WORLD TRADE
ORGANIZATIONWT/CTE/W/58
2 September 1997
(97-3531)
Committee on Trade and Environment Original:  English
NATURE AND EXTENT OF GEF PROJECTS IN ASSISTING IN THE IMPLEMENTATION OF
MULTILATERAL ENVIRONMENTAL AGREEMENTS
Communication from the Global Environment Facility (GEF) Secretariat
1. A number of multilateral environmental agreements (MEAs) are aimed at protecting the
environment in specific areas through taking positive measures1 and trade restrictions.  Having MEAs
implemented is often the raison d’être  of their adoption.  However, factors, such as lack of technical
and financial capacity of country Parties, in particular developing country Parties and lack of realexecutive bodies and verifying systems at the international level make MEA compliance difficult.
Since the first Earth Summit in 1992, the Global Environment Facility (GEF) has been helping
eligible country Parties implement several MEAs through funding environmental projects in
countries.  The four focal areas of the GEF are biological diversity, climate change, international
waters and ozone layer.  The issues of land degradation, primarily desertification and deforestation, asthey relate to each focal area, are also addressed.
I. RELATIONSHIP BETWEEN THE GEF AND MEAS
2. The GEF provides new and additional grant and concessional funding to meet the agreed
incremental costs of measures to achieve agreed global environmental benefits in its four focal areas.
The GEF is working closely with several MEAs in its four focal areas.  Given its mandate and itslimited resources, the GEF supports the implementation of several MEAs at different levels.  For
instance, the GEF is currently serving as the financial mechanism of the Convention on Biological
Diversity (CBD) and the United Nations Framew ork Convention on Climate Change (FCCC).  It
complements the Multilateral Fund of the Montreal Protocol on Substances that Deplete the Ozone
Layer (Montreal Protocol).  The GEF supports the implementation of a number of international waters
treaties through its catalytic role.  It funds desertification projects as they relate to one or more of the
GEF four focal areas.
A. The Convention on Biological Diversity and the United Nations Framework Convention on
Climate Change
3. The Convention on Biological Diversity and the United Nations Framework Convention on
Climate Change were adopted in 1992, as major achievements of the Rio Conference on Environment
and Development.  Based on the principle of common but differentiated responsibility, bothconventions stipulate that financial resources be provided to meet the agreed incremental costs
                                                     
1The term "positive measures" does not appear in any of the existing MEAs and is not used in
Agenda 21 .  However, this term has been extensively used in post-UNCED analysis and intergovernmental
deliberations in UNCTAD, WTO, UNEP and CSD.  It  no rmally refers to issues such as access to finance,
access to and transfer of technology, and technical assistance for capacity building.WT/CTE/W/58
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incurred by developing country Parties in comply ing with their obligations under the Conventions.2
The GEF has been designated to operate the financial mechanism of both Conventions.
4. In partial fulfilment of its purposes, the GEF is operating the financial mechanism for the
implementation of the CBD and the FCCC in accordance with cooperative arrangements between
GEF and the Conventions.  A memorandum of understanding has been adopted by the GEF and each
of the Conventions.  The aim of the memorandum is to provide the respective roles andresponsibilities of the Conference of the Parties (COP) to the Conventions and the GEF.  The COP
will decide on policies, programme priorities and eligibility criteria and the GEF will ensure the
effective operation of the GEF as a source of funding activities under the Conventions.
5. The eligible countries determined by the co nventions for their financial mechanism covers
only developing countries.  However, the GEF support s other country Parties if they need assistance
in implementing the conventions and meet UNDP technical assistance and World Bank borrowing
requirements.
B. Montreal Protocol
6. The Montreal Protocol has the Multilateral Fund to support its implementation.  The GEF
provides complementary assistance outside of the Multilateral Fund.  This means that the GEF will
assist otherwise eligible recipient countries that are not Article 5 countries;  or those activities, while
consistent with the objectives of the Montreal Protocol, are of a type not covered by the MultilateralFund.  To be eligible for GEF funds, countries must be parties to the Montreal Protocol and its
amendments.  The GEF has developed an operational strategy in ozone depletion as an operational
response to the Montreal Protocol.  The GEF S ecretariat maintains close contact with both the
Secretariats of the Montreal Protocol and the Multilateral Fund.
