Explainer: How the GEF Funds Global Environmental Action
SRINAGAR, India, April 16 (IPS) - The Global Environment Facility, widely known as the GEF, plays a central role in financing environmental protection across the world. It supports developing countries in tackling climate change, biodiversity loss, land degradation, pollution, and threats to ecosystems.
Since its establishment in the early 1990s, the GEF has grown as a multilateral environmental fund, supporting projects in more than 170 countries.
Over time, the GEF has evolved into what it calls a “family of funds”, each targeting a specific global environmental challenge while operating under a shared strategic framework.
This explainer looks at how the GEF funding works, the origins of its financing model, and the role of six major funds that channel resources toward global environmental goals.
Origins of the GEF Funding Model
The GEF was created in 1991, before the Rio ‘Earth’ Summit in 1992, which aimed to develop a global blueprint for balancing economic development with environmental protection; however, its importance grew after the summit.
The Rio Summit produced three major environmental conventions. These were the United Nations Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity, and, later in 1994, the Convention to Combat Desertification. The GEF became the financial mechanism for these agreements, meaning it mobilises and distributes funds to help countries implement them.
Over the past 35 years, the GEF has expanded its mandate. Today it supports multiple conventions and environmental initiatives through a structured set of trust funds. This architecture allows the facility to coordinate funding across different environmental priorities while maintaining specialised programs for each global commitment.
The Global Environment Facility (GEF) is now focusing on solving environmental problems together instead of separately. It looks at climate change, biodiversity loss, and pollution as connected issues and works with governments, international groups, civil society, and businesses to address them.
The GEF Trust Fund was initially created to support multiple environmental agreements simultaneously. Over time, countries preferred more specific funding for their particular needs.
Because of these changes, the GEF now has different funds, each designed for different purposes and methods of giving money.
Some funds – like the Trust Fund, the Least Developed Countries Fund (LDCF), and part of the Special Climate Change Fund (SCCF) – use a system that helps countries know in advance how much funding they can expect.
The GEF Trust Fund
The Global Environment Facility Trust Fund is the main source of funds for the GEF. It provides grants to support environmental projects in developing countries.
The Trust Fund finances activities across several environmental areas.
These include
- Biodiversity conservation,
- Climate change mitigation,
- Land degradation control,
- International waters management, and
- Chemicals and waste reduction.
Countries receive funding through a system known as the System for Transparent Allocation of Resources, or STAR, which distributes funds based on their environmental needs and eligibility.
Projects funded by the Trust Fund often focus on creating global environmental benefits. These may include:
- Protecting endangered species,
- Restoring ecosystems,
- Reducing greenhouse gas emissions, and
- Improving pollution management systems.
The Trust Fund operates through periodic “replenishment” cycles. Donor countries pledge new contributions every four years, which allows the GEF to finance programs during the next funding period. For example, the GEF-9 cycle will cover the period from July 2026 to June 2030 and focus on scaling up environmental investments while mobilising private capital and strengthening country ownership of environmental policies.
The Global Environment Facility (GEF) has created Integrated Programs. These are special programs designed to address multiple environmental goals at the same time in a more coordinated and efficient way.
For example, the Food Systems Integrated Program does not fund separate projects for climate change, biodiversity, and land degradation. Instead, it combines them into one unified project, which helps achieve stronger and longer-lasting results while making better use of funding.
Global Biodiversity Framework Fund
The Global Biodiversity Framework Fund is a relatively new component of the GEF family of funds. It was created to help countries implement the Kunming Montreal Global Biodiversity Framework, which was adopted in 2022 under the Convention on Biological Diversity.
The biodiversity framework sets ambitious targets for protecting nature by 2030. Its most prominent targets include the “30 by 30” target, which calls for protecting at least 30 percent of the world’s land and ocean areas by the end of the decade. The Framework also sets a 30 percent target for the restoration of ecosystems and a target of mobilising 30 billion dollars in international financial flows to developing countries for biodiversity action.
The Global Biodiversity Framework Fund supports actions that help countries meet these targets.
Actions that are supported include the following:
- Expanding protected areas,
- Restoring degraded ecosystems,
- Protecting endangered species, and
- Strengthening biodiversity monitoring.
Another important focus is the integration of biodiversity into economic planning. Many projects supported by this fund work with governments and businesses to match financial flows with biodiversity goals. This means reducing financial support for activities that damage the environment and encouraging more sustainable farming, forestry, and fishing practices.
By providing targeted financing for biodiversity commitments, the fund helps translate global agreements into practical actions at the national and local levels.
It is also important to highlight that the fund sets a target of providing at least 20% of its resources to support actions by Indigenous Peoples and local communities. This form of direct financing is unique for a multilateral environmental fund. To date, this target has been exceeded and mechanisms such as the Green Climate Fund and the Tropical Forest Forever Facility are considering replicating this approach.
GEF-9 biodiversity investments will bring together four interconnected pathways:
- Scaling up financial flows to close the nature financing gap,
- Embedding environmental priorities in national development strategies,
- Mobilising private capital through blended finance, and
- Empowering Indigenous Peoples, local communities, and civil society as active conservation partners.
“A renewed emphasis on the Forest Biomes Integrated Program will continue directing investment into the landscapes most critical for achieving 30×30 – ensuring that GEF financing remains focused where the stakes are highest,” said Chizuru Aoki, the head of the GEF Conventions and Funds Division.
