D+C Development and Cooperation (No. 3, May/June 2002, p. 18)

The Rio 'Earth' Summit in 1992 was also about money. Sustainable development has to be financed, especially in the countries of the South. But the industrialised nations' only concrete pledge was the Global Environment Facility (GEF). The facility funds measures in developing and transformation countries to implement the Rio conventions on climate protection (UNFCC) and biological diversity (CBD), as well as activities to protect the seas and the ozone layer.

The fund was launched in 1991 by France and Germany as a gesture of goodwill but also as a counter-concept to an independent 'Green Fund', which some developing countries favoured. Under pressure from the USA, the GEF secretariat was located at the World Bank in Washington. It administers the money and makes grants and low-interest loans which often are tied to projects it finances itself. The United Nations development and environment programmes, UNDP and UNEP, participate as 'junior partners'. UNDP is responsible for, among other things, technical cooperation and capacity-building, and UNEP for scientific consultancy, for which a scientific advisory panel (STAP) was appointed. In addition, implementation of projects, as well as other activities, are carried out by regional multilateral development banks, other UN agencies such as the Food and Agriculture Organisation (FAO) and the Industrial Development Organisation (UNIDO), government institutions and NGOs, and private sector companies, whose participation is expected to provide additional funds.

In 1994, after completion of a three-year pilot phase, 34 donor governments, mostly in industrialised nations, pledged an initial US$ 2 billion for the GEF. In 1998, 36 nations pledged $2.75 billion for the period 1998-2002 to protect the global environment and promote sustainable development of which 750 million were funds not spent during the previous period. Compared to the financial requirements required for implementation of the Agenda 21, the action plan agreed in Rio, that is 'peanuts'.

According to the GEF secretariat, almost 850 projects in about 150 countries have been implemented to date. Most of the money, in equal parts, has flowed into the sectors of climate - where the focus is on measures for efficient use of energy and renewable energy - and biodiversity. Projects include waters management, studies and the building-up of institutions in the environmental sector, and financial support for companies in converting production or products to meet approved environmental standards. The projects should above all be innovative and flexible and demonstrate and make marketable solutions oriented on the needs of the recipient countries. However, in view of the limited funds available, their short-term impacts, such as reducing greenhouse gases, can only be slight, as a GEF report admitted in 1999. "Instead, GEF promotes the development and use of technologies which present long-term answers to the problem of climate change," it said.

Developing countries have long complained that the money available to them is not enough to fulfil the manifold tasks assigned them by the GEF. African countries in particular also are unhappy that so far measures under 'their' Convention to Combat Desertification (UNCCD) have largely gone without. One reproach is that the GEF's fields of action reflect above all the industrialised nations' self-interests, such as climate protection and biodiversity. The critics say many projects are more 'donor-driven' than meant for the recipient. Korinna Hort, of the American Environmental Defense Fund (EDF), adds that assigning the GEF to the World Bank "set the fox to keep the geese". She says that due to its structural adjustment policy and large-scale projects the World Bank itself contributes to environmental problems, which the GEF is supposed to tackle. "The facility can do little to reduce global environmental problems so long as there is a lack of political will to change the structures underlying unsustainable development."

Poker game on replenishment

Negotiations have been going on since October 2000 on replenishing the GEF's coffers for the third phase (2003-2006), a sum which its secretariat says should total up to US$ 3.5 billion. For with measures to implement the 'Desert Convention' and the UN convention adopted in Stockholm in May 2001 on reducing persistent organic pollutants (POPs) such as DDT, PCBs, dioxins and furans, the GEF was assigned additional areas of responsibility. The USA, the biggest and most influential donor, is still holding back on pledges, but it is not alone. The German government, or the Federal Finance Ministry, is willing to agree to raise their contributions by 20 per cent, if the other governments follow suit.

The poker game on topping up the GEF has long been one of the issues to be negotiated in reforming international development financing. The replenishment negotiations will indicate the extent of the industrialised nations' willingness to provide the developing countries with more money.

At the same time, the GEF is an important building block of a future global environmental organisation of the United Nations, the forming of which is under intensive discussion. Among other proposals, upgrading and strengthening the UNEP and entrusting it with coordinating all activities of the international agreements on the environment has been mooted. The future of the GEF is thus a touchstone of the further prospects for international environmental and development policy - 10 years after Rio.