In 1990, the World Bank and the United Nations created an international financing mechanism known as the Global Environment Facility (GEF). Funded by a small number of countries from the industrialized north, the GEF is designed to provide concessional financial assistance to lower and middle income developing countries for the incremental cost of projects with global environmental benefits. Following the 1992 Rio Conference, the GEF was appointed as the financing mechanism for both the Convention on Biological Diversity and the Climate Change Convention. Despite its short existence, the GEF has attracted a great deal of criticism. Drawing on evidence from selected GEF pilot projects, it is argued that much of the criticism is unjustified. Some constructive policies designed to assist the GEF successor, the GEF II, are outlined. The GEF II has become a more effective mechanism to protect the global commons and promote sustainable development.