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We would welcome the opportunity to brief you further in any manner most helpful to you.

With our best regards and best wishes for success in meeting the daunting challenges you face.

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From the President...

Run-up to Rio:
Hoping for the Best

While the UNCED Conference in June has the potential for changing the future of nations and the UN to better protect the planet Earth, it also has the potential for great disappointment if heightened expectations are

not met.

The U.S., the world's last remaining superpower, holds one of the keys to whether UNCED will prove worthy of its effort. Sadly, the rough and tumble of the U.S. 1992 electoral campaigns and an apparent loss of surefootedness by the Bush Administration may account for its indecisiveness towards UNCED. Questions remain whether President Bush will attend the Conference in Rio and, if so, whether the U.S. will have a positive, concrete response to the call for definite greenhouse gas reductions to slow global warming, and adequate funding mechanisms for developing countries. From a U.S. view, it appears that the Third World may just view the Rio meeting as a new foreign aid channel.

Inevitably, mega-conferences raise exorbitant expectations. Just to mark the the passage of time (two decades after Stockholm) may not be a sufficient reason for a reprise at Rio. Agenda 21 alone may not contain sufficient benefits for humanity and the planet without the signing of the climate change and biodiversity treaties.

It is crucial that the President attend the Rio conference: First, to lend his prestige and authority to efforts to protect the planet through responsible international action; and second, to put to rest the misconception that isolationism is America's answer to these global challenges. By no means can all of Earth's environmental problems be met only by actions by the industrialized nations alone. We must bring the developing nations along apace. If the Administration's experts believe that data are incomplete or insufficient to indicate target reductions of CO, emissions to reduce global warming, we as a nation should propose action. Perhaps the U.S. could recommend a mechanism whereby an international panel would evaluate data on a continuing basis the panel could recommend targets for adoption by nations via the UNEP Governing Council or other mechanism with adjustments every two to five years. This could be an upgrade or an extension of the role now served by the International Panel on Climate Change (IPCC).

One aspect on which the Administration should focus is the need for a strong, viable UNEP with sufficient authority and resources to supervise the implementation of decisions resulting from UNCED. The nations at UNCED need to express a policy that responsibility should rest with UNEP rather than have authority shift back and forth between the General Assembly and UNEP on such critical issues such as global warming.

Finally, all nations should understand that the President's attendance at Rio does not signify or require agreement with every proposal. It is enough to demonstrate international cooperation and leadership, in this, as in other spheres, failure to achieve 100% agreement on all issues should not preclude doing what is doable for all the people of the planet.

UNCED Preparation

The level of U.S. leadership at the UN Conference on Environment and Development (UNCED) and a number of key policy positions are still unresolved as US/UNEP NEWS goes to press. In December 1989 the UN General Assembly passed Resolution 44/228 calling for UNCED on the 20th Anniversary of the Stockholm Conference on the Human Environment. Three years and four Preparatory Committee Meetings (PrepComs) later, the Conference, to be held in Rio de Janeiro this June, is taking shape. Seven thousand official delegates are expected to attend, with 9,500 representatives from non-governmental organizations (NGO's), 2,000 press and some 80 heads of state.

The U.S. responded to UN Res. 44/228 by creating a USUNCED Coordination Center in the State Department under Curtis Bohlen, Assistant Secretary of State for Oceans and International Environment and Scientific Affairs (AS/OES), with Amb. Robert J. Ryan, Jr. as Chair. The U.S. has sent representatives to each PrepCom and will send to Rio a delegation of executive branch officials and negotiators, congressional advisors and NGO observers. It is not yet clear whether President Bush will lead the delegation.

In a statement to the House Foreign Affairs Committee, Bohlen expressed the purpose of UNCED as "to adopt or encourage the development of global, regional and national strategies that address both the world's environment and development simultaneously." Bohlen noted that the documents at UNCED will be non-binding recommendations which leaves implementing actions with individual nations and such international agencies as UNEP.

UNCED is key to UNEP's future activities, as the Earth's environment agency, in assisting nations and international institutions to implement policy. UNEP provides an institutional mechanism and the potential for reconciliation at the international level. UNEP's role is to define the dimensions of environmental problems, map their scope, and develop regional and multilateral mechanisms involving governments, industry, academia and individuals to address those concerns. UNEP's success, despite limited resources, proves that it is an institution well-suited for the directives resulting from the Rio Conference.

Agenda 21, the blueprint for future actions to be adopted at UNCED, outlines some priority areas for UNEP. While strengthening its role in environmental policy guidance, UNEP is expected to build up its regional areas, and enhance the role of women and other major groups in the pursuit of environmental management and sustainable development. The priority areas range from improving coordination within the U.N. and supporting development policies and programs, to the development of natural resource accounting methods and sound environmental economics.

