Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 160 - 179)



  160. Because we do not have sun, and frankly, we do not need them.
  (Clare Short) Yes, but this is a myth.

  161. It is not a myth; it is a reality.
  (Clare Short) It is not. Please. This is very important. This is a specific example of the Northern thinking projecting on to the south.
  (Mr Bennett) The whole issue of energy is one that, as you well know, the prime source of energy in most developing countries at the moment is wood, charcoal and other sources. Solar energy has many attractive features, particularly for small electronic kits and things like that, but as you well know, there is a big problem storing that, because the sun is not out when you want the energy most.

  162. Not in most of the world we are talking about. The sun is rather more pervasive in the poor countries of Africa.
  (Clare Short) The sun is not out at night when you want light, for example. That is the storage point.

  163. Of course not, but it is during the day when you are doing the cooking.
  (Clare Short) This is a man who has spent a lifetime working on these issues.

  164. With respect, is it not very dangerous to take an adversarial view to environmental questions, when in fact some of the things which are being done technologically in the Northern world are absolutely applicable to the Southern hemisphere, the poorer world, even more than the Northern?
  (Clare Short) I do not believe, Chair, with respect, that I am taking an adversarial view.

  165. You seemed to be taking an adversarial view to what Joan Walley was saying.
  (Clare Short) Yes, but she was quoting an answer I gave to a question as though that was really problematic, and I was explaining why I gave that answer. The interest in renewables and the rest in my Department is great. In fact, we are working on an energy strategy, which is coming to me in March, and we will probably share with you, and that will work through all these issues very carefully. Then it is becoming adversarial between us. I quite like that way of proceeding. But we have thought through and do very sincerely mean these positions. I understand the good intentions of people who think that every poor family in the world could have a solar panel and that might solve the problems of the world, but it is not as easy as that, as Andrew Bennett is trying to explain.
  (Mr Bennett) Solar energy has been shown to be very valuable for providing power at particular times at particular levels, but the types of energy needed for cooking and the various other sorts, the need at the moment is filled by fuel wood and charcoal, and in some cases animal dung. There are of course other sources of renewables, for example, wind energy. I attended a meeting the other day where people were advocating very strongly the provision of wind energy.

  166. It is more expensive.
  (Mr Bennett) As solar is expensive, wind is expensive.

  167. Wind is more expensive than solar in these parts of the world we are talking about.
  (Mr Bennett) It is all more expensive than fuel wood and what is currently being used. Therefore, we do have to look very closely at how one would meet that differential in cost and the reliability of supply. Nobody is against renewable energy. Indeed, there is an awful lot of work going on. But at the moment it does not offer the same flexibility, and it is more expensive, and until such time as one can find ways of making it both practically and affordably available, we do need to recognise that most of these communities will continue to rely upon their more traditional sources of energy. The important thing is that they do grow trees, and they do replace them in the first instance, because trees not only provide fuel wood but they provide fodder and other amenities. I am not trying to turn the question. I just think there are no single silver bullets, and we have to move forward logically. Let us find the source of energy that works best and find ways of ensuring that it is affordable.
  (Clare Short) We are talking about countries with a GDP of $200 a head. Ethiopia is significantly less than that. If they are making their poverty reduction strategy and deciding as a country how they are going to grow their economy, how they are going to invest in education, health care, energy, transport and so on, it is all priorities. If a renewable is more expensive, they are unlikely to go for it, because every farthing is stretched to try and take forward the provision of services to people.

