The Global Environment Facility
The First Ten Years – Growing Pains or Inherent Flaws?

a report by environmental defence and halifax initiative - August 2002

2. History, Governance, Operations and Results

Contributions to the GEF are based on the size of a country's economy using an agreed 'burden-sharing' formula. As a result, the United States theoretically contributes the most at 15 per cent followed by Japan (10 per cent) and Germany (9 per cent). In practice, however, contributions reflect political will more than agreed formulas.

By establishing the GEF prior to the 1992 Rio Earth Summit, G7 governments were able to pre-empt multilateral debate and seize the environmental agenda. Southern governments had been expected to present alternative "green funds" proposals in Rio. With the arrival of the GEF, already established and with new and substantial finance paid in, these more radical, yet unfunded, proposals were sidelined.

Through the GEF, G7 governments were able to define "global environmental problems" as they perceived them and limit their financial responsibilities for solving them. The G7 used an “incremental cost principle” to define the limits of funding. The GEF was to pay only for project costs that benefited the global environment, not the local environment. Donor governments view global environmental problems as technical problems, solvable with technical fixes. The underlying economic, social, political, and institutional causes of environmental destruction are not examined at the GEF (See Section 3).

Because they had no role in its establishment, the feelings of Southern governments toward the GEF ranged from ambivalence to hostility.