The GEF was established by the World Bank, the United Nations Environment Program (UNEP) and the United Nations Development Program (UNDP) in 1991 to fund projects in developing countries that provide global environmental benefits.
At the time of the adoption of the Convention in 1992 the GEF was itself still at an early stage of development, its first three years of operation (1991-1994) having been conceived as a pilot phase.
The Parties to the Convention assigned operation of the financial mechanism to the Global Environment Facility (GEF) on an ongoing basis, subject to review every four years. Conference of Parties (COP) 2 adopted a Memorandum of Understanding (MOU) with the Council (1996) that determines their respective roles and responsibilities (decision 12/CP.2 and Annex). It states that the COP is to decide on policies, program priorities and eligibility criteria for the financial mechanism and communicate to the Council any relevant policy guidance adopted at each of its sessions. The Council commits itself to ensuring the effective operation of the GEF in conformity with this guidance and to reporting regularly to the COP on its activities related to the Convention. In fact, the GEF has reported on its work related to climate change to the COP every year. The financial mechanism is accountable to the COP, which decides on its climate change policies, program priorities, and eligibility criteria related to this convention, based on advice from the SBI.
COP 7 also established three special funds: the Special Climate Change Fund (SCCF) and Least Developed Countries Fund (LDC Fund), under the Convention; and the Adaptation Fund (AF), under the Kyoto Protocol. The SCCF and the LDC Fund are operational and managed by the GEF. Parties are still negotiating how to put the Adaptation Fund into operation. Funding for climate change activities is also available through bilateral, regional and multilateral channels.
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