Critics question the degree of democracy and transparency involved in the Global Environment Facility's horsetrading of power between the North and the South

-- THE emerging rule today ironically seems to be that those who make a mess, will be paid to clean it up rather than obligated to undo the harm they have caused and cease committing further damage. International aid agencies look towards the timber industry to help preserve forests; the us defense department is given responsibility for cleaning up the toxic mess it has spilled the world over; and market forces that have fuelled environmental destruction, are touted as best hopes for generating environmental restoration. So, little wonder that rich countries of the world are tilted in favour of the World Bank (wb), one of our greatest environmental desecrators.

While many Northern ngos are generally pleased with the way the new Global Environmental Facility (gef) is veering, Southern ngos remain highly sceptical. The reasons: dangers of the Bank culture unduly influencing the gef, an unequal gef agenda limited to four issues -- climate change, ozone depletion, biodiversity and oceans -- excluding key environmental concerns of the South, and doubts about the gef's very mission. Although the gef Secretariat is independent and reports directly to the gef Council, it is housed in the wb which is the Facility's dominant implementing agency.

While Southern nations have been reiterating the need for appropriate aid policies, technology transfer and assistance since the '70s, the more proximate origin of the gef was the 1987 Brundtland Report, product of the World Commission on Environment and Development. About the same time, India too, had proposed a Global Green Fund supported by g-77 countries. In 1991, the gef was launched as a pilot programme with a view to set up a 'green window', a joint project of the un Development Program, the un Environment Program and the wb.

Because of the close relations between the Facility and the wb, environmentalists reacted sharply to the gef's formation. Complaints notwithstanding, in 1992, the Rio Earth Summit provided the Facility a huge boost. With calls that the Northern countries should shower us $120 billion annually in additional aid on Southern nations, aid-talk reached a crescendo. However, very little of the money promised at Rio materialised, and aid contributions to plummeted in the following years. In 1994, the pilot phase of the gef came to a conclusion, and the Facility was restructured. While not all ngos are rhapsodic about the end result, most agree the restructured gef sets a relatively higher standard for international financial institutions in terms of openness, ngo and community involvement and Southern influence.

One serious problem for ngos, especially non-North American and non-western European, is that while the gef funds them to attend governing council meetings, it does not provide resources for regional ngos to communicate with each other and to develop common positions. With no money to distribute information, says Toni Vidan of Green Action Zagreb in Croatia, "It is impossible to be representative." He had lobbied for ngos of his region to enable them to attend gef Council meetings.

But in matters of project implementation, some of the larger environmental organisations -- including the World Conservation Union (iucn) and the World Wide Fund for Nature (wwf) -- are so involved, that there is some concern that they have been coopted by the system, unwilling to take on an institution that is providing them with substantial funds. Currently operational in 33 nations, a gef Small Grants Program funds ngo-designed projects. There is a us $50,000 ceiling for national and a us $250,000 ceiling for regional projects. However, Glenn Prickett, director of policy for the us-based Conservation International, says that while "in principle (the danger of cooptation) is always there, in practice it has not played out".

One of the most controversial gef projects with respect to local participation has been the Tana River National Primate Reserve project in Kenya. The reserve houses the endangered Red Colobus and Crested Mangabey monkey and is also home to the Pokomo people. gef staff and iucn representatives contracted to study the reserve concluded that the reserve could not sustainably support both the simians and the humans. The initial gef project called for forced resettlement of the Pokomos, generating controversy. The gef suspended the project in 1993, giving in to the protests.

Myopia as usual
Southern ngos have criticised the gef's definition of 'global'. Ricardo Carrere of Institute de Tercer Mundo, Uruguay, maintains that biodiversity preservation is a local issue, although affected by global policies and requiring global solutions. The emphasis on North-defined 'global' issues, which excludes problems like desertification (a pressing problem in Africa), symbolises the Northern dominance of the gef structure, feels Grace Akumu of the Nairobi-based Climate Action Network Africa.

Even stronger scepticism persists among ngos about the facility the gef provides, guided by the principle of 'global increment'. Bequeathed to the gef by the Climate Change and Biodiversity Conventions, the global increment concept, say critics, forces the gef to misprioritise projects and give the facility far too much wiggle room in choosing projects.