C. MEAs in the area of international waters
7. International waters, which includes numerous MEAs, is also one of the GEF’s focal areas.
Though there is no formal linkage between the GEF and these legal agreements, the GEF funds
strategic action programmes to help countries formulate actions and these often facilitate the
implementation of the international agreements in the area of international waters at national and
regional levels.  As Chapters 17 and 18 of Agenda 21  broadly capture the spirit of these MEAs and
offer particularly valuable guidance to countries.  GEF activities undertaken in this focal area will be
consistent with Agenda 21 .  The GEF may be able to fund transboundary projects without requiring
conventions to be adopted among countries.
II. NATURE AND EXTENT OF GEF PROGRAMMING
8. The GEF has developed an Operational Strategy to guide the development of  work
programmes, business plans and budget.  The Operational Strategy incorporates guidance from the
CBD and FCCC,  for which the GEF serves as the interim financial mechanism.3  The GEF activities
are programmed in three broad, interrelated categories:  (a) operational programmes;  (b) enabling
activities;  and (c) short-term response measures.
                                                     
2See Article 20 of the CBD and Article 4, paragraph 3 of the UNFCCC.
3The GEF Operational Strategy was prepared on the basis of close consultations with the CBD and
FCCC Secretariats.  They were invited to attend releva nt meetings so as to ensure that the strategy fully
integrated the guidance approved by the COPs.WT/CTE/W/58
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(a) Operational Programme:  An operational programme is a conceptual and planning
framework for the design, implementation and coordination of a set of projects to
achieve a global environmental objective in a particular focal area.  It organizes the
development of country-driven projects and ensures systematic coordination between
the Implementing Agencies and other actors.  In the areas of biodiversity and climate
change, operational programmes will be developed in accordance with theprogramme priorities approved by the COPs.
(b) Enabling activities:  They include inventories, compilation of information, policy
analysis, and strategies and action plans.  They represent a basic building block of
GEF assistance to countries.  They either are a means of fulfilling essential
communication requirements to a convention, provide a basic and essential level of
information to enable policy and strategic decisions to be made, or assist planning
that identifies priority activities within a country.  Enabling activities will includeamong others preparation of a plan, strategy, or programme to fulfil commitments
under the CBD and preparation of a national communication to the FCCC.
(c) Short-term measures:  While operational programmes and enabling activities are the
main means to assist country Parties to implement the conventions, short term
responsive measures would not be expected to yield significant strategic orprogrammatic benefits, but they would yield short-term benefits at a low cost.  They
can also help country Parties fulfil their commitments under the conventions, for
instance, urgent measures to conserve an extremely endangered species.
9. As of June 1997, the GEF has spent US$1.57 billion in its four focal areas.  Among its total
expenditure, $1.2 billion has been used to fund projects in the areas of biodiversity and climatechange (Copies of the list of GEF funded projects  as of June 1997 have been provided by the GEF
Secretariat and are available upon request to the Trade and Environment Division, WTO Secretariat).
III. GEF ROLE IN HELPING COUNTRIES IMPLEMENT MEAS
10. The GEF is helping countries implement MEAs at different stages as follows.
A. Enable country Parties to implement their MEA obligations
11. To meet the requirements and obligations of MEAs, a number of developing countries need
technical and financial assistance.  The GEF can provide funds to help eligible parties implement their
legal obligations.  This is a first and critical step for developing country Parties to implement MEAs at
an early stage after their ratification.
