Q&A: Incoming GEF chief wants world to invest 1% of GDP in nature

BURLINGTON, Vt. — The Global Environment Facility was born out of the 1992 Rio Earth Summit and tasked with mobilizing financial resources to help countries achieve their environmental conservation goals. Almost 30 years later, faced with dire climate change projections and a combined health and economic crisis that will force a long and complex recovery, it is time to revisit that original partnership and find new ways to unlock transformational change, according to Carlos Manuel Rodríguez, who will take over as the institution’s CEO and chairperson in September. “Nature provides us with roughly 40% of the global GDP [gross domestic product], and we are investing about .006% of global GDP in nature conservation,” Rodríguez, who served three terms as Costa Rica’s minister of environment and energy, told Devex. “We need to set targets, financial targets on resource mobilization for sustainability for 2030, and I tend to believe that we should be mobilizing 1% of global GDP,” he said. This conversation has been edited for length and clarity. Why did you decide to move from a national government, which was able to achieve some impressive environmental conservation milestones, to a multilateral institution, which must balance the interests of its constituents and make the investment case to donors at a time when multilateralism is under pressure? The work that I did as minister in Costa Rica requires a high investment on the multilateral scene, not just because we wanted to have a bold, high ambition behind negotiations, but also pushing the envelope forward in terms of international mobilization of resources, as well as generating consensus on the broad environmental agreements that we are negotiating or implementing. So the international scene is not new to me. I've been working on it for many years, and I think I've got a good balance in terms of the international agenda and how that can be implemented at the national level. I see that we are at a crossroad, globally speaking. This is a moment to take all the serious decisions on how development — particularly investment for development — should be seen and how do we make the best of coming out of this [COVID-19] pandemic into a global conversation that recognizes how fragile and vulnerable our societies are in lieu of what is coming behind COVID, which are very serious situations. What's your assessment of the change that needs to happen in order to achieve that kind of scale of problem-solving that you're talking about? I think that there will be a big conversation about how efficient multilateralism is, in terms of how we have organized the U.N. [United Nations] agencies and the U.N. system, how we mobilize resources, and how we set negotiations. This is the opportunity to bring other important political stakeholders or social stakeholders into these processes. As of today, basically all the big decisions are being taken by governments, and I think that should be reviewed in a way that we can fully incorporate many other stakeholders that are key in the success of what we should be aiming for. [It is not that] we haven't been successful at all. The [1992 Rio Convention international environmental agreement] has worked well, and we need to review them. They were agreed 30 years ago, and the world has changed in the last 30 years. We haven't made progress at the scale that we need. ... So we need to have a global conversation on how we redefine the U.N. agencies and their roles and how we redefine the multilateral environmental agreements. We've been working in silos, and we need to have a conversation about how we begin to break down those silos. What are the silos? Poverty alleviation, human development on one side and then human rights on the other side, and then many other sectors working in silos without a common baseline of understanding that we need to have a holistic approach. What we are seeing today is the lack of a comprehensive approach in terms of our development model. And even though we've been talking a lot for many years, and particularly on what we agreed in terms of the Sustainable Development Goals, we still need the proper global institutional framework, and that should be reflected at the country level. So to continue working in silos is not an option. … We need to have a very deep, very objective, apolitical discussion on that. It's very, very complex because of how polarized societies are today. Are there particular stakeholders that you think have been left out of the agenda that need to be elevated? There's a bunch of groups that are there, watching the politicians and the governments play in the field, and they're sitting in the bleachers waiting for a space for them to contribute. I think that the private sector, the NGOs, Indigenous communities, the youth, the women's organizations are just a few stakeholders that can really contribute to upscale the transformations. One of the main issues for that to happen is having democracies in the world. If you assess good governance, half of the countries on this planet are doing very badly in terms of respecting the rule of law, in terms of democracy, in terms of respecting human rights. And that issue, which is huge, cannot be set aside if we want to succeed in our multilateral environmental agreements. So that is what can give us the scale that we need, and we need to be able to generate consensus on a way forward. And this is extremely, extremely complicated. This goes beyond any capacity of the GEF, or the environmental movement, or the environmental international agencies. But this is what is limiting us to really go from the scale that we are today to the scale that we need to be. So your impression is that in order to move from a place of deep polarization and political conflict around environmental and climate change issues, those good governance building blocks need to be addressed? Yes, definitely. That is what we need in order to succeed in our aspiration of human development, in our aspiration on a new economic model that recognizes planetary boundaries and recognizes the unsustainable system of production and consumption. “The decisions that are going to be taken in the next year and a half, two years will have a huge impact on how we will be doing by 2030.” --— Carlos Manuel Rodríguez, incoming CEO and chairperson, Global Environment Facility We have today this pandemic, which is generating so many human and social impacts, that the way forward needs to be based on an understanding that the political and economic system is not providing us with good solutions. My concern is that in many governments, governments are being tempted to come out of this human and economic crisis with very short-term solutions, some of them violating human rights, some of them going back to business as usual in terms of management and exploitation of natural resources, and that will be a dead-end road. What does that mean for an institution like the GEF, faced with having to take action now to implement projects while still recognizing that what might be required are deeper structural changes? There's one big opportunity in front of us, which is based on the fact that we all recognize that as a civilization we're very fragile and vulnerable to global issues — in this case, the pandemic. But eventually, social issues will have