Substantive and Procedural Rules in the Climate Regime - How Organizational Autonomy Affects Funding Decision-Making in the Global Environment Facility, Adaptation Fund, and the Green Climate Fund

Since its inception, the Global Environment Facility (GEF) has come under scholarly scrutiny, drawing vehement criticism by developing states as being overly donor-driven, not least because of the strong grip of the World Bank (WB) on the GEF Secretariat. This widely accepted narrative proves overly narrow and misdirected, ascribing superfluous influence on complex decision-making procedures to single agents. Inversely, funding decisions in the climate regime are heavily affected by organizational procedures designed to reduce the implications of actors’ preferences, like member states or bureaucratic agents, and create a criteria-based organizational decision rationale. Under the United Nations Framework Convention on Climate Change (UNFCCC) member states have assigned part of the regime’s financial mechanism to the GEF, financing mitigation projects, and subsequently complemented it with the Adaptation Fund (AF) and the Green Climate Fund (GCF) as additional funding schemes within the framework of the Convention, to allay recipients’ displeasure through rectified institutional designs with a focus on adaptation projects. Theoretically, the paper shows how organizational structures, including funding criteria and organizational objectives can reduce or fully abolish the opportunities for the pursuit of member state preferences and create a distinct organizational rationale according to which organizational decisions are made, introducing organizational autonomy. Accordingly, it is argued that different organizational structures should lead to distinct organizational rationales, limiting influences of agents and demarcating members’ room for action, even if memberships of decision-making bodies are alike and members retain final decision-making power. Empirically, the paper contrasts the organizational rationales of funding procedures in the GEF with the AF and the GCF, comparing the three institutional setups established by COP decisions and the resulting substantive and procedural rules of funding decision-making. I investigate the expectation that more comprehensive and specific organizational rules, procedures, and criteria engender an organizational autonomy guiding funding decision-making procedures while stifling unwanted influences of bureaucratic agents and members. The pervasive primacy of substantive and procedural rules throughout the entire funding process is highlighted by showing that they not only guide member states when taking final funding decisions, but already navigate initial project development, and steer secretariats and scientific and technical advisory panels in their review processes midway through the project cycle. By comparing different financial mechanisms with differentiable organizational rationales, a more nuanced explanation to the oversimplified belief that inefficacious funding decisions are the result of defiant runaway agents is presented. This work contributes to existing literature in two fundamental ways: First, the analysis highlights that shallow and unspecific rules and criteria leave ample room for the introduction of parochial interests by weakening the organizational rationale, and thus, undermine the ability of an organization to fulfill their objective, relativizing undue scholarly attention on actors in biasing outcomes. Specifically, the ubiquitous influence of organizational structures during entire decision-making procedures is demonstrated. Second, conducting an unprecedented comparison of the institutional designs of the three principal climate funding mechanisms under the UNFCCC, their ability to achieve analogous objectives is evaluated, drawing valuable lessons for similar institutions, like the novel Global Biodiversity Framework Fund.