Memorandum submitted by the Department
for International Development
EXECUTIVE SUMMARY
The memorandum considers why it has proved difficult
to adequately account for environmental issues in the wider sustainable
development debate; sets out the new thinking which links poverty
reduction and actions to achieve the Millennium Development Goals
with more sustainable use of environmental resources; and sets
out in summary terms the likely impact of climate change, particularly
on the poor in developing countries.
The memorandum concludes that incorporation
of the environmental component of sustainable development is central
to lasting poverty reduction; climate change is just one of many
environmental factors that impact on the lives of poor people;
and that continued uncertainty about its precise impacts indicates
the need for pragmatic adaptation measures which respond positively
to existing environmental pressures and climatic variability.
INTRODUCTION
1. The effects and impacts of climate change
are a sub-set of the wider issue of the integration of environmental
issues into the policies and programmes of DFID and its country
partners, together with those of other bilateral and multilateral
development agencies. The Globalisation White Paper contains an
overall commitment to "equitable and environmentally sustainable
growth". The challenge is to translate this into effective
action on the ground.
ENVIRONMENTAL MAINSTREAMING
2. The UK definition of sustainable development
is "a better quality of life for everyone, now and for
generations to come". Sustainable development is often
interpreted as being only about the environment. We prefer to
see it as taking account in a balanced way of social, economic
and environmental aspects of development.
3. Within the totality of sustainable development,
it is however true that environmental concerns are often marginalised
in practice. The failure to adequately and appropriately incorporate
environment into sustainable development reflects governance/institutional,
market and policy failures:
(a) governance/institutional failures
— failures to integrate environment
issues into poverty and development planning processes;
— corruption and lack of transparency
by governments;
— weakness of environment ministries;
— lack of incentives for individuals
and government departments to work across institutional boundaries
to deal with cross-cutting issues such as the environment, particularly
where they perceive this will make their life more complicated;
— the exclusive association of environment
with environmental protection per se
— insecure ownership of, or open access
to, resources reduces the incentive to invest in their maintenance;
— externalities means that where a
producer can shift the effects of pollution onto others, there
is little incentive to limit the polluting activity;
— our knowledge of many ecological
processes and of our effects on them is still weak and may never
be fully reliable;
— the low level of public awareness
in many countries means environmental impacts are often discounted;
— individuals generally have relatively
short time horizons and pursue activities whose returns are higher
in the short run, but lower in the long run, than more sustainable
alternatives;
— some kinds of environmental damage
are irreversible, but many decision-making processes undervalue
the loss of options resulting from such a decision;
— more generally, the environment,
and the goods and services it provides, is often viewed as being
free.
— taxes and subsidies can prevent price
signals from reflecting scarcity and the real value of environmental
goods and services;
— poorly conceived interventions can
exacerbate problems and create perverse incentives which encourage
environmental degradation.
HOW TO
RESPOND TO
THESE FAILURES?
4. An evaluation published in mid-1999 concluded
that, while avoiding direct negative environmental outcomes from
its activities, DFID had failed to adequately incorporate environmental
issues into its policies and programmes. Its main conclusion was
"There is a gap between the high policy priority attached
by DFID to environmental issues, the value of projects marked
as having environmental objectives, and what has actually been
delivered in terms of positive environmental impact.... Environment
as a potential development opportunity—rather than as a
risk to be minimised and mitigated—has not fully been mainstreamed
across the bilateral programme".
5. In response to these conclusions, DFID
rethought its environmental agenda. DFID's over-arching objective
is sustainable poverty reduction to which all activities should
contribute. We therefore seek to clarify and give proper weight
to the link between poverty reduction and the use of environmental
resources. As set out in DFID's environment target strategy paper[1],
we have examined the links between environment and the health,
livelihoods and vulnerability of poor people. In broad terms,
the agenda has moved from one which "does no harm to the
environment" to one that "tries to do good", or
one that looks to exploit environmental opportunities rather than
to mitigate risks. The relationship in the three main areas is
set out below.
(a) Environment and health
6. Environmental degradation influences
the quality of life and economic opportunities for many people.