Joan Walley

  168. Underpinning my question is the issue of corporate accountability. It is all very well to leave things to voluntary arrangements, but it is how we link into that the issue of corporate accountability.
  (Clare Short) As you know, there is an OECD Convention that is voluntary on corporate accountability. There is more and more interest amongst big corporates in social and environmental responsibility codes, both because as transnationals really become transnational and invest massively in their labels and titles, they cannot afford the damage to their reputation of the exposure of some sort of sourcing that is destructive, or child labour stories or environmentally damaging stories. So more and more companies are interested in cleaning up their act and being socially responsible, not just because there is some well-meaning director or two, but out of their own self-interest, which I think is good, because it is more sustainable and long-term. The experience of companies that have gone down this road is that it makes you a more effective company, that as you manage more carefully all the resources you are managing and all your staff across the world, it is also economically beneficial and tends to lead to better investments and a better managed organisation. That whole field is moving forward very rapidly. We engage with it seriously in all parts of the world. We have this ethical trading initiative, for example, that we now have £100 billion a year turnover of British retailers in membership. It is a partnership with NGOs and the trade union movement, funded and supported by my Department—not large amounts of funding, but just helping it to organise itself and go forward—cleaning up the supply chain right across the world, with monitoring. I think that is fantastic, because £100 billion annual turnover is a lot of resource, and if you get the big companies—and most of the big British retailers are in it—voluntarily but objectively monitored cleaning up their supply chain in terms of labour standards, that is a heck of a lot of human beings whose lives are improved. So we are doing a lot of work on that. Since the new code on pension funds we are beginning to ask them simply to record whether they have an ethical code. We are beginning to look at how we can work with that.
  (Mr Foy) The issue of whether or not we should be applying the Convention on transnational corporations for corporate social responsibility has actually been around for quite a while; it is not something which is particularly new. I think the question we and colleagues in the DTI have struggled with over the years has been to identify what in practical terms it could achieve beyond the power of the market, which is far more important and far more influential in determining the way in which corporate entities direct their resources than any amount of legislation. There are two practical issues which are worth bearing in mind here. The first is that the stylised notion of transnational corporations as having a Northern home with Southern associated entities is rapidly changing. Many of the large transnational corporations are actually now Southern-based, and there are intricate webs of organisations which would make tracking such arrangements very difficult. Also, many of the worst offenders regarding corporate social responsibility are Southern-based, not Northern-based. Those of us who work in the forests sector are well familiar with the actions there. The sense really is what could be practically achieved beyond market-based consumer approaches in terms of applying the Convention.

Mr Challen

  169. I was interested to hear what you were saying about not seeking to impose necessarily Northern standards on Southern developing nations. In that context, I was also interested in your reply to Gareth Thomas, when you said, after Michael Fabricant had spoken, "We really need proper privatisation under good regulation." If we are not seeking to impose Northern standards through regulation, does that not leave this equation rather lopsided, and are we not in fact now transplanting the environmental agenda set in Rio with a new trade agenda which will perhaps emerge at this summit, something perhaps which is more related to things called the Washington consensus, for example, where the north seeks to create its own economic terms with the south?
  (Clare Short) No. For example, in India, if you take energy and electricity, you have state-owned, very inefficient, highly subsidised electricity provided virtually free to rich farmers for irrigation. You have constant power cuts, the lack of availability of electricity, which is a constraint on economic development, which is crucial to the poor. If your population growth is faster than your economic growth, you get growing poverty. The public revenues that should be being spent on health and education services for the poor are being sucked into massively subsidising electricity supplies. We as a Department have been engaged in India in trying to support electricity reform in order to release the revenues in order to get health and education for poor people. So we are not coming at it because we think it is some kind of theoretical good idea; we are trying to help countries run their economies and their public finances in a way that enables their economies to grow beneficially and provide decent public services for people. We are not coming at it for a theoretical reason; it is a very practical reason in order to improve services for poor people and reduce poverty.

