2 IDENTIDAD INSTITUCIONAL
2.2.3 CONFORMACIÓN DEL GOBIERNO ESCOLAR
The GEF was created in 1989 by developed countries, following a suggestion by the Prime Minister of France at a meeting of the World Bank and IMF to create a voluntary fund dedicated to the environment. From the beginning a decidedly donor-led project, developed countries were supportive of the fund’s creation in advance of the 1992 Rio Conference on Environment and Development (UNCED) in order to pre-empt other funding proposals that may emerge (Boisson de Chazournes 2005, p. 193). The prospect of deciding on institutional arrangements for finance as part of the three conventions to be agreed at the UN Conference on Environment and Development (UNCED) in 1992 led developed countries, developing countries and the GEF itself to position themselves in advance of the Rio conference. In early climate change conferences such as Noordwijk in 1989, developed countries showed early momentum towards using an existing financial institution for climate finance, a position that developed countries would maintain but which would become increasingly at odds with the perspectives of the South (Bodansky 1993, p. 468).
Many developed countries were unwilling to entrust their financial contributions to a new and unknown “green fund” that would potentially be under greater control by developing countries (Bodansky 1993, p. 538). Although the GEF was still in a pilot phase, developed countries chose to stand firmly behind it as the entity that should be designated as operator of the financial mechanism and sought to reinforce the “reality” of its broader international role and the importance of ensuring its success (Rahman and Roncerel 1994, p. 260). There is evidence that the US government’s internal plan was for the GEF to be selected as the sole channel for funds under the UNFCCC and that while its governance should be made more representative, control over funding decisions should remain with the World Bank (Goldemberg 1994, p. 181).
In contrast, developing countries called repeatedly for creation of a new and independent “green fund” that would include separate funds for each of the UNCED conventions and avoid the inequities and donor-dominated governance associated with the World Bank and other Bretton Woods organisations, while ensuring oversight from and accountability to the COP (Hyder 1994, Sjöberg 1999). Throughout the negotiations leading to UNCED, Southern governments sought consistently to prevent identification of a specific institution, with NGOs expressing their belief that the North would ‘use the GEF as a new
strategic device to shift responsibility for past and present damage to the climate system onto the Southern countries’ (Rahman and Roncerel 1994, p. 260). The GEF appeared to many in the South as a tactic to prevent the creation of a new “green fund” and broader democratisation of the global economy and international financial institutions; responding to the prospect of GEF selection, developing countries argued for far-reaching changes that would make it more like the “green fund” that they championed simultaneously (Sjöberg 1999).
The World Bank and GEF, meanwhile, both had a change of leadership in 1991, which led to realisation within the institution’s leadership that its longevity required connections with the UNCED process and, in turn, sensitivity to the need for changes in its operations in order to facilitate these connections. The GEF positioned itself to be ready and able to become the preferred mechanism for the UNCED connections, with the administration making clear its openness to reforms and extending its mandate to cover desertification, in an effort to respond to developing country demands (Sjöberg 1999). Donor countries agreed to greater transparency and more equitable representation in order to ensure the GEF would be in a favourable position in advance of the UNCED conference (Jordan 1995), but, crucially, ‘the fact that the GEF was to be based on voluntary contributions and was being established at that time without any legal link or obligation to the Convention, gave donor countries the upper hand in the final decision’ (Gomez-Echeverri and Müller 2009, p. 2).
Within the negotiating process, donor countries refused to accept a new arrangement specific to the UNFCCC and recipient countries refused to accept the GEF as a permanent solution, continuing to advocate a “green fund” even though it was clear that this had no viability (Dowdeswell and Kinley 1994, Sjöberg 1999). The issue was only solved in the final round of negotiations before the UNCED, with disagreement resolved by using the word “interim” to sidestep developing countries’ concerns about the involvement of the World Bank and GEF (Gupta 2014, p. 60). The associated compromise entailed the COP controlling policies, programme priorities and eligibility criteria for funding, while the GEF would have more transparent governance and equitable representation with regular reporting to the COP (Dasgupta 1994). The strength of US emphasis on the GEF was so strong that this interim designation was one of the reasons behind an initial refusal by the US to sign the Convention (Brown Weiss 1992, p. 817). The final agreement of developing countries was also induced by the World Bank’s idea to add additional “Earth increment” funding on top of its next replenishment process, accompanied by positive statements from developed countries about willingness to increase their contributions (ENB vol. 2, nos. 5 & 9). This package convinced developing countries that “new and additional” funds would be
forthcoming, but ultimately these elements were a vague part of the UNCED deal (Sjöberg 1999, p. 23) and subject to considerable subsequent influence within the UNFCCC policy process.
In the final Convention text, Article 11.1 states that the financial mechanism ‘shall function under the guidance of and be accountable to the Conference of the Parties, which shall decide on its policies, programme priorities and eligibility criteria related to this Convention. Its operation shall be entrusted to one or more existing international entities.’ The direct reference to use of an existing entity ‘set an important precedent in entrusting the fundamental responsibility to an institution somewhat separate to the Convention’ and outside the UN (Dowdeswell and Kinley 1994, p. 124), potentially indicating the origin of a path dependence. However, Article 11 provided no clarity on how the relationship between the COP and the GEF would be structured and how COP modalities and procedures would ensure that funded projects conform with COP guidance (Bodansky 1993). This immediately opened up an important space within the policy process for ongoing North-South debates over oversight of the GEF and its operations; Bodansky (1993, p. 541) also notes that the US successfully opposed a proposal by AOSIS to include an explicit reference to funding adaptation costs in Article 11. This was in line with donor country preferences (and GEF policy) that the GEF should concentrate on funding projects with global benefits, i.e. mitigation, rather than the local or national benefits that principally result from adaptation projects, and is significant as the origin of a North-South struggle within the UNFCCC for adequate attention to adaptation funding that contributed to the later creation of the Marrakesh funds and the GCF.
Article 21.3 of the Convention designates the GEF as the interim operating entity of the financial mechanism and includes a direction that the GEF ‘should be appropriately restructured and its membership made universal to enable it to fulfil the requirements of Article 11’. While this latter clause can be seen as a response to G77 pressure (Hyder 1994, p. 216), the Convention offers no clarity or direction on what the reforms will entail or what must be achieved to constitute “appropriate” reform. The Agenda 21 document, a non- binding framework for sustainable development also agreed at the UNCED, provides some additional detail but this is limited to ensuring predictable, new and additional resources and broadening the scope of the GEF, rather than specific measures or requirements (UNCED 1992). Once again, this ambiguity in the Convention played a role in securing agreement at UNCED but left the final institutional design unclear and did not provide a robust means to ensure the COP could actually ensure the GEF would be reformed to any significant extent or in line with developing country priorities. Overall, the Convention facilitated the inclusion of the GEF in the financial mechanism, a key priority for developed
countries, and important policy features concerning the linkage between the GEF and the UNFCCC, the manner of COP oversight and the practical details of GEF operations were left open to the influence of further North-South negotiation in the policy process.