The East African Wildlife Society, a Kenyan ngo, denounced the project and helped publicise the Pokomos' concerns. "This has been a project of non-consultation, non-involvement, non-coordination and non-communication with local communities and local leadership," the society's director Nehemiah Rotich said in 1994. Agi Kiss, wb task manager for the Tana project, however, insists that the protests were entirely misdirected. Now, after five years of preparation and consultation with the community and Kenyan ngos, the project has been resuscitated envisaging voluntary resettlement and formation of a joint reserve management committee to include conservation officials as well as two elected community members. The gef plan includes a research component to consider the compatibility of the primates with humans in the reserve. Kiss expects the research to show that the monkeys will not be able to coexist with humans inside the reserve. This means that ngo and local opposition to gef plans is likely to explode again. One gef project that has fuelled the environmentalists' fears about the wb's evil shadow is a wildlife and protected area conservation scheme in Laos. The project is being designed against the backdrop of the us $1.2 billion Nam Theun ii hydroelectric power development scheme aided by the wb. The dam is expected to generate the usual problems: displacement of thousands of people, flooding of important ecosystems and gambling away of the country's development prospects. Initially, the gef's plans were to designate, establish and manage a number of protected areas to be flooded by the dam. These have now been excluded from the gef's scheme with activists charging that the gef altered its plan to avoid confrontation with the Bank. Noting that the first round of gef-financed projects are nearing completion only now, Hutton Archer, senior external relations coordinator of the gef Secretariat, and spokesperson, says the gef has undertaken an evaluation process that should be completed in a year's time.

The 'global increment' is a fuzzy concept which refers to the cost of an environmental project attributable to effforts to promote the global environment, rather than just the national environment or other national interests. Dilip Ahuja, gef environment specialist for climate change, illustrates the concept through an example. Currently, Malaysian loggers pull cut trees out of the forest by canals which rip through the forests and fragment the habitat of an endangered rhinoceros species. The loggers could instead pull the trees out through diesel-powered tramlines that would be less destructive of the overall ecosystem than the canal system.The gef, on its part, could fund the additional or incremental cost incurred. Ahuja believes, the global increment notion is a powerful one that "has great potential to change the way things are done in the whole sustainable development arena". Ahuja's assurance notwithstanding, in practice the global increment presents numerous difficulties.

First, it prevents the gef from funding cost-effective projects from a national perspective, even if these may offer the largest and most immediate global benefits. For example, the gef will not fund a shift from incandescent to fluorescent street lights -- despite the energy-saving (and thus climate-changing) benefits of such a shift -- even if energy saving would pay for the cost of the new lights. As Reframing the Green Window, a 1994 report jointly issued by the us environmental organisations Conservation International and the Natural Resources Defense Council noted, the Intergovernmental Panel on Climate Change has concluded that highest priority measures for the loop to reduce greenhouse gas emissions are those "beneficial for reasons other than climate change and beneficial in their own right".

The gef premise that societal wealth is allocated with perfect economic rationality, and that the occasional deviations from rationality can be rectified by a simple "removal of barriers", is, however, false. There are countless, dramatic examples of nations failing to undertake rational investments. Refusal to invest in energy efficiency, education and health are but a few examples. Some of the 'barriers' to more rational decision- making include the inability of defined, private interests to capture the benefits of the investments, and the outright opposition of certain forces with special economic or political influence.

A second criticism of the global increment concept is that it encourages Southern countries to purchase inappropriate Northern technology. There is little doubt that the Northern countries justify their gef contributions, like other aid donations, at least in part on the grounds that it will result in purchases in Northern-made products. "There are a range of technologies and business interests that American firms are superbly positioned to take advantage of, as nations seek to enhance efficiency and deploy new technology in service of economic and environmental goals," Rafe Pomerance, us deputy assistant secretary of state, told a us congressional committee arguing for the us to fully meet its gef financial commitments.

A third problem is that the global increment concept prevents the gef from funding the projects championed by developing countries. Sustainable development projects will work out best when local interests agree to shepherd projects which are perceived to advance their interests. That is why the gef is supposed to encourage national 'ownership' and to ensure that its project selection is 'country-driven'.

