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'Establishing the Global Environment Facility'

Some sort of fund was needed to persuade Southern governments to agree to the conservation and constraints on their national development implied in the Conventions. The Northern donors did not however want to become liable for all the potential costs arising from the treaties, nor to put more money into the United Nations (UN) system - with its relative accountability to Southern governments and ‘inefficient’ political debates and processes. The rich Northern governments also wanted to reform existing international institutions to be more efficient - but without alienating their allied banks and corporations by regulating the terms of global trade and investment for the sake of environmental protection.

The UN-hosted Multilateral Fund for the Montreal Protocol (1987, to counter depletion of atmospheric ozone) had set a precedent for global environmental finance that was not welcomed by the major donor government treasuries, because it allowed all governmental participants in the Protocol a say in spending its funds. When it came to financing the Climate and Biodiversity Conventions - far more politically loaded and complex issues to deal with than ozone - the donors ignored the Montreal Protocol’s effective precedent to deny the new Conventions their own funds and instead establish a GEF under the World Bank’s legal authority. Building on their reputation for political conservatism, the Bank promised its major donors a ‘business-like’ approach to ‘valuing the environment’ and financing ‘sustainable development’.

In the lead up to Rio, the quietly established GEF attracted opposition from Southern governments and non-governmental organisations (NGOs) mistrustful of an opaque entity, a fait accompli based in a World Bank accountable to ‘donor’ rather than ‘client’ governments, let alone environmental science or popular movements.