Developing Countries Face Environmental Funding Cuts

Industrialized countries led by the United States are proposing to cut funding for the Global Environment Facility (GEF), one of the world’s major sources of environmental funding for developing countries that have shifted to higher growth.

The issue emerged as 1,500 delegates from 183 countries gathered in Danang, Vietnam for the week-long 6th GEF Assembly, which opened on June 23. The proposed cut would deliver a potential additional blow to developing countries, which already have to compete for a smaller GEF budget for 2018-2022. The overall GEF budget, which is replenished every four years, has fallen from US$4.4 billion in 2014 to US$4.1 billion this year.

The Global Environment Facility was established on the eve of the 1992 Rio Earth Summit Conference sponsored by the United Nations to help tackle the planet’s most pressing environmental problems.

Washington has slashed its GEF contribution the most, from US$546.25 million in 2014 to US$273.20 million this funding round. US President Donald Trump has pushed for the decreased US share since his election in 2016. It is part of the Trump Administration’s increasing turn away from the global world order and particularly from environmental remediation, starting with the decision in January 2017 to quit the Paris Climate Accord.

While the reduction to total funding may be minimal, its effects may be aggravated by the call from donor countries to cut subsidies to the developing nations whose Gross Domestic Product has picked up sharply in the past decade, including the last four years. The Asian countries include Indonesia, India and China, which saw average GDP growth of 5.6 percent, 7.0 percent and 8.2 percent, respectively.

“Of course, we are very concerned, because at the same time, we expect them to deliver more to the Global Environment Fund, but the resources are reducing,” Laksmi Dhewanthi, GEF focal representative for Indonesia, told Asia Sentinel.

“We are not supportive of this criteria because they can use it to discriminate against some countries. Because sometimes, some countries reached a certain number in their respective socioeconomic development index, but it doesn't necessarily reflect the true development of the country,” said a diplomat, who asked not to be named because he was not authorized to speak on the matter publicly.

Apply Criteria “Equally”

The funding in question falls under the System for Transparent Allocation of Resources (STAR), which is the pool of funds allocated for programs addressing biodiversity, climate change and land degradation. It was developed in 2010.

In 2014, allocations for STAR were set based on this criteria: country performance, country potential to achieve global environmental benefits and the Social Economic Development Index based on each country’s GDP per capita.

In the same year, STAR was divided accordingly to US$1.05 billion for biodiversity, US$941 million for climate change remediation and US$346 million to combat land degradation.

Dhewanthi said she hopes a social development index based on GDP per capita will be weighed equally with the other indicators.

“We expect that the criteria will be applied together equally important with other criteria, for example the contribution of the country to the global environmental benefit,” Dhewanthi said. “So indeed, like you mentioned, Brazil, India - we are already at this level of GDP, but in terms of contribution to the global environmental benefit, we [contributed so much] further than other countries. So we would want these other indicators to apply equally.”

Not reflective of reality

Some observers view the proposal – which could reduce the allotment to some countries by as much as 20 percent – as not reflective of the country’s overall condition.

“This index doesn’t reflect what happens in the country, it’s not a good indicator of the reality of our country,” said a delegate from a Latin American country who requested anonymity.

“It doesn’t mean that you that if you increased your GDP then your environmental challenges have reduced. That’s not always the case,” Dhewanthi explained.

“In principle”

Naoko Ishii, the CEO and chairperson of GEF, said that the countries will still use the same formula for the next four years, with indicators such as climate change mitigation, state in biodiversity, and reduced land degradation given consideration along with each nation’s level of the income.

The formula, she said, did not change “in principle.”

There could be different results for the allotment of the funding, however, based on the data available for the above indicators.

“The data could be updated, because the situation is changing every day,” she told Asia Sentinel. “But the fundamental thinking about the formula hasn’t changed.”

Purple Romero is an Asia Sentinel correspondent on assignment in Vietnam.