While communicable diseases are the greatest source of morbidity
and mortality for the poor, premature death and illness associated
with environmental factors account for an estimated 20 per cent
of the total burden of disease in developing countries. This exceeds
the toll from malnutrition. Water-related diseases, caused by
lack of access to clean water and adequate sanitation, claim an
estimated three million lives each year mostly of children under
five and exacerbate exposure to vector-borne diseases. Exposure
to indoor air pollution, caused by burning poor quality or dirty
fuels in inefficient stoves without proper ventilation, results
in nearly two million deaths of women and children annually. Exposure
to urban air pollution, primarily due to fine particles emitted
by households that burn coal and other dirty fuels for heating
and by two-stroke motorcycles and poorly maintained diesel vehicles,
causes close to a million premature deaths and severe respiratory
problems. Poor waste management can spread disease and is a source
of poor water quality. Finally, exposure to agricultural and industrial
chemicals and waste is a modern environmental health risk.
7. As with communicable diseases in general,
this burden of disease falls disproportionately on the poorest.
In both rural and urban areas, the poor are less likely to be
served by water and sanitation infrastructure and are more likely
to rely on dirty fuels for cooking. Urban air pollution affects
all urban inhabitants, but the poor tend to suffer more severely
because its effects are worse for those in poor health and because
poor people have limited opportunities to protect themselves or
to move to less polluted areas.
(b) Threats to livelihoods
8. Most rural households rely directly on
the services of natural capital stocks such as ecosystems, water
resources, land and soils, forests, and fisheries for their daily
livelihood. As the availability of these resources decline and
their quality deteriorates, livelihoods are threatened. There
are three major threats to the livelihoods of rural households.
Firstly, the overuse, mismanagement, and contamination of freshwater
resources. Almost a third of the world's population faces water
scarcity or stress. Rapid degradation of wetlands and coastal
zones is also a major environmental management problem, in part
exacerbated by over-abstraction of water and by pollution. Pollution
often results in poor surface and groundwater quality, on which
people rely for drinking and other purposes. Secondly, soil degradation
and erosion, often caused by the build-up of salts, poor irrigation
and drainage, poor cultivation practices, deforestation and overgrazing.
Such factors affect 30 per cent of the world's irrigated lands,
40 per cent of rain-fed agricultural lands, and 70 per cent of
rangelands. Finally, the rapid depletion of forests, fisheries,
and biodiversity, often as a consequence of unclear property rights,
perverse economic incentives and poor governance. About 70 per
cent of the world's fisheries are either depleted, overexploited,
or fully exploited. Global rates of forest loss have reached alarmingly
high levels. More than 20 per cent of the world's tropical forests
have been cleared since 1960 and a much larger area significantly
degraded.
(c) Environment and vulnerability
9. In 1992, Hurricane Andrew hit the US
and caused 32 deaths. In the same year, a cyclone of similar intensity
hit Bangladesh and caused 100,000 deaths. Poor people are particularly
vulnerable to both natural disasters and changes in environmental
conditions. Changing patterns of resource use have often undermined
traditional arrangements for managing and sharing such natural
risks as droughts, floods, fires, and earthquakes and responding
to economic shocks which in a globalised world have far-reaching
impacts. Pressures on resource stocks have prompted many poor
households to live and work in vulnerable zones such as floodplains,
drought-prone areas, or earthquake faults. Vulnerability is increased
by specialisation in the use of particular natural resources,
so that households have few alternatives when disaster strikes.
Furthermore, the poor have less capacity to cope. Access to credit
is more difficult than for better-off households, and the poor
have fewer assets to sell or consume in times of hardship. Natural
disasters, therefore, often have catastrophic effects on the poor.
10. The poor are also especially vulnerable
to conflict, which can stem from environment-related reasons such
as tension over access to, and control of, natural resources.
This can occur at the global level (eg access to oil); at the
regional level (access to water in the Middle East); at the national
level (diamonds in Sierra Leone); and at a local level (access
to wetlands and grazing lands on which the poor depend).
PRACTICAL POLICIES
TO REDUCE
POVERTY THROUGH
ENVIRONMENTAL INTERVENTIONS
11. A lot of work has been carried out internationally
on developing a framework for environmental policy interventions
that can improve prospects for the poor. They are summarised in
DFID's strategy paper and arise from joint work by UNDP and the
EC in the first phase of their poverty-environment initiative.