Nagoya Protocol Implementation Fund
The Nagoya Protocol Implementation Fund supports countries in implementing the Nagoya Protocol on Access and Benefit Sharing. This international agreement, part of the Convention on Biological Diversity, aims to make sure that the genetic resources of the planet are used fairly and equitably, with benefits shared with those who provide them.
Genetic resources include plants, animals, and microorganisms that are used in research and commercial products such as medicines, cosmetics, and agricultural technologies. Historically, many developing countries have expressed concerns that companies and researchers benefit from these resources without sharing profits or knowledge.
The Nagoya Protocol fixes these issues by requiring users to do the following:
- Get permission from the country providing the resources, and
- Agree on how benefits (like money or knowledge) will be shared.
The fund supports countries by helping them:
- Create laws and rules for using genetic resources,
- Improve monitoring systems, and
- Build skills among researchers and policymakers.
Projects funded also support Indigenous peoples and local communities, who often hold traditional knowledge associated with biological resources. Protecting this knowledge and ensuring fair compensation is a key objective of the Nagoya framework.
Least Developed Countries Fund
The Least Developed Countries Fund focuses on supporting climate adaptation in the world’s most vulnerable nations. These countries often face severe environmental risks but lack the finances and systems to respond efficiently.
The fund supports the preparation and implementation of National Adaptation Programs of Action and National Adaptation Plans. These are country-specific strategies that identify the most urgent climate risks facing each country and outline measures to reduce vulnerability.
Typical projects include the following:
- Strengthening climate-resilient agriculture,
- Improving water management systems,
- Protecting coastal zones, and
- Building early warning systems for extreme weather events.
Because many least developed countries face multiple environmental issues at once, the fund often supports integrated projects that address climate change alongside biodiversity conservation and land management.
This funding system makes sure that the poorest and most vulnerable countries get the help they need to deal with climate change, even though they did very little to cause it.
Special Climate Change Fund
The Special Climate Change Fund supports climate action in developing countries and works alongside the Least Developed Countries Fund.
While the Least Developed Countries Fund focuses on the poorest nations, this fund helps other developing countries that are also affected by climate change.
It supports projects that:
- Help countries prepare for climate impacts,
- Include climate planning in development and infrastructure,
- Improve water management and agriculture.
- Reduce disaster risks, and
- Promote environmentally friendly technologies.
The SCCF also, in some cases, supports mitigation efforts, particularly when they involve innovative technologies that reduce greenhouse gas emissions. By financing both adaptation and mitigation initiatives, the fund contributes to global efforts to stabilise the climate system.
Capacity Building Initiative for Transparency Trust Fund
The Capacity Building Initiative for Transparency Trust Fund supports countries in implementing transparency requirements under the Paris Agreement.
Under this agreement, countries must regularly report their greenhouse gas emissions and track their progress on climate goals. However, many developing countries do not have the tools or skills to do this properly.
This fund helps by supporting:
- Training for government officials,
- Creation of national emissions data systems, and
- Better monitoring and reporting methods.
Strong reporting systems are important because they:
- Help track climate progress,
- Build trust between countries, and
- Ensure countries meet their commitments.
The fund helps developing countries improve their climate reporting so they can fully take part in global climate efforts.
How the “family of funds” works together
One of the defining features of the GEF funding model is that each part speaks to the others.
Think of it like a team of funds working together, rather than separate, isolated programs.
These funds are coordinated so they can:
- Support the same project from different angles,
- Avoid duplication (no overlapping funding for the same purpose), and
- Align with global environmental agreements.
For example:
- A biodiversity project might use:
- The main GEF Trust Fund
- Plus the Global Biodiversity Framework Fund
- A climate adaptation project could combine:
- Least Developed Countries Fund
- Special Climate Change Fund
This ‘family’ structure improves:
- Coordination, so different funds work in sync,
- Efficiency, so funds work with less waste and duplication, and
- Flexibility, so projects can tap into multiple funding sources.
Environmental problems are interconnected. A single project (like forest conservation) can:
- Reduce carbon emissions,
- Protect biodiversity,
- Improve water systems, and
- Avoid land degradation.
Because of the integrated funding system, the GEF can support all these goals at once, rather than funding them separately.
The “family of funds” is a coordinated funding system that allows the GEF to:
- Combine resources;
- Support complex, multi-sector projects; and
- Maximise environmental impact
The Future of GEF Financing
As global environmental crises grow, so does the demand for money and resources to meet climate and biodiversity needs. International assessments suggest that hundreds of billions of dollars are needed each year.
The GEF aims to play a “catalytic” role in closing this gap – in short, the GEF acts as a “catalyst” or tool for using limited public funds to unlock much larger investments.
Its funding model mobilises additional resources from
- Governments,
- Development banks, and
- Private investors.
“In practical terms, the mechanisms being supported in GEF-9 include debt-for-nature and debt-for-climate swaps, green bonds, pooled investment vehicles, and outcome-based financing structures. Each of these can serve a different purpose depending on the context – but the common thread is that they allow the GEF to use its resources strategically to unlock much larger pools of capital from the private sector, multiplying the environmental impact that public funding alone could achieve,” Aoki said.
Note: This feature is published with the support of the GEF. IPS is solely responsible for the editorial content, and it does not necessarily reflect the views of the GEF.
IPS UN Bureau Report
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