencies, a number of individual donor nations and the private sector.

As the incremental or start-up costs are covered for innovative and environmentally sound technologies, activities become more commercially attractive to both manufacturers and beneficiaries, and additional financing is leveraged. For example, the GEF has provided $528 million in grant financing for preparation and implementation of projects to address climate change. These funds have leveraged an additional $2.73 billion in financing for planned and on-going activities in nearly a hundred countries.



waste pipe

REPLENISHMENT DUE

In March 1994, the GEF was restructured from a pilot effort begun in 1991 to become a permanent Facility. Thirty-four nations, including 13 of the countries slated to receive assistance, pledged $2 billion to the GEF's core fund, which is scheduled for replenishment during 1997.

In preparation for the replenishment, and at the request of the Earth Council, the GEF Secretariat recently reviewed the work completed since the Facility's inception and its restructuring. Not an annual report, nor an implementation review, the 'self-assessment' entailed a broader look at the early lessons, accomplishments and challenges yielded during the GEF's first few years. It surveyed its processes, which, as they evolved, sometimes proved cumbersome. The review provided an opportunity to step back, and recommendations were then offered for how these initial experiences might benefit on-going and future work, both on the ground and in the international fora.

The GEF operates the financial mechanism for the Convention on Biological Diversity (CBD) and the United Nations Framework Convention on Climate Change (FCCC). The guidance set forth by these treaties is reflected in the GEF Operational Strategy (published in 1995), and is applied through the activities under way in the field. The strategy also integrates the guidance from international waters treaties as well as the Montreal Protocol on Substances that Deplete the Ozone Layer. It further calls for public involvement at every stage of the project cycle.



forest

REFLECTING NATIONAL AND REGIONAL PRIORITIES

The early experiences of the GEF revealed that while open partnerships between governments, communities and international actors yield stronger, more sustainable projects, the flexibility required of them can also result in implementation delays. Because many GEF projects are without precedent and most require the participation of many public and private actors in their design and execution, the actual disbursement of funds has often gone slowly. Getting it right takes time. All efforts must reflect national and regional priorities for development while also targeting benefits for the global environment. The participatory nature of the Facility has allowed for experimentation - from innovative technologies and the transfer of them, to funding windows and establishing which procedures work best for getting large, medium and smaller efforts off the ground toward productive, sustainable returns.

Cooperation and innovation have gone hand-in-hand for the GEF and its implementing agencies. With the stagnation of official development assistance, innovative methods have been sought to finance activities as well as to reform the political policies and practices that hinder them at the global, regional, national and community levels. A particular problem is the low value placed on natural resources, stemming from a lack of knowledge and appreciation to poor economic and political policies that inadvertently abet misuse of natural resources in search of immediate financial gain.

The GEF and its partners seek to leverage dollars as well as momentum to address such problems. To attain the maximum global benefits with the financial resources available, the GEF channels its operations into three broad interrelated categories: enabling activities, short-term response measures and Operational Programs. Enabling activities represent a basic building block of GEF assistance; they are a means of fulfilling communication requirements to the FCCC and the CBD. The activities help provide the basic information necessary for policy development or assist countries in identifying national or regional priorities. To date, GEF assistance for enabling activities totals more than $70 million.

Short-term response measures are funded when they reflect country priorities, are effective in the short term, and are likely to succeed. For example, an immediate reduction in greenhouse gases might serve as a rationale for a project in this category that also includes areas for which Operational Programs (see below) have not yet been developed. The GEF has allocated more than $83 million to date for 12 short-term response measures.

Within the operational strategy, ten Operational Programs outline the main types of activities which are initially being pursued by the GEF and its implementing agencies.

Larger developing countries and those with better financial resources sometimes have the educated personnel, the communications network and the physical infrastructure to back up larger development projects. Smaller nations usually lack such capacity, but nonetheless, they shelter resources that are just as valuable to the global environment. To help them conserve and use resources sustainably, the Facility and UNDP adopted a strategy of supporting small, low-cost ventures - often NGO initiatives - that can lay the foundation for broader efforts and help develop the skills to make larger, future investments more feasible. Begun in 1992, this Small Grants Program (SGP) is active in 33 countries and aims to include 13 more in 1997. It awards grants of up to $50,000.

Having already awarded funds to some 750 NGOs, the SGP received 565 proposals in the ten months from September 1995 to July 1996, approving 134, rejecting 330, and returning the remaining ones for revision and reconsideration. Of the successful ideas, nearly two-thirds addressed biodiversity protection goals.

Mini-investments, such as those in the SGP, were found to bring quick returns and spur community involvement, but the scale was limited, and so was the impact. In 1996, the GEF and the implementing agencies sought to incorporate the speed and flexibility of the SGP into a streamlined set of procedures for handling medium-sized projects in which GEF financing will be $1 million or less. The goal is to cut preparation time for project proposals to no more than three months and to expedite review by the GEF and the project's implementing agency to a maximum of 25 days.



PARTICIPATION AND TIMELINESS

Two other features of the GEF address participation and maintaining timeliness as a priority. An advisory group, the Scientific and Technical Advisory Panel (STAP) under UNEP administration, reviews projects proposed to the GEF to insure they incorporate lessons from the field and ideally stand as models of cost-effective experimentation.

The Project Preparation and Development Facility (PDF) serves to accelerate project development. Small but rapid allocations of funds, from a maximum of $25,000 at the earliest stage of a project's development to as much as $1 million for detailed technical design enable the GEF to move ahead on promising efforts working toward endorsement as full projects to be approved by the GEF Council, the main administrative body.

The GEF is the only entity specifically created to foster the kinds of local and regional development that will also pay ecological dividends for the entire planet. No other international effort makes the connection of acting locally and globally at the same time. Yet, the Facility is still young with a comparatively short track record; most of the projects begun during the pilot phase (1991 to 1994) have not yet been completed. Evaluating the full scale of their impact on the global environment will therefore take some time, but a monitoring and evaluation programme has begun to define specific indicators of progress and quantify the benefits. The ultimate goal remains to secure ecological dividends for the planet's future well-being.

Portions of this article were adapted from The Global Environment Facility: A Self-Assessment and the GEF 1996 Project Implementation Review.

For further information on the Operational Programs, please contact the GEF Secretariat, 1818 H Street, NW, Washington, DC 20433 USA. Fax: 1-202-522-3240/5.URL:www.worldbank.org/html/gef



Complementary articles in other issues:
Mohamed T. El-Ashry: Energizing change (Climate & Action) 1998


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