There are six main categories of intervention:
— strengthen participation by the poor
in decisions on access to environmental resources and services
through facilitating their participation in the preparation and
implementation of national and local plans, policies and strategies;
— protect the current natural asset
base of the poor through protecting the access the poor already
have to critical resources—especially in cases where the
poor are in a weak position to resist appropriation of these resources
by other groups—and through protecting the environmental
resources upon which the poor depend for their livelihoods;
— expand the natural asset base of
the poor through transferring ownership of natural assets to the
poor (such as the recognition of community forest law, the creation
of community forest rights or rights to other resources) and promoting
pro-poor land reform;
— co-manage and co-invest in environmental
services and resources with the poor, through promoting and strengthening
community management of environmental resources, and assisting
the poor to overcome the high initial costs for receiving better
quality environmental services (such as water supply and sanitation,
renewable energy, improved domestic stoves and waste management);
— promote environmental services, infrastructure
and technology that benefits the poor through a greater focus
on quality and equitable delivery of services that impact most
upon their health and livelihoods;
— make space for greater resource transfers
to the poor through reducing subsidies for environmental services
that benefit the non-poor (such as energy and water) and setting
up mechanisms that allow the poor to be paid for environmental
services they provide to other, often richer, groups.
12. There is general acceptance that these
links exist. However, it is necessary to move one stage further.
Clear guidance has to be developed on how these links can be incorporated
in programmes and policy processes for more sustainable outcomes;
and the relative importance of the environment among the hierarchy
of actions that can affect poverty. The issue of relative importance
will have to be determined on a country by country basis, forming
part of a wider process of analysis, debate and discussion in
the country about policy options.
13. The links between poverty and environment
need also to be looked at in relation to macroeconomic issues.
In countries which are developing poverty reduction strategies,
we have been trying to ensure that environmental issues are integrated
into their formulation and implementation[2].
This also links in with the Millennium Development Goal which
reads "integrate the principles of sustainable development
into country policies and programmes and reverse the loss of environmental
resources". If poverty reduction strategies adequately
integrate the environment and are developed in a participatory
way, with strong country ownership and commitment, focusing on
outcomes and means of implementation, then they and other planning
processes can be a proxy for a sustainable development strategy.
The label is not important.
14. Quantifying the costs of environmental
degradation can also be a powerful advocacy tool to change attitudes
in Finance, Planning and Energy Ministries in developing countries,
where important policies and expenditure decisions are made and
where environmental resources may still be considered a free good[3].
15. DFID has been instrumental (along with
IBRD, UNDP and the EC) in establishing an international poverty-environment
partnership, which has drawn in other bilateral and multilateral
agencies. This partnership seeks to build on highly beneficial
economies of both scale and influence in working together. In
addition, the involvement of many donor agencies with poverty
reduction strategies and their general desire to better coordinate
donor support to the integration of environment into them is a
further important objective. It will run for three years in the
first instance. One of the main initial outputs will be a jointly
authored paper on poverty and environment links which will be
presented at a high level at the World Summit on Sustainable Development,
to be held in Johannesburg in September 2002. The paper will seek
to change the perceptions of the relationship between poverty
and environment, and will therefore have a currency beyond the
Summit. We have also committed £900,000 over the next three
financial years to Phase II of the UNDP poverty-environment initiative,
which will concentrate on work in developing countries to establish
more evidence and practical actions in the relationship between
poverty and environment.
THE IMPORTANCE
OF CLIMATE
CHANGE
16. The first parts of the Memorandum have
been a relatively lengthy introduction to the specific subject
under scrutiny. This is because it is important to see climate
change in the context of local environmental issues, and against
the broader development problems (poverty, food security, health
and education) to which many countries will understandably want
to give emphasis.
17. Predictions about the impact and effect
of climate change have recently been updated in the Third Assessment
Report of the Inter-Governmental Panel on Climate Change (IPCC).
The key conclusions are:
— In the period from 1990 to 2100,
temperatures will rise between 1.4 to 5.8ºC; sea levels are
projected to rise between 8 and 88 cm; and the number of extreme
weather events will increase, but by an amount that cannot be
quantified;
— Projected changes in climate will
have both beneficial and adverse effects on water resources, agriculture,
natural ecosystems and human health, but the larger the changes
in climate the more the adverse effects will dominate;
— Given existing high atmospheric greenhouse
gas concentrations, climate change will continue to occur even
if emission levels are significantly reduced from their current
level.
18. The IPCC also made regional predictions
of the effects of climate change. These are summarised in Annex
1.
19. The atmosphere is the quintessential
global public good. It is immaterial from where a ton of CO2 is
released into the atmosphere. Its effect will be the same. Changes
in climate can only be dealt with by an agreement which engages
a sufficiently large proportion of the producers of greenhouse
gases. Although this Memorandum does not propose to go into the
detail of the international climate change negotiations[4],
it is hugely important that near universal agreement has been
achieved on the need for legal limits on greenhouse gas emissions.
