The Global Environment Facility (GEF)

Links:

Global Environment Facility Web Pages GEF - A Self Assessment Functioning of the GEF - A Critique Funding Since Rio

THE GEF -- WHAT IT IS, WHERE IT CAME FROM:

The Global Environment Facility (GEF) was launched in 1990 as a three-year pilot project operated by the World Bank in cooperation with the United Nations Environment Programme (UNEP) and the United Nations Development Program (UNDP).

In principle, the GEF provides grants and technical assistance to Southern countries in four areas: global warming, pollution of international waters, destruction of biodiversity through degradation of natural habitats, and ozone destruction.

The GEF is chaired by Dr Mohamed T. El-Ashry, Director of the World Bank's Environment Department.

GEF funds totalled $1.3 billion at the end of 1991.

GEF REFORM AT THE EARTH SUMMIT

The World Bank has a disastrous environmental record. It is unaccountable and secretive. The consultation process it has set up has already failed (see section below). Yet at present the World Bank directly controls 60 per cent of GEF projects. Instead of functioning as an independent facility, it is clear that the GEF is being used to temper environmentally destructive World Bank loans. UNCED Secretary-General, Maurice Strong, agrees that the World Bank has to be reformed but he rejects anything but World Bank control of the GEF. The World Bank must not control funds for the global environment otherwise governments will be wasting their resources and perpetuating a bankrupt development model.

THE WORLD BANK AND GLOBAL WARMING

The World Bank is the largest source of energy finance worldwide, loaning billions each year for projects which exacerbate global warming. Yet:

• The Bank has no policy on global warming.
• During the 1980s, only one per cent of all energy sector lending went towards energy efficiency. Most of that was spent on studies.
• A 1991 report on the Bank's energy sector spending showed that it spent: 40 per cent on gas and oil development; 16 per cent on coal; and most of the rest on electrical transmission from fossil fuel-powered generators.
• The 1991 report also shows that between now and 1996, $1.2 billion will be spent on coal development and over $2.2 billion on gas and oil development. The report does not mention global warming or climate change.
• In its draft World Development Report 1992, the World Bank downplays the risks of climate change, claiming that: "global warming will impose costs 60 years from now that are equivalent to about 1 per cent of world GDP".

THE WORLD BANK IN ACTION. SOME CASE STUDIES:

Greenpeace has continually warned that the World Bank is not an appropriate institution to administer any funds that might be agreed at the Earth Summit.

The Bank's institutional flaws and philosophy of development have resulted in a highly questionable environmental record. For example:

• In the Philippines, the World Bank is spending $30 million through the GEF on a geo-thermal energy project on the island of Leyte to help reduce CO2 emissions from potential coal-fired power plants. But the GEF grant is tied to a proposed $350 million World Bank loan to the Philippines state power company for a $1.5 billion project. The GEF funds have been dumped into this on-going project and will result in no overall CO2 reduction or positive environmental impact. There have been no consultations with local residents. (Source: Global Environment Facility, Global Environment Facility First Tranche Work Programme, April 1991)
• In the Congo, a proposed $20 million World Bank loan to make rainforest timber a major foreign exchange earner which will therefore accelerate accelerating logging in Congolese primary tropical forest, has been "balanced" with a GEF loan of $10 million to "protect" an pristine rainforest in another area.  According to a UNDP Technical report, the GEF project will finance a 25-kilometre road that will open up the forest to tourism and other exploitation. (Sources: Environmental Defense Fund, Washinton DC and United Nations Development Programme).
• Since 1986, the World Bank has increased its environmental staff from five to nearly 80 (out of a staff of over 6,000).  
• The development philosophy of the World Bank was highlighted in the internal memo written by its chief economist, Lawrence Summers, earlier this year. Commenting on world trade policy, he wrote: "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (less developed countries)?"

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