These internal contradictions of the gef are not just of academic interest. In order to justify biodiversity protection projects under the global increment concept, the benefits of biodiversity conservation must be defined as 'global'; if they are considered local, then the national benefits of biodiversity projects may outweigh the national costs, taking them out of the the gef arena. Thus, the global increment concept directly undermines national and local ownership of biodiversity projects -- a necessary condition to their success.

As Reframing the Green Window explains, "Utilization of biodiversity principally provides national, regional and local benefits, not in the future, but right here and now. The incremental costs concept is therefore at cross purposes with the overall goal of biodiversity conservation, and winds up perpetuating the belief both in international development institutions and in developing countries themselves that biodiversity conservation may not be in their national interest."

An effective gef policy on biodiversity would take exactly the opposite track, contends the report: "The gef needs to be at the forefront of a movement to integrate biodiversity into the mainstream of development, not be associated with a philosophy that insures its continued marginalization and puts a premium on short-term conservation measures designed to show global benefits." For all the criticisms of the global increment concept, it is not clear how rigorously it is applied in practice. In its review of six projects, Reframing the Green Window concluded that the concept "is applied irregularly." "The concept is not workable," says Vidan of Green Action Zagreb. Vidan complains that the only tangible effect of the concept is to ensure the gef will not fund energy efficiency projects, including those of highest priority in the heavily polluted eastern Europe.

Even Archer acknowledges the difficulties the concept faces in practice. "Let's be honest about this -- we are all learning in the process," he says, noting particularly the difficulties in employing the concept in the biodiversity area. Perhaps the most sanguine assessment of the global increment idea is offered by Prickett: "At the time (of the environmental conventions negotiation), it made sense from a political perspective." It was a deal between the South which wanted money, and the North which did not want to provide any, he says, which from a technical viewpoint, "does not make real sense".

Environmental muckraking
It is the ngo challenge to the gef understanding of the "environment" which is the most damning. Environment, say the most perceptive Southern and Northern ngos, cannot be separated out from the rest of the society and global economy.

"In this regard, there exists a clear contradiction in the position of many developed countries involved in the gef," comment Latin American ngo contributors to The Southern Green Fund: Views from the South on the Global Environment Facility -- a 1993 wwf report containing a compilation of Southern ngo views on the gef. The gef, they write, "pretends to offer financing for actions to conserve biological diversity, while at the same time encouraging indiscriminate international trade, knowing that this pressurizes the biodiversity and natural resource base of developing countries".

The proper approach to preserving, say, a biologically rich forest, is not to set up a fence around its borders, argues Ricardo Carrere, but to alleviate the causes of human encroachment. Those causes are far outside the gef-defined sphere of the 'environment'. However, a root cause approach to biodiversity preservation would require addressing the following: Third World indebtedness and the need to expand exports for generating income to pay off debts; the wb and the International Monetary Fund structural adjustment policies that encourage countries to orient their economies towards exports; trade liberalising treaties which prohibited countries from conditioning exports of natural resources on local processing; the power of unaccountable multinational resource corporations; the wb penchant for inappropriate megaprojects; unequal land distribution in Third World countries which provokes the landless to invade protected lands and the Northern consumer demand for wood, minerals and oil located in biodiverse regions.

In short, says Ricardo Carrere, preserving biodiversity would require "changing the rules of the game -- which Northern governments are not interested in doing at all". The climate change issue is partially immune to this criticism because many critical energy efficiency reforms are cost-effective. But any serious effort to deal with global warming would involve dramatically slashing carbon emissions by the Northern coumtries, an effort that would require retooling of Northern factories, reforming of Northern transportation systems and revising Northern consumption patterns.

Given this bit of analysis, individual gef projects, if they are properly designed and implemented to address ngo criticism concerning community participation, prioritisation of funding and the rest, might prove to be useful; but it is felt that they will do little to actually solve the big-picture issues the gef projects are collectively designed to address. "It is like trying to give aspirin to a person who has cancer," observes Ricardo Carrere. "While it may be somewhat useful to address the pain, it is not a solution," he commented.

--- Robert Weissman is the editor of Multinational Monitor Research. Research assistance for this article has been provided by Marcia Carroll

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