The Convention provides in Art. 4.3 that annex II Parties shall provide additional resources needed by non-Annex1 Parties to meet the agreed full incremental cost of implementing activities to address climate change covered by Art. 4.1.(the only ones developing countries are committed to).

Art. 11 defines the financial mechanism of the Convention through which such funds are to be provided. The Global Environment Facility (the GEF) has been selected to operate the financial mechanism.

I n some 15 years of existence the GEF has disbursed under US $ 2.5 bn. to climate-change related activities, and its current payments in this area are around 300 million US$ per year.

It claims to “leverage” several times that amount (GEF payments are frequently linked to projects implemented by other organizations. It is however not clear whether it is GEF funding that causes the projects to be implemented.). In any case, the total amount of funding involving the GEF is in the order of US $ 1-1.5 billion per year.

In addition to covering the cost of national communications (US$ 185 million in total), most of GEF funding goes to programmes focussed on energy efficiency, renewable energy, low-GHG emitting technologies, and sustainable transport, which together received some US$ 2bn over the years. The so-called “Strategic priority on adaptation” received US$ 50 million.

There is nothing wrong with the choice of GEF activities, but its resources fall ridiculously short of what would be needed to make a difference. The proposed revamping of programme names for 2006-2010 will not change that.

GEF funding never took-off much above its level in the initial phase, before plans could be developed in developing countries. According to the World Bank, the largest GEF implementing agency, an adequate GEF support level to energy efficiency and renewable energy technologies would require multiplying GEF resources by a factor of at least 3. Serious support to the development of new, low-greenhouse gas emitting technologies would require a multiplication by a factor of at least 10.

In the Marrakesh Accords, new funds have been established. Two are operated by the GEF. The Special Climate Change Fund, which with total pledges of US $ 67 million (from 13 Parties, about 5 million each on average) cannot accomplish much, in spite of its comprehensive terms of reference. The Least Developed Countries Fund, with its US$ 163 million pledged by 18 Parties fares hardly better.

The Adaptation Fund was established under the Kyoto Protocol. It will receive 2 percent of the value of CERs issued under the Clean Development Mechanism, to assist developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation (verbatim what Annex II Parties are committed to do under Article 4.4 of the Convention!). In 2008-2012, those proceeds could represent between 80 and 300 million US $.These funds will come from a tax levied on sustainable development projects in developing countries. There was therefore no reason to entrust them to quasi-colonial governance of the GEF, where Annex I Parties call the shots.

It was rightly noted in views on the Kyoto Protocol review in 2007 that this levy places CDM projects at a competitive disadvantage, that it is the only compulsory payment in the Climate Change process and that it is inequitable. However, the proposal to extend it to Article 6 projects would be an error and would only make things worse. This tax discourages desirable activities (sustainable development and emissions reducing projects). It should instead be abolished and replaced by resources from a tax on GHG-emitting activities (a tax on emissions trading, on permit auctions or the international tax on airplane tickets would be good candidates)