Funding for the global environment : determined by national or common objectives : a case study of the GEF negotiations

Funding for the Global Environment - Determined by National or Common Objectives? A case study of the GEF negotiations. The GEF is a newcomer on the international scene, but has been the object of intense attention during the 7 years since its inception. It was originally set up as a pilot project mechanism for funding projects which benefit the global environment within four focal areas. However, in the wake of UNCED, it was restructured to enable it to become the financial mechanism of the climate and biodiversity conventions. We have analysed the intergoverrunental negotiations which led to the establishment of GEF, as well as those which led to its restructuring The theoretical framework for this analysis has been a model of the negotiations which has drawn on the "realist" theoretical school. We have analysed the outcome from a perspective of the distribution of power between involved actors, within the negotiation context and -process. This analysis leads to certain hypotheses about what the negotiation outcome would be. The first round of negotiations were analysed from such a perspective, and we concluded that the developed countries and the World Bank were the dominant actors in the process, and that the GEF Pilot Phase very much reflected their priorities. With regard to the restucturing negotiations, we introduced a new perspective, called "idealism", which assumes that common objectives would determine the restructuring of GEF. The common objectives were operationalised as recommendations from the lndependent Evaluation of the GEF Pilot Phase. Assuming that the restructuring was determined by common objectives led to very different hypotheses about the outcome than a realist perspective would lead to. The analysis, however, showed that the Independent Evaluation only influenced the restructuring process on the margin, and that national objectives were dominant. The Independent Evaluation was presented very late in the restructuring process, and had a limited impact. However, after the formal negotiations were completed, several of the recommendations from the evaluations have been taken up and implemented by the new GEF Council. Thus, the various issues could be grouped according to their importance to the governments and how controversial they were. The most important and controversial issues were dealt with in the negotiations and the outcome largely decided by power politics, while less important and/or less controversial issues were deferred to the new council to be dealt with in a less politicised and hurried atmosphere. Generally, issues to do with mandate and governance structure belonged to the fonner category, while questions of operational strategy and modalities belonged to the latter. The GEF is a compromise between the UN and the Bretton Woods governance models, and also between a strategy focusing on economic efficiency (cost-efficient project portfolio) and one focusing on political effectiveness (gaining political support for its goals). We argue that GEF has been moving closer to the latter ideal model. This may be a political necessity, but may lead to the illusion that we have an institution sufficiently equipped to deal with global environmental problems, which we do not. National policy refonn will remain the most impo~tant means to solve global environmental problems, but also on the international level suppl em entary measures to GEF are needed. As en epilogue, we have taken a look at the main future challenges for GEF. The main challenge lies in the combination of lack of additional funding and a forecast of a lower level of replenishment for its next 3-year period. This combination may undermine its political viability in developing countries. Other, yet unsolved challenges, regard how to leverage additional funding from external sources, especially the private sector; how to establish effective mechanisms for learning and replication; how to increase the effect of projects by encouraging policy refonns in recipient countries; and how to influence the general development approach of its implementing agencies, in particular the World Bank