The GEF was created to be innovative in its design, governance, and operation. Determining how the GEF would be "innovative" in technology, promoting policies, sector transformation, and business models, has been a central debate ever since. The GEF has evolved in many ways -- expanding its scope, adding more agency partners, testing new modalities, and more. Nevertheless, the world in which it operates has changed even more dramatically.
The GEF invests about $1 billion each year. Public expenditure will never be enough to solve major environmental problems. This means doing much more with the funds available: finding ways to leverage more investment for each GEF dollar, identifying creative uses of emerging technologies, and engaging a wider range of partners to promote policy and institutional reform.
All of the GEF agencies have extensive experience in supporting technological, institutional, and business innovations. The incentives for greater innovation in the GEF are clear: increased environmental effectiveness (to achieve deeper and wider changes), economic efficiency (to achieve more benefits for the same amount of investment), and the longevity of results (to secure self-sustaining mechanisms with durable outcomes).
This paper reviews the GEF's experience with innovation in technology, finance, business models, policy, and institutional change, and makes a number of recommendations in each of these contexts. In addition, it makes a number of cross-cutting recommendations on: defining a risk appetite; responsibility for innovation; cultivating innovation in design; and encouraging adaptive implementation and the exchange of lessons.