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In the run-up to the Rio+20 summit, the Ecologic Institute investigated the current system for financing international environmental governance (IEG). The study was commissioned by the German Federal Agency for the Environment and is available for download.

In June 2012, the international community will meet in Rio de Janeiro. 20 years after the first Rio summit states will try to give new momentum to the global sustainable development agenda. Two topics are of particular relevance – the green economy in the context of the fight against poverty on the one hand, and the institutional framework for sustainable development on the other. Different proposals are on the table, including the creation of a UN organization for the environment, new sustainable development goals and supporting countries in their transition towards green economies.

Such ambitious goals can only be reached with sufficient funding. This brings the international architecture for financing environmental projects and activities as well as the funding system for multilateral environmental agreements into focus. Unfortunately, the current architecture for IEG finance is not very transparent, consisting of a growing number of bilateral and multilateral actors, funds and financial mechanisms. A comprehensive system for tracking is missing, which makes it difficult to gain an overview of the IEG funding landscape.

Against this background, the current and future shape of the IEG finance system is an important issue, and there are numerous questions in this context: Where do funds come from and who decides on the rules by which they are spent? Who controls how funds are used, and how can new financial mechanisms and funding from private source be integrated into the existing system in an appropriate way? How can coherence and transparency of the system be approved?

In this project, which is funded by the German Federal Agency for the Environment, the Ecologic Institute compiles a study providing a qualitative, and to a lesser extent, quantitative overview of the current system of IEG financing. Some of its flaws are discussed as are options for its improvement – all with a view to formulating recommendations for the Rio+20 summit.