20. However, from the perspective of the
main decision makers in developing countries, climate change per
se has not yet made much of an impact. There are a number
of reasons for this. Firstly, the very long time horizons, when
set against immediate exigencies, including conflict, HIV/AIDS
and economic crises. Secondly, the lack of certainty on the relative
importance of climate change as an issue, particularly uncertainty
on the optimal timing of investment specifically to deal with
climate change. Thirdly, the weakness of the institutional structure
in many developing countries, where climate change is often led
by meteorological offices, with a consequent emphasis on measurement
and weather forecasting, rather than developing policies to deal
with the longer-term issue of impacts, or mainstreaming these
issues more generally within their respective governments.
21. However, the two main issues for developing
countries are vulnerability and adaptation to climate change;
and mitigation of greenhouse gas emissions.
(a) Vulnerability and adaptation
22. Experience over the past two decades
suggests that vulnerability to extreme weather events has increased
markedly. Reflecting in part the pattern of development itself,
loss of life, displacement, and damage and destruction of natural,
social and physical capital have all increased, and the losses
are relatively greater for the poor in poorer countries. Climate
change will increase the probability of greater rainfall and more
extended dry periods, and the frequency and severity of droughts,
floods and storm surges.
23. In looking at issues of vulnerability,
it is vital to situate the response in the specific country, or
local, context. Activities required for the enhancement of adaptive
capacity are essentially equivalent to those promoting sustainable
development. Adaptation and equity goals can be jointly pursued
by initiatives that promote the welfare of the poorest members
of society eg by improving food security, facilitating access
to safe water and health care, and providing shelter and access
to other resources. However, climate considerations have rarely
been explicitly considered hitherto in public investment decisions.
This is partly because of the current lack of knowledge makes
it impossible to reliably predict the costs and benefits of adaptation.
Much more research is required. As a particular response to this
point, DFID has recently commissioned a piece of work to identify
the likely impact of climate change on the achievement of the
Millennium Development Goals. The first results, which will build
on earlier work on modelling climate change, should be available
towards the end of 2002.
24. Some broad areas of work to address
these issues could include developing frameworks for incorporating
climate risks in economic analyses; supporting specific vulnerability
assessments; evaluating the longer-term consequences of disasters
to increase awareness of the potentially serious threat that variations
and changes in climate pose to sustainable development; and supporting
pilot initiatives to promote community level activities aimed
at, inter alia, reforestation, conservation and restoration
of wetlands, protection of mangroves and coral reefs, and strengthening
of local institutions to improve the capacity of poor people to
cope.
25. One relevant proposal to come out of
the Marrakech conference was that funds should be made available
for least development countries to produce national adaptation
programmes of action (NAPAs). These would provide the framework
for developing countries to examine the adaptation needs and option.
Specific guidelines have been developed with respect to the development
of proposals for priority activities to address needs arising
from the adverse effects of climate change. However, all our experience
shows that NAPAs will not be successful if they are stand alone
programmes: they must be fully considered in the context of a
country's overall policies, programmes and priorities. Otherwise
they will fare the same as the "enabling activities"
of the environmental agreements, where evaluations have shown
that there has been little practical achievement.
26. Policies, programmes and plans across
all sectors—including agriculture, health and infrastructure—need
to take into account the potential impacts of climate change.
DFID is working in a number of countries, such as Bangladesh—a
seriously affected country—to support ministries and officials
understand the impact and identify appropriate responses. We anticipate
extending this work to other countries, particularly those in
sub-Saharan Africa where climate change is perhaps less dramatic
but nevertheless has a considerable impact on livelihoods which
are based largely on natural resources. We are also funding work
to develop a practical and portable climate model designed to
relate climate change to impacts at the appropriate planning level.
(b) Mitigation of greenhouse gas (GHG) emissions
27. The climate change negotiations are
built on the concept of "common but differentiated responsibility".
Based on their involvement in the UN Framework Convention on Climate
Change, developing countries recognise the implications of global
climate change and the need for all nations to assume responsibility
for protecting the global atmosphere. However, because the contribution
of developing countries to the GHG concentration has been small
relative to the developed countries, and because of their urgency
of their short-term needs of providing food, energy and other
vital services for the poor, the Kyoto Protocol imposes no restrictions
on GHG emissions by developing countries. However, it is worth
noting that should present trends continue, emissions from the
developing world will overtake those from the developed world
by 2015.