US/UNEP News 2

GLOBAL
ENVIRONMENT
FACILITY

PARTNERS IN GLOBAL SOLUTIONS

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May 4, 1992

Dear Participant,

Please find attached the "Statement by the Participants on the Future Evolution of the Global Environment Facility". You will note that some minor changes have been made to the version faxed to you on May 1, 1992. This has been done in order to include sub-headings, to clarify language, and to ensure consistency with the final text of the main document (Global Environment Facility Beyond the Pilot Phase) which will be faxed out to you later today. The attached statement supercedes the draft dated 1 May and is being circulated by the Chairman to the Intergovernmental Negotiating Committees on Climate Change and Biodiversity.

·

Best wishes,

Your sincerely

Jay Johnson

Ian Johnson
Administrator

GEF ADMINISTRATOR, ENVIRONMENT DEPARTMENT, WORLD BANK, 1818 H STREET, N.W., WASHINGTON, D.C. 20433, USA

THE WORLD BANK

TEL: (202) 473-1053 FAX: (202) 477-0551

UNITED NATIONS

DEVELOPMENT PROGRAMME

UNITED NATIONS
ENVIRONMENT PROGRAMME

GLOBAL

ENVIRONMENT
FACILITY

PARTNERS IN GLOBAL SOLUTIONS

STATEMENT BY GEF PARTICIPANTS ON THE FUTURE EVOLUTION OF
THE GLOBAL ENVIRONMENT FACILITY

Introduction

1.

Environmental concerns are pervasive within and between countries, and are of a local, national, and global nature. A broad-based and integrated environmental strategy, linked with sound economic and social policies for sustainable development, is necessary to address them. These issues have been discussed extensively in a number of international fora, notably at sessions of the Preparatory Committee for UNCED. Agenda 21, developed within the UNCED process, provides a comprehensive summary of the environment and development issues likely to confront all countries. It is evident that sound environmental management is an intrinsic part of the sustainability of the development process.

2.

In response to environment and development concerns, multilateral and bilateral donors and lenders have taken a number of steps to assist developing countries in incorporating environmental costs and benefits more systematically into their development policies and programs. These efforts have been given further impetus by the recent communique from the Development Committee -- a joint ministerial committee of the Boards of Governors of the World Bank and the International Monetary Fund -- which, inter alia, proposed that consideration be given to an "Earth Increment" in the tenth replenishment of the International Development Association (IDA-10).

3. There is also general recognition that some environmental problems transcend national boundaries and require internationally-negotiated solutions. In order to assist developing countries in dealing with global environmental problems, the Global Environment Facility (GEF) was established in 1990 as a three year pilot program. The GEF provides funding for investments and technical assistance in four focal areas -- global warming, biodiversity, international waters, and ozone depletion. To date, 83% of the funds that have been allocated are for global warming and biodiversity.

4.

Two conventions covering global environmental issues - climate change and biodiversity - are now under negotiation. Addressing these two issues will place an additional financial burden on developing countries. It is generally agreed that new and additional funding will be required to meet agreed incremental costs. The governments negotiating the two conventions have indicated that a modified GEF is one option for assisting developing countries to meet their obligations under the conventions.

5.

The Participants finalized and agreed upon a document entitled "The Global Environment Facility - Beyond the Pilot Phase" which is summarized in the following paragraphs.

THE WORLD BANK

UNITED NATIONS

UNITED NATIONS

DEVELOPMENT PROGRAMME

ENVIRONMENT PROGRAMME

-2

Principles

6.

The principles underlying the Facility are summarized as follows:

The GEF would provide additional grant and concessional funding of the agreed incremental costs for achieving agreed global environmental benefits;

The GEF would finance activities which benefit the global environment. It would continue to support its current four focal areas. Land degradation issues, primarily desertification and deforestation, as they relate to the focal areas of the Facility, would be eligible for financing;

The GEF is available to function as the funding mechanism for agreed global environmental conventions on Climate Change and Biodiversity, should the Parties to those conventions so desire;

The GEF would assure the cost-effectiveness of its activities in addressing the targeted global environmental issues;

The GEF would fund programs and projects which are country driven and consistent with national priorities designed to support sustainable development;

The GEF would build on proven institutional structures, thus avoiding the creation of new
institutions;

The GEF must be transparent and accountable to contributors and beneficiaries alike; and
The GEF would have sufficient flexibility to introduce modifications as the need arises.

Governance

7.

The governance of the restructured GEF would reflect these principles. Universal participation is seen as key to the Facility's success. Governments participating in the GEF would form a Participants' Assembly. It would normally take decisions on the basis of consensus. When this does not prove possible, a voting system would be used that guarantees a balanced and equitable representation of the interests of developing countries while giving due weight to the funding efforts of donor countries. To ensure that deliberations do not become unwieldy, a constituency system might be needed.

8.

If the Conferences of the Parties to the Conventions determine that the GEF constitutes an acceptable funding mechanism, they would have primacy for establishing policy, strategy, and eligibility criteria under the respective conventions, as well as guiding the GEF on these issues. The GEF, through its Participants, would ensure that the priorities and criteria set by the Conferences of the Parties to the Conventions are respected, and provide regular reports to the Parties on its activities.

9.

The United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), and the World Bank would continue to fulfill the roles they

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