Many governments acknowledge that environmental degradation and climate change pose international and trans-boundary risks to human populations, economies, and ecosystems that could result in a worsening of poverty, social tensions, and political stability. To confront these global challenges, countries have negotiated various international agreements to protect the environment, reduce pollution, conserve natural resources, and promote sustainable growth. While some observers have called upon developed countries to take the lead in addressing these issues, efforts are unlikely to be sufficient without similar measures being implemented in developing countries. Developing countries, however, focused on poverty reduction and economic growth, may not have the financial resources, technological know-how, or institutional capacity to deploy such measures. Therefore, international support for these areas has remained the principal method for governments to assist developing country action on global environmental problems. The United States and other industrialized countries have committed to financial assistance for environmental initiatives through several multilateral agreements (e.g., the Montreal Protocol (1987), the United Nations Framework Convention on Climate Change (1992), United Nations Convention to Combat Desertification (1994), and the Copenhagen Accord (2009)). International financial assistance takes many forms, from fiscal transfers to market transactions, and includes foreign direct investment (FDI), bilateral overseas development assistance (ODA), and contributions to multilateral development banks (MDBs) and other international financial institutions (IFIs), as well as the offering of export credits, loan guarantees, and insurance products. Error! Reference source not found. outlines recent U.S. financial support for multilateral environmental initiatives. Congress is responsible for several activities in this regard, including (1) authorizing periodic appropriations for U.S. financial contributions to the institutions, and (2) overseeing U.S. involvement in the programs. Issues of congressional interest include the overall development assistance strategy of the United States, U.S. leadership in global environmental and economic affairs, and U.S. commercial interests in trade and investment. As Congress considers potential authorizations and/or appropriations for initiatives administered through the Department of State, the Department of the Treasury, and other agencies with international programs, it may have questions concerning the direction, efficiency, and effectiveness of current bilateral and multilateral programs. This report provides an overview of one of the oldest, largest, and most comprehensive multilateral programs to date—the Global Environment Facility (GEF)—and analyzes its structure, funding, and objectives in light of the many challenges within the contemporary landscape of global environmental finance. The Global Environment Facility (GEF) is an independent and international financial organization that provides grants, promotes cooperation, and fosters actions in developing countries to protect the global environment. Established in 1991, it unites 182 member governments and partners with international institutions, nongovernmental organizations, and the private sector to assist developing countries with environmental projects related to six areas: biodiversity, climate change, international waters, the ozone layer, land degradation, and persistent organic pollutants (POPs). GEF receives funding from multiple donor countries —including the United States—and provides grants to cover the additional or "incremental" costs associated with transforming a project with national benefits into one with global environmental benefits (e.g., choosing solar energy technology over coal technology meets the same national development goal of power generation but is more costly, excluding long-term environmental externalities; GEF grants aim to cover the difference or "increment" between a less costly, more polluting option and a costlier, more environmentally sound option). In this way, GEF funding is structured to "supplement" base project funding and provide for the environmental components in national development agendas. Since its inception, GEF has allocated $11.5 billion—supplemented by more than $57 billion in co-financing—for more than 3,200 projects in over 165 countries. The idea for a Global Environment Facility was proposed in a September 1989 meeting of the joint International Bank for Reconstruction and Development (the World Bank)—International Monetary Fund Development Committee after recommendation by a World Resources Institute report commissioned by the United Nations. The fund was established in 1991 as a pilot program within the World Bank, and many observers saw it as the beginning of an important shift in multilateral policy toward incorporating environmental concerns into development assistance. GEF, however, quickly ran into some operational challenges. These included (1) problems with communication among the implementing agencies (i.e., among the World Bank economists, the United Nations Development Program engineers, and the United Nations Environment Program environmentalists), (2) problems with differing agendas among the donor countries (i.e., between environmental idealism in Europe and economic pragmatism in the United States and United Kingdom), and (3) problems with differing perspectives among developing countries (i.e., between an emphasis on economic growth or environmental initiatives). Initially, GEF had been opposed by developing countries who believed that a program established and controlled by higher-income donor countries under the framework of the Multilateral Development Banks was not in their best interest. They remained committed to a governing structure and a cooperative partnership founded on a U.N.