28. Many developing countries have been
making big efforts to improve the energy efficiency of their economic
growth. (This does not often happen, though it can make good economic
sense to address energy efficiency). The most striking example
is China, where the energy intensity of production has declined
by about 35 per cent since 1985. This has been largely achieved
by removing energy price subsidies, resulting in fiscal, global
and local benefits (including significant so-called "ancillary
benefits" in the form of reduced illness and pollution related
damage). It also show the scope for reducing emissions on a "no
regrets" basis ie by addressing market or institutional failures
which are of immediate benefit in any case. The Clean Development
Mechanism, introduced as part of the climate change negotiations,
is also designed to help with mitigation while contributing to
the sustainable development of developing countries.[5]
29. It is also clear that the volume of
GHG emissions are highly dependent on the development pathway
chosen. Significant technical progress in cost-effective, climate
friendly technologies has been made in the past five years and
at a faster rate than expected. Where these technologies are also
economic, and compatible with the human capacity in developing
countries, adopting them will obviously result in a development
path which is much less energy intensive.
(c) DFID and climate change
30. As climate change issues are inextricably
linked with the overall objectives of projects and programmes
funded by DFID, it is impossible to use the normal statistical
tools to assess the value of resources used to support climate
change. We therefore appointed a consultancy firm to go through
all our projects that might have had a climate change component.
They reviewed 604 projects over the period 1997-98 to 1999-00.
The results of the study showed that around £201 million
over the three year period could be attributed to climate change
activities. Projects which were examined included projects labelled
as sustainable agriculture, biodiversity, sustainable forest management,
energy efficiency, desertification, and water and sanitation.
By far the largest recipient was India where the climate change
commitment values of projects scored totalled £164 million.
(d) The role of the Global Environment Facility
(GEF)
31. The GEF provides grants and concessional
funds to cover the additional costs incurred when a development
project or programme also targets global environmental objectives
in four focal areas, including climate change. The GEF was established
in 1991, it has allocated $3.4 billion to projects and programmes,
of which around $1.3 billion has been allocated to climate change.
Disbursements for climate change stand at $386 million as at June
2001. GEF climate change projects are organized into four areas:
removing barriers to energy efficiency and energy conservation;
promoting the adoption of renewable energy by removing barriers
and reducing implementation costs; reducing the long-term costs
of low greenhouse gas emitting energy technologies; and supporting
the development of sustainable transport.
32. The UK has been a strong supporter of
the GEF, having provided around £215 million since its inception.
Negotiations are currently under way for the third replenishment
of the GEF, to cover the period 2002-06. The UK has called for
a 50 per cent increase in the funds available from $2 to $3 billion.
Negotiations are likely to be completed by April 2002.
(e) Other international players
33. Many other international organisations
and agencies are also active in this area. The World Bank has
recently established a Vulnerability and Adaptation Group. UNDP
is in the process of developing its own climate change and adaptation
programme of action and many other bilateral donors are developing
similar programmes. We intend to work closely with others to share
knowledge and experience and to encourage a wider understanding
of climate change and its links with poverty reduction.
CONCLUSIONS
34. For development to be sustainable, environmental
considerations, along with economic and social ones, need to be
integrated into overall country policies and programmes. This
applies as much to developed, as to developing, countries. For
DFID, the key is the extent to which the integration of the environment
can contribute to sustainable poverty reduction. The Memorandum
sets out how we believe this can be done. We recognise that climate
change, while important, is only one factor in the set of environmental
opportunities and risks.
35. Up to now, the actual and potential
impacts of climate change have been marginal to the development
agenda. The most important way to bring this to the attention
of policy makers in developing countries is to focus on vulnerability
and adaptation, as well as the mitigation of emissions (although
it makes good economic sense for growth strategies to address
the efficient use of energy resources). But it is vital that adaptation
is not treated as a discrete activity. Any particular development
option, and set of policies intended to influence the structure
of economic development, will influence climate change. The reverse
is also true: climate change will influence development options.
Identifying and capturing synergies for both policy areas should
lead to better, more resilient and sustainable economic development,
more secure livelihoods and to more effective action to address
climate change.
1 "Achieving sustainability: poverty elimination
and the environment", DFID, October 2000. Back
2
The IBRD have been regularly reviewing poverty reduction strategies
on the extent to which the environment has been integrated. Some
improvement has been noted. See Annex II for the relevant publication. Back
3
Some estimates that have been made of the costs of environmental
degradation are 8 per cent of GDP in China; 2.3-4.6 per cent in
Pakistan; 4-6 per cent in India; and 4-12 per cent from the degradation
of natural resources alone in Uganda. Back
4
DEFRA are submitting their own Memorandum. Back
5
The CDM will be covered in detail in the DEFRA Memorandum. Back
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