Mr Jones

  170. Minister, I want to take you back to an earlier characterisation you made when you described the Northern green environmental agenda and the Southern development agenda. The Committee understands what you mean by that, and you have gone on to describe it in more detail later on, but surely you will concede that it is not quite that simple, that deforestation, soil erosion, problems of inundation from sea water are predominantly third world problems, because the Northern world is rich enough to take care of these things. The environment is a third world issue, every bit if not more than a Northern world issue. Characterising a Northern agenda as the environment agenda, some of us on this Committee will think of one or two Northern countries which we do not necessarily associate with the green agenda. Is there not a danger that, however sincere your view of pushing forward this developmental process and readjusting the level at which we look at the environment, some countries in the north, and some very rich countries in the south perhaps, will wish to use it in order to avoid their environmental commitment?
  (Clare Short) No. I think the truth is very important and very powerful in all things, and even if sometimes it creates strains and paradoxes, we have to work through it. We cannot not speak the truth because some badly intentioned nation might exploit the truth. If the nation I think you might be talking about would listen to me more about development, it would please me greatly. I do agree with your first proposition, that deforestation, soil erosion and so on are massively important questions for developing countries and poor people but, for example, what we know in our forestry work is that poor people will continue to chop down trees and use the resources of the forest if they are desperate and if they have to, and even to get land that is soon sterile if they have no choices. But if you give them some control over the resources of the forest and the future of the forest, they will manage it sustainably. If they have no power, and some corrupt company is coming and stealing all the logs and destroying it, then they will take as many logs as they can take. So the issue of how you deal with the erosion of forestry gets down to due respect for people who live in the forest. You look at their lives, you think how can they live in the forest in a way that the forest can be sustainable, and their lives will be better. The environment is crucial to poor people because they are so dependent on it for fishing, for wood, for food. They make their own lives out of the environment. I do a lot of meetings around the country on the development agenda of the UK, and a lot of very well intentioned environmentalists and ecologists come to those meetings, and they frequently say, "Trade has got to stop. No transnational investment." They mean it. They are very sincere. They are living in a country with all the fruits of multinational capital in every high street. They arrange their meetings on the internet and have their mobile phones and their Nike trainers, and they have a well-intentioned rural idyll in their head about Africa and Asia, and people being close to nature and close to God, and not wanting their life despoiled by development. There are a lot of people like that. They mean well, but in the mean time African children are dying. People desperately want enough development so that their lives will be better but that is respectful of their environment. I want to try and encourage environmentalists to turn the telescope round the other way and ask, "How can the poor of the world have a better life within a sustainable planet? How can we support and guarantee the changes in the way we manage the planet that guarantees development to them in a way that will be respectful of the environment?" The poor people who live in rural areas, which is still the majority of the poor, though the world's population is urbanising very fast, are much closer to the environment than we are. They live in it, beside it, and use it in order to survive. I hope you understand my answer. I am not having a fight here for the sake of having a fight. I have this argument all the time, and people constantly say, "Oh, no, we don't want any trade with poor countries. They should hide behind their tariffs. Development is too materialistic." That is all wrong. That is sentencing the poor of the world to be marginalised and impoverished for all time. I have this battle endlessly with well intentioned people.

  Mr Jones: I do not think you need to have that battle with this Committee.

Mr Thomas

  171. I am a little bit concerned from the evidence we have been having as we go towards the Johannesburg summit as to whether anything will be achieved there at all. The reason I say that is because I can see very clearly where you are coming from, Minister, and I can see very clearly how the other aspects of sustainable development you want to see strongly pushed forward at Johannesburg need now to come more strongly forward. It is clear that we have lost a lot of opportunities in the ten years since Rio to push the agenda within a sustainable context. That is something that needs to happen. But the one thing that could be said in favour of Rio was that it very definitely put the environment at the top of the world agenda. Nobody much knew about sustaining the environment and degradation of the environment before Rio. It may have been a Northern process, but it has been a process that has prompted the technological changes that we saw in Germany, which could be of benefit to developing countries. What will happen in Johannesburg? It seems that there is this tension between the Northern environmental agenda and the more Southern-based development agenda. It is also clear that the majority of the representation of the national governments that will be there—the NGOs will be different—will still be environment ministers. You will be there, and you have written to other OECD ministers asking them to take an active role as well. Is there not a danger that this whole thing will collapse into a mess and we will lose sight of trying to keep these key principles of sustainable development: the economy, the social development and the environment? If Rio could be blamed for putting a little too much emphasis on the environment, Johannesburg will not succeed in getting that social development side of the agenda, because it is going to implode.
  (Clare Short) I think you are right about Rio, and I think it was a big shake for the world. It did come out of the Northern agenda, saying, "Think about the environment." I think it was very symbolic that Mrs Thatcher, now Lady Thatcher, went. She had never said a lot about the environment, but the power of that summit is an example of it shifting the conversation in the world, and that was important. But that was an environment perspective. Maybe the world had to go through this. It was not a sustainable development perspective. What I am really hoping for, and I am optimistic about, is that out of Johannesburg we will get a sustainable development perspective, so that having broken through and to get people thinking about the environment, that will become a more sophisticated understanding.

