I first engaged with the Global Environment Facility  (GEF) in 1994 as part of the evaluation team for the GEF pilot phase― a US$1 billion pilot hosted by the World Bank that began in 1991, prior to the Rio Earth Summit. In May, along with a small group of World Bank colleagues, I found myself at the Fourth GEF Assembly in Punta del Este, Uruguay. In reflecting back over the intervening time period I find nuggets of success, but also much remains disturbingly unchanged.
The single overwhelming cause for celebration has been the announcement―dramatically achieved only a few weeks ago―of a GEF replenishment of more than 50% to US$4.2 billion (US$3.5 billion in new funding). Any increase is obviously welcomed in a period of fiscal austerity, and most government representatives understandably expressed congratulations. However, a few couldn’t help but note that the increase was disturbingly small if measured by the increase in the range of problems to be addressed. There is a much greater sense of urgency (especially with respect to climate change), and many more agencies involved in channeling funds (originally only the World Bank, the UN Development Programme (UNDP), and the UN Environment Programme (UNEP), and now there are more than 10).
A key motivation for the creation of the GEF was to have a single fund for global environmental problems. Although the 1992 Earth Summit in Rio focused primarily on two problems – climate change (mainly mitigation) and biodiversity – there was a recognition that problems were cross-cutting and to be effective and efficient, solutions needed to be cross-cutting too. The linkages between biodiversity, climate change, marine pollution, tropical deforestation have become much more compelling with increased scientific understanding. Yet for the most part, we (at the World Bank Group) and the GEF have made only limited progress in stepping out of our silos and looking at the problem from a broader perspective (the fact that our Environment and Energy strategies are moving ahead on parallel tracks provides yet another test of our ability to work across departments). The GEF continues to be associated with multiple treaties – climate, biodiversity, land degradation – for which it serves as the ``financial mechanism’’. This fractures its vision of sustainable development, limiting opportunities to conceive of broader, more creative solutions.
One GEF success story is the small grants program, a system of country-administered grants typically given in tens of thousands of dollars for projects by civil society organizations. This program gives the GEF a sense of energy and creativity – something which is way more difficult to achieve with government programs.
One area that needs more progress is the level of private sector engagement. The business community is notably absent from the GEF Assembly and funding for a private sector program, pending an evaluation and Council review, has been further delayed.
Another concept that was commonly heard in Punta del Este but rarely discussed 15 years ago is the increasing relevance of “South-South” sharing of lessons and capacity. Indeed, the line between north and south is arguably becoming progressively less meaningful, as China, India, Brazil, and other "recipient" countries become providers of technology and know-how. One of the more interesting documents shared at the Assembly was an assessment of GEF projects prepared by the Government of China.
While the future and continued significance of the GEF was assured for at least another four years (the length of the GEF replenishment), the discussion in Punta del Este was widely seen as a precursor to those in various fora where finance for global environment in general, and climate change in particular will be discussed this year. Watch this space.