The GEF in the Changing Landscape of Environmental Finance

We have recently completed the Sixth Comprehensive Evaluation of the GEF (known by its acronym OPS6). The Comprehensive Evaluations are conducted by the Independent Evaluation Office every four years as critical inputs to the GEF replenishment process. I presented the final draft of the OPS6 to the second replenishment meeting in Addis Ababa, Ethiopia, in October 2017 and the GEF Council in November. The donors to the GEF recognized the evaluation as a foundation for determining the programmatic directions for the next, seventh, GEF replenishment period. OPS6 was a major collective effort, which kept us at the IEO occupied for the better part of two years. It brought together 29 separate evaluations and studies that focused on a wide set of issues, ranging from the results and impacts of the GEF and its various focal areas and programs, to organizational and institutional issues. In conducting the evaluation, we utilized mixed methods, both quantitative and qualitative, to ensure the best approach to answer the evaluation questions posed. Many of the approaches were innovative, such as the use of geospatial tools and methods to track impact and value for money of GEF funded programs and projects on the ground. We also applied formative approaches to evaluate progress made in the Integrated Approach Pilots that were launched during the current GEF cycle. While each of the component evaluations has its own detailed conclusions and recommendations, the Comprehensive Evaluation brings them together at a high strategic level.

Judging from the terminal evaluations of completed projects, the GEF continues to perform well at the aggregate level. Some 81% of the completed projects were judged to have satisfactory or higher outcome ratings. The GEF has also exceeded its co-financing targets raising $8.8 to each dollar invested by the GEF. More challenging is ensuring the continuation of the global environmental benefits after the projects are closed. Only 62% of the projects were judged to have outcomes that are likely to be sustained. The reasons behind this drop often appear to lie in institutional capacity and financial sustainability in the program countries. Indeed, proof of this seems to be that middle-income countries tend to perform better on sustainability than do least developed countries. Furthermore, projects in biodiversity and land degradation face bigger sustainability challenges than those in climate change, likely because of the limited alternative sources of funding and the lack of private sector involvement. These are crucial issues that we need to understand better and, consequently, the IEO has embarked on an exercise to unpack the mechanisms behind sustainability. We expect to present this study to the Council in its next meeting in June 2018, so stay tuned.

Another important development in GEF programming in the past years has been the increase in programmatic approaches, as well as the rise of multifocal area projects that address simultaneously biodiversity conservation, sustainable forest management, land degradation, and climate change and carbon sequestration. Two major evaluations focused on these, finding that projects under programs do indeed tend to perform slightly better than standalone projects, although increased complexity when programs involve multiple countries or agencies and cut across focal areas poses some challenges that need to be managed. The multifocal area projects do produce benefits on multiple fronts when trade-offs, especially between environmental and socioeconomic outcomes, are well managed. (For the findings of the formative evaluation of the Integrated Approach Pilots, see earlier blogs by Dennis Bours.)

The Comprehensive Evaluation concluded that the GEF’s main comparative advantage in the rapidly changing and expanding global environmental finance landscape lies in its ability to address a broad range of environmental issues and the synergies between them, not just climate change, and to serve multiple Conventions and multilateral environmental agreements. It is virtually the only public funding source for the biodiversity, land degradation, and chemicals conventions, and provides important support to many regional and global agreements around international waters. In the increasingly crowded field of climate finance, the GEF still plays a central role but must define its niche more clearly. The GEF also has proven strengths in working with governments to create an enabling environment in countries through legal and regulatory reforms that lay the ground for lasting improvements in environmental management. A study we conducted identified conditions, which are necessary for programming to lead to transformational change. These include a level of ambition and setting in place mechanism for sustainability from the outset.

The recommendations of OPS6 build upon the conclusions regarding the GEF’s comparative advantages regarding its strategic positioning in the broad global environmental field and the strengths of its work on transformational change. The evaluation recognizes the value of integration in programming that addresses multiple environmental issues, but also calls for caution in managing complexity. Integration should be based on the need when the environmental problems call for integrated solutions, and on GEF’s additionality. Not everything is entirely rosy either. Despite its solid performance over a quarter century, the GEF still has areas where more progress needs to be made. Its track record on engaging with the private sector is still rather patchy. Progress has been made in integrating the gender dimension and in engaging with indigenous peoples in GEF programming, but more remains to be done to ensure that the organization applies internationally recognized good practice standards.

The third replenishment meeting of the GEF will take place at the end of January in Brazil. As instructed by the GEF Council, the GEF Secretariat has taken the OPS6 recommendations and fed them into their plans for the programming directions and policy agenda for the next GEF cycle. As an evaluator, I am naturally very pleased as I see that our hard work is having a concrete real-time impact on how we approach global environmental challenges that are fundamental to the survival of humankind.

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