  172. Hopeful or optimistic?
  (Clare Short) Hopeful. It could go wrong. UN conferences can always go wrong. My biggest fear, to be honest with you, is that if the financing for development conference in Monterrey goes wrong, and if the international atmosphere sours, Johannesburg will start with a sour atmosphere. There are real dangers here.


  173. Is not the other danger, Secretary of State, that because of this fear of failure, which Mr Prescott was very concerned about on Monday when he came to this Committee, has meant that our ambitions are so low, because we are afraid of failing, that almost nothing will be achieved from that point of view either, from Monterrey or Johannesburg?
  (Clare Short) No. My own view on Monterrey—and we have put a lot of work into that—is that the document encapsulates the best possible way of promoting development for the poorest countries and people. Quite a lot of the preparatory process is building a new commitment and consensus in the world about how best to do development which will most rapidly reduce poverty. I think that has gone well. The danger is that the developing world is expecting pledges of more development assistance, and that might not be forthcoming, and that might make people quite bitter. If the atmosphere is bitter after Monterrey, that is the atmosphere in which we will go into Johannesburg. Then I do not quite know where it will be. You all know what the current state of the world is. There are some very bitter and harsh things going on in the world. If that all started playing in, we could get some very nasty UN conferences because of that atmospheric. But I am still hopeful, and I personally think it will be a big achievement if out of Johannesburg we get, ten years on from the achievements of Rio but with just environment, a new shake in the world agenda—it is interesting that Tony Blair committed to going early. It had that power to pull him in—that commits to sustainable development rather than environmental protection. Whatever the specifics, if there is that mind set shift in a significant way, and there is more and more understanding across the north, among radical young people, that we have got to work to guarantee development for the poor sustainably, rather than a lot of the well intentioned energy going into an almost anti-development agenda, I think that would be a great gain, and I do think changing ideas in the world at a time like this is very powerful.

  174. I appreciate that, and I think it is an interesting conundrum for what you are trying to do in the north. You have set yourself up to try and change some thinking around how the development agenda is dominated by the north. It inevitably is, because this is where the money is. That is one of the difficulties. I appreciate Monterrey is coming up first. How much will international aid, that is to say, the grant money agenda be there? Surely, if we are going to change some of the perceptions and the ways that we are trying to achieve sustainable development in developing countries, one of the things that we have to do, if we are not going to impose our environmental standards on them and hold them back because of that, as a quid pro quo, is that we have to perhaps fork out a little more to help them along the way so that they can meet minimum environmental standards sustainable within their own economies, but that will also help us trade at an open and fair trade level with those developing countries. None of that can be achieved without money. How realistic is it that serious talk of money will be there in Johannesburg, or is that going to be flushed out at the other conferences, Monterrey and into the World Bank and will that in itself not lead to a great deal of dissatisfaction?
  (Clare Short) This is the danger. This is the very serious danger. We need more and better aid. We need a change in the mind set about what aid is for, not for hand-outs and projects, but to help countries have the capacity in their systems to manage their economy, to regulate their banks, to run health care and education, to have the capacity of a capable modern state, and we should see aid as an investment in helping countries put those kinds of conditions in place, and then grow their own economies and run their own services. We and some others have moved very much in that direction. There is 50 billion of aid in the international system. Both the World Bank and former President Zedillo of Mexico have done studies about how much aid is needed to get the world to meet the Millennium Development Goals, as they are now called. The lowest estimate is a doubling of the 50 billion. Actually, of the 50 billion we have, it could be increased in value if it were better deployed. Particularly the EC's money is skewed and is moving more and more away from the poor, for example. My own view is that the optimistic scenario for Monterrey would be a commitment to more and better use of aid, and actually, if everyone were to focus more on where the poor are and backing reform, because that is where aid is most effective and brings very significant advances, we could increase probably by 50 per cent the current 50 billion in value. I think it would reconnect with our public, who would see aid being effective and would be more supportive of it. That is what we are working for, but the climate is not good. The US are not planning significant new commitments, though they have talked about something on education. Let us keep hoping and working. Germany is currently going through a difficult time and is not proposing any increase. Japan is cutting, and Japan is a very big provider, the second biggest economy in the world. This makes Europe's position crucial. There has been an effort going on through the Commission, well led, to get Europe to be on the front foot, and promising a commitment that European countries will all agree by 2006 to increase at least to the European average, which is 0.33, and then of course the average will go up and you could commit that everyone would move forward again, something which just offers more and better, and that battle is going on in Europe at the moment. In terms of Monterrey, that is where things are, and the real funding thing is Monterrey.

