Global Environment Facility

The Global Environment Facility (GEF) began operations in 1991 as a three-year pilot project sponsored by the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), and the World Bank. The first meeting of the three agencies took place in December 1990. The Executive Directors of the World Bank adopted Resolution No. 91-5 on March 14, 1991, thereby legally establishing the Global Environment Trust Fund (GET), with initial funding of $1 billion, which was pledged by industrialized and developing countries. The first Participants meeting took place in May of 1991. A Tripartite Agreement signed by the three cosponsoring agencies on October 28, 1991, formalized the governance and operational mechanisms of the GEF.

The purpose of the GEF is to assist in the protection of the global environment and to promote environmental sustainable development. Specifically, it provide[s] new and additional grants and concessional funding to cover the 'incremental' or additional costs associated with transforming a development project with national benefits into one with global environmental benefits (GEF website, June 18, 2012). Countries can obtain GEF funds if they are eligible to borrow from the World Bank or receive technical assistance grants from UNDP. Investments initially took place in four areas of global interest, or focal areas: international waters; biodiversity; climate change, and, under the terms outlined in the Montreal Protocol (MP), the layer of stratospheric ozone. Later, the areas of land degradation and persistent organic pollutants would be added.

Initially, the World Bank undertook the Chairmanship of the GEF; the director of the Bank's Environment Department (ENV) served as Chair. A GEF Administrator's Unit (ENVGE) was created in 1991 in the Environment Department as was the Global Environment Unit (ENVGC) which would coordinate GEF-related projects implemented by the Bank and conduct other related activities. The Bank's initial activities included: serving as Trustee and administrator of the GEF; encouraging inclusion of GEF investment areas in national environment programs of recipient countries; managing the project cycle for investment projects; and organizing GEF project identification, appraisal, and supervision processes with other agencies.

At the conclusion of its pilot phase in 1994, the GEF was restructured and moved out of the World Bank system to become a permanent, separate institution. As part of this restructuring, the involvement of developing countries in the decision-making process and implementation of projects was enhanced and greater transparency was achieved. At this time, the GEF became the financial mechanism for both the United Nations Convention on Biological Diversity and the United Nations Framework Convention on Climate Change. In partnership with the Montreal Protocol of the Vienna Convention on Ozone Layer Depleting Substances, the GEF also started funding projects that enabled countries to phase out their use of ozone-destroying chemicals. Later, the GEF was selected to serve as the financial mechanism for two more international conventions: the Stockholm Convention on Persistent Organic Pollutants in 2001 and the United Nations Convention to Combat Desertification in 2003.

The governance structure of the GEF includes: an Assembly of all participating countries which meets every three to four years and is responsible for reviewing and evaluating the GEF's general policies, the operation of the GEF, and its membership; a Council, which acts as the main governing body of the GEF and is responsible for developing, adopting, and evaluating the operational policies and programs for GEF activities; and a Secretariat, which services and reports to the governing Council and the Assembly and is functionally independent but is supported administratively by the World Bank. Among the Secretariat's major functions are:

• implementing the decisions of the GEF Assembly and Council;

• coordinating the formulation and overseeing the implementation of program activities pursuant to the joint work program;

• ensuring the implementation of the operational policies adopted by the council through the preparation of common guidelines on the project cycle in consultation with implementing agencies; and

• reviewing and reporting to the council on the adequacy of work programs made by the implementing agencies in accordance with the guidelines referred to above.

Its business activities include: external/corporate relations; policy development; operations and business strategy; monitoring and evaluation; GEF Council and Assembly activities; annual reporting; communications and outreach; and administration.

As of 2012, the GEF involves 182 participating countries and various international institutions, civil society organizations, and the private sector. In addition to the World Bank, UNDP, and UNEP, GEF has seven other implementing agencies responsible for creating project proposals and for managing GEF projects. The World Bank continues to serve as the GEF Trustee; as such, it mobilizes resources for the GEF Trust Fund and manages the Fund. It also seeks to mobilize resources from the private sector that are consistent with GEF objectives and national sustainable development strategies. The UNDP is responsible for technical assistance activities and capacity building and helps to identify projects and activities consistent with the purpose of the GEF and national sustainable development strategies. It is also charged with running the Small Grants Programme for non-governmental organizations (NGOs). The UNEP is responsible for catalyzing the development of scientific and technical analysis and advancing environmental management in GEF-financed activities. It also manages the Scientific and Technical Advisory Panel (STAP), an independent advisory body that provides scientific and technical guidance to the GEF.