12. For example, enabling activities in the area of biodiversity include establishment of national
action strategies, plans or programmes for the conservation and sustainable use of biodiversity, and
submission of first national reports to the COP of the CBD.  Recent guidance from the COP also
incorporates other elements of enabling activities, such as building capacity of using the clearing-
house mechanism, inventory and biosafety.  The priority enabling activity identified by the second
COP to the FCCC in July 1996 is the preparation of the first national communications.  As of
June 1997, the GEF has supported more than one hundred countries in their enabling activities in each
area of biodiversity and climate change.WT/CTE/W/58
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B. Promotion of partnership within countries and cooperation among countries in implementing
MEAs
13. Unlike traditional international law, one of the characteristics of MEAs is that their
implementation requires a concerted effort of the whole society, which includes governments and
other major groups as well as local/indigenous communities.  The GEF is promoting consultation
with, and participation of all stakeholders in the preparation and implementation of its projects.4
Partnerships within countries may thus further strengthen a country’s capacity to implement MEAs.
14. As the subject matter of most of MEAs is of a transboundary nature, cooperation among
countries at the regional level is sometimes essential.  For example in the case of countries sharing the
same ecosystem and the same water basin, or countries combating transboundary air pollution and
desertification.  GEF activities are often designed so as to be consistent with national and where
appropriate, regional initiatives.5  In regional projects, GEF will focus on removing barriers to
cooperation by funding additional transaction costs to joint planning activities, additional datacollection/ analysis and coordination between countries.
C. GEF's role in transfer of technologies
15. Several MEAs contain specific provisions on technology transfer, for instance, the CBD and
the FCCC.6  The GEF has supported the transfer of environmentally sound technology (EST).  The
GEF Operational Strategy provides for facilitation of, and access to transfer of environmentally-soundtechnology for biodiversity.
7  The long-term measures for climate change include removing
implementation barriers for technology and reducing the costs of promising technologies.8
16. The most important role of the GEF in the transfer of technology is that the GEF, based oncountry driven approaches, concentrates on enabling countries to remove barriers to technology
transfer and introduces relevant technologies into national markets.  The GEF is funding more than 40projects which will enable the introduction of technologies to national markets by assisting countries
in removing relevant barriers.  These programma tic interventions may ultimately have a large impact
on private capital flows for the transfer of ESTs.  In addition, the GEF also pays incremental costs of
specific ESTs in case they are more expensive than traditional technologies.
D. Leveraging other sources of funding
17. Both the CBD and the FCCC require their financial mechanism to leverage other sources of
funding.9  The GEF does leverage other sources of funding through its catalytic funding activities.
                                                     
4See Public Involvement in GEF-Financed Projects.
5See GEF Operational Strategy, page 3, Strategic Considerations.
6See Article 16 of the CBD and Article 4 of the FCCC.
7See GEF Operational Strategy, page 19.
8See GEF Operational Strategy, page 33.
9Decision I/2 Financial resources and mechanism of the COP to the CBD provides "The programme
priorities are as follows:  (h) Activities that provide access to other international, national and/or private sectorfunds and scientific and technical cooperation".  D ecision 11/CP.I Initial guidance on policies, programme
priorities and eligibility criteria to the operating entity or entities of the financial mechanism, made by the COP
to the FCCC, provides "(v) The operating entity or entities of the financial mechanism should strive to leverage
other funds in support of the activities of developi ng country Parties to address climate change".WT/CTE/W/58
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For instance, GEF financing for biodiversity of $596 million has leveraged an additional financing for
a total of $1,379 million.  GEF financing in climate change of $607 million has leveraged a total of
$3,800 million.  Leveraged resources in the area of climate change are around six times GEF funding.
Additional sources leveraged by the GEF are mainly from donor and recipient countries, including
private sector funds.
18. Leverage of other sources will not only increase funding to support countries in implementing
MEAs, but also involve different sectors in this exercise and thus disseminate the objectives of MEAs.
The most significant aspect of GEF efforts is to assist countries set up a framework which will create
incentives to mobilize other resources, in particular from the private sector.  This effort made by the
GEF is in line with the spirit of some MEAs.10
                                                     
10For instance, Article 11, Incentive Measures of the Convention on Biological Diversity.