-style majority-based decision. After three years of debate, GEF was restructured in 1994 to address many of its institutional challenges. GEF moved out of the World Bank to become a separate and permanent institution with enhanced involvement from developing countries in decision making and implementation. A new governing structure was instituted, the first operating procedures ("the Instrument for the GEF") were documented, and the funding cycle ("the GEF Replenishment") commenced. The World Bank took on the provision of the Trust Fund. The United Nations Development Program, the United Nations Environment Program, and other international organizations contributed to project development, management, and delivery. International Agencies: GEF currently partners with 10 international agencies: the World Bank; the United Nations Development Program (UNDP); the United Nations Environment Program (UNEP); the United Nations Food and Agriculture Organization; the United Nations Industrial Development Organization; the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the International Fund for Agricultural Development. Procedurally, the World Bank administers funding, UNDP oversees project development, and UNEP serves as the scientific and technical advisor. The remaining agencies contribute to the management and delivery of projects. International Conventions: GEF is the primary fund administrator for four Rio (Earth Summit) Conventions, including the Convention on Biological Diversity (CBD), the United Nations Framework Convention on Climate Change (UNFCCC), the Stockholm Convention on Persistent Organic Pollutants (POPs), and the United Nations Convention to Combat Desertification (UNCCD). GEF also establishes operational guidance for international waters and ozone activities, the latter consistent with the Montreal Protocol on Substances that Deplete the Ozone Layer and its amendments. Internal Organization: GEF's main decision-making body is the GEF Council, which is an independent board of governors responsible for developing, adopting, and evaluating operational policies and programs. The Council is composed of 32 appointed members—16 from developing countries, 14 from developed countries, and 2 from among the countries of Central and Eastern Europe and the former Soviet Union. The balance between donor and recipient countries was negotiated and agreed to by Member countries after the pilot phase of the program. The Council meets approximately every six months and allows non-governmental organizations and private individuals to attend most sessions. Formal voting goes before the GEF Assembly, which is composed of representatives from all Member countries and meets every four years. During these times, the Assembly reviews general policy for operations, membership, funding, and amendments. The GEF Secretariat, based in Washington, DC, services and reports to the Council and the Assembly and formulates the work program, oversees implementation, and ensures that operational policies are followed. Voting: The Assembly and the Council make decisions and adopt regulations through the process of consensus . GEF defines consensus as an agreement reached by all participants which includes the resolution or mitigation of all minority objections. If, in the case of the Council, all practicable efforts have been made and no consensus appears, Members may request a formal vote . The GEF formal vote is a double weighted majority; that is, an affirmative vote that includes both a 60% majority of the total number of Participants and a 60% majority of the total amount of contributions. This format arose through a coordinated agreement between developed and developing countries in an effort to give facility to both donors and recipients in the decision-making process. A formal vote has never been taken at Council. Replenishments: GEF is funded by donor countries, which pledge money every four years through a process known as GEF Replenishment. The process of Replenishment was designed to allow for program flexibility, strategic planning, and periodic performance evaluations. The original GEF pilot program of $1 billion has been replenished five times with $2.01 billion in 1994, $2.67 billion in 1998, $2.93 billion in 2002, $3.13 billion in 2006, and $4.34 billion in 2010. Financial commitments by donor country to the GEF pilot program and the five GEF replenishments can be found in Figure A-1 of the Appendix . U.S. Commitments: The United States supported the establishment of GEF in 1991. While the United States did not provide direct funding to the pilot phase of the program (1991-1993), it has made commitments and contributions to all five GEF replenishments. U.S. commitments to the various four-year Replenishment cycles have been $430 million in 1994, $430 million in 1998, $430 million in 2002, $320 million in 2006, and $575 million in 2010, for a total of $2.185 billion.