a similar impact: The economic recession will generate a lot of social unrest, and then if we see the incoming impacts of climate change and biodiversity collapse, those are huge things that are just around the corner. We need to review our own partnership in terms of mobilizing resources like never before … resources from all sources. Most of the resources that are being invested in nature conservation globally are public expenditures. That is probably 80% of what is being invested annually in nature conservation — climate change, biodiversity, the chemical conventions, and others. If you see how many institutions there are globally with a responsibility to implement the international environmental agreements and be able to work in a cost-effective manner, the GEF is very well situated. Nevertheless, the GEF mobilizes a small fraction of the resources that are being mobilized annually in nature conservation or sustainability. I believe that the GEF is in a very interesting position to be able to create consensus on how we can be more efficient, more focused on those mechanisms that have proven to be effective in implementing the multilateral environmental agreements, and this is a wonderful opportunity for the partnership to really assess what we have done and see for the future what we need to do. If we continue funding the GEF the way we have done it in these 25-plus years, we will never become a global agent of change. And we are positioned potentially as a global agent of change. When you talk about reviewing the GEF partnership, is there something specific that you have in mind? I've been talking with ministers of environment from the North and the South to have an impression of what they see and they expect, and ... they want to see a big change. They are concerned that ministers of environment, even though they are the principal responsible for implementing the environmental agreements, are still politically very weak. … I think that GEF can really create a strong narrative around being the organization that can, on a cost-benefit relationship, really mobilize resources to generate a transformational change in many of these countries. What will be your pitch to the GEF's donors, but also to implementing countries to prioritize these issues on their agendas? Do you think it will be possible to maintain a financial commitment to climate and environmental issues at a time when national budgets are already stretched to their limit because of COVID? The level of finance that the GEF is receiving is not enough to be able to become an active investor in the transformation that we need. But we don't need huge amounts of money or to double and triple the replenishment process. At the same time that we can make the case for increased funding, we need to really explain how that new funding can be able to be invested in a transformational way. I've been working closely with the GEF for many, many years, and one of the issues that I believe the GEF can do better is in making their investment more policy-relevant. The big challenge is not narrowing the financial gap at the country level; the big challenge is phasing out those negative investments and perverse incentives that are already at the country level. It can be subsidies to sectors. It can be direct investment in activities that contributes to climate change or generates deforestation. So working strategically on those two areas [is], I believe, key to make an impact that eventually will amplify, consolidate, and upscale what the GEF is doing with the different countries. Do you anticipate that you'll seek to make any major structural or capability changes at the GEF in order to pursue those goals more directly? You don't need to do major transformation in terms of the programs at the GEF to do this, because the framework is already there. It's just being more focused on some of these issues that I've just been mentioning, because this is what we did in Costa Rica. GEF invested in Costa Rica for many years, and we here in Costa Rica brought out the lessons out of those investments, and with that we were able to transform our legal framework, develop more laws, change our institutions, phase out perverse incentives, create positive incentives — and then after 10 or 15 years, we were able to achieve our main conservation goals. How do you think the GEF can ensure that the private sector's role benefits those most vulnerable to climate change and environmental risk? Well, the private sector is 80% of the economy, so we need to upscale what we've been doing with them, no doubt about that. What the GEF has been doing in terms of co-financing, in terms of blended financing, is great and fabulous, but we need to bring new areas where we can work closer with the private sector, particularly with the capital markets and the banks in their effort to shift towards green finance. It's not just working to mobilize private resources in what GEF does, but also helping the private sector to move towards green finance. We invest way more resources in activities that generate carbon emissions and deforestation than what we invest globally in climate mitigation and adaptation and protecting nature. We need to redefine the role of the GEF in the sense that all financial sectors should seek full alignment with the Paris accords in all operations. Defining the GEF’s role in that is an area that I would like to work a lot — particularly because I understand that public and private actors must coordinate more to scale up financing that goes beyond the energy sector, which is an area where the private and public sector are working a lot. If we see how much resources we are investing annually in climate, probably 60% to 70% is invested in industrialized nations within the energy and transportation sector. The rest of the climate agenda has very limited resources. So it's not just an effort to finance climate action; it's also an effort to move towards green finance, and this is what can eventually give us the leverage and scale that we need at this point. Is there a limited window of opportunity to merge climate and environmental goals with pandemic recovery efforts? Yes, of course. We are just entering a global recession, and that global recession, as I said before, will put a lot of stress on governments to come up with quick, magical solutions, and there are no quick, magical solutions. This is where I strongly believe that multilateral agencies, which will be eventually supporting middle-income nations and less developed nations, need to understand that financial support in those economic recovery plans will be centered on their [nationally determined contributions] and biodiversity nature conservation commitments. That will give us the opportunity to move towards a new production-consumption pattern based on a new economic paradigm, and that economic paradigm should be human-centered, recognizing planetary boundaries and recognizing that planetary boundaries is not a limit to prosperity. It's a change of vision. I tend to believe that we have a couple of years to be able to set the proper enabling conditions at the multilateral and national levels to be able to move forward a very complex, very challenging agenda for the next decade. The decisions that are going to be taken in the next year and a half, two years will have a huge impact on how we will be doing by 2030, 2035.