Ian Lucas

  175. You have already referred extensively to the UN Millennium declaration of the goals that are clearly at the heart of what you want to see happen in the future, and I heard Kofi Annan say very much the same thing last week. You talked in your memorandum to the Committee about the need for practical action to carry forward the agenda to achieve those goals. This is really, I suppose, what the conferences are about during the course of this year. How can practical action be taken—I have to mention this—on a morning when the United States has imposed protectionist tariffs? What effect will that have on the atmosphere in the lead-up to the Monterrey conference so far as taking forward the agenda that you want to see, Kofi Annan wants to see, and I want to see?
  (Clare Short) We have had battles through the WTO, on bananas famously, and hormone beef and so on, so this is not the first, but this is very big, and it is a crude defiance of WTO rules. The US, because it is such a big country and such a wealthy country, finds it difficult to believing that cooperating on a multilateral rules basis system should apply to the US. It is very difficult, but we have to keep working at it. My greatest fear about the World Trade Organisation is that the rich countries will break away from it, saying, "We can reach bilateral and regional deals; we don't need a rules-based system," and the poor countries will not get the trading opportunities and their chances of securing development. This is very serious. If it can be resolved within WTO rules, that is good for the world, because it means we have a system where even the biggest and richest countries, if they apply those rules, have a process for sorting things out. If we do not resolve it, and if it endangers the authority and future of the WTO as one of the multilateral bodies through which we have to manage our sustainable world, then I think we are in trouble.

Mr Francois

  176. Secretary of State, can we talk about supporting the international preparations for the summit and the role your Department has played in that? You have already told us that you have written to all OECD development ministers to encourage a high level of attendance at Johannesburg. Can you give us some idea of the sort of response that you have had to that?
  (Clare Short) We have had a great flurry of replies, basically positive, and I think the letter was useful in that lots of development ministers who do engage in this discussion started thinking, "Oops! I had better get more engaged in the preparations for Johannesburg." I think it helped to prompt that and that was useful and good.

  177. No-one has said they are not coming?
  (Mr Foy) All the countries will be attending, and development ministers. At least half have indicated at this stage that they will all be attending.

  178. Will DfID be seeking to engage the general public here at home about the world summit, or are you concentrating most of your efforts externally?
  (Clare Short) We are agreeing a communications strategy with DEFRA. This is another of my many obsessions. All the NGOs think they have to go to the summit, because these are intergovernmental bodies. Proper accountability is through parliament and civil society at home, and each country should be accountable for what it does at international meetings in that way rather than people thinking the only influence they can have is if they can get on a plane and travel there, which is very much the atmospheric often. So yes, I am very keen, and obviously we need to engage parliamentarians more, and they should check on government positions before they go or when they come back. That is proper accountability.


  179. That is why we are having this meeting today.
  (Clare Short) I know, but it needs strengthening right through the system. Lots of these international conferences are mysterious and do not get discussed in parliament. That is a real malfunction as global agreements become more and more important. So yes, we have been working with DEFRA on a communications strategy. My Department has over two years had a series of development fora across the country, drawing in some of these people with whom I have these discussions, just to talk about where we are, and we have a paper on sustainable development. That is one of the three issues we are taking right through the country on this round. We are trying hard to do that.

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