Memorandum submitted by Christian Aid
INTRODUCTION
1. There are a multitude of environmental challenges
facing poor communities. The most pressing of these and the one
which is at the root of many of the others is climate change.
2. Action on climate change in particular, and
sustained work on the conservation and wise use of natural resources
in general, are bound together in the DNA of development and should
not be separated.
3. Most poor people depend on their natural environment
for survival and livelihood. Because many also live fragile and
marginal existences, any change in the nature of that environment
will affect them profoundly. Climate change therefore impacts
on poor people first and worst with many already suffering its
effects (Up In Smoke, Working Group on Climate and Development,
2004).
4. It is also clear from climate-related disasters
that women are more vulnerable to climate change than men and
from the energy dynamic in poorer communities that women stand
to gain more from harnessing renewable sources of energy (for
instance, most poor people burn wood for cooking, which women
are usually obliged to spend long hours collecting).
5. But poor people also need more secure means
of making a living, which means that new jobs must be created
in the countries in which they live. While this may mean more
carbon emissions in the immediate term, it can no longer be argued
that growth can be achieved at the expense of the climate. The
opposite is now true. For growth to favour poor people it must,
among other things, be achieved wherever possible using clean
technologies.
6. Christian Aid knows this not only through
its extensive work on global economic justice, but from decades
of experience working with poor people in their own communities
where sustainability and stewardship of resources have always
been the byword. The agency has long-funded projects and worked
with partner organisations that conserve water and vegetation
and has learnt from poor people—the experts on the climate
writ small—about the profoundly worrying changes that are
taking place.
7. Christian Aid welcomes DFID's increasing focus
on the impact of climate on poor people. But fundamental changes
in pan-Whitehall policies are needed with a major commitment to
joining up across government. Through the lens of climate change,
British transport and energy policy is intrinsically intertwined
with the potential for economic growth in Africa, a truth that
must be set at the heart of the UK government's response.
TAKING RESPONSIBILITY
FOR CLIMATE
CHANGE
8. Poor people should not be expected to be accountable
for the influence humans have brought to bear on the climate through
their profligate use of fossil fuels. The lion's share of the
c380 parts per million (ppm) of carbon dioxide—the most
prolific of greenhouse gases—that currently reside in the
earth's atmosphere have been emitted in industrialised countries.
9. In spite of the economic growth of China and
India (the benefits of which to poor people are questionable,
see Ghosh, Christian Aid 2005, among other literature) it is rich
countries that still emit more greenhouse gases. In Britain, for
instance, per capita carbon emissions are currently around
nine tonnes per year, compared with less than one tonne per year
in Sub Saharan Africa (International Energy Agency, 2002).
10. Since the earth's atmosphere is a globally-shared
resource, the onus in efforts to reduce emissions is on rich countries.
It is critical that global emissions peak by 2015 and decline
thereafter, but within this context of historical and current
massive inequity in the use of the atmosphere, while rich countries
reduce their emissions, poor countries must be allowed to expand
theirs. This "redistribution" of pollution rights is
enshrined in the Kyoto Protocol.
11. In this regard, the UK government's work
on climate change and poverty must begin at home. In the interests
of poor people in many of the countries in which DFID spends UK
taxpayers' money on development, the UK must champion the systematic
reduction of greenhouse gas emissions. This must be a cross-Whitehall
initiative involving, inter alia, the Treasury, DEFRA, Department
for Transport, the Office of the Deputy Prime Minister and DFID.
12. This is entirely in line with DFID's core
purpose and the UK government's stated aim of reducing poverty
and contributing towards sustainable development. Cutting emissions
in the UK will not only help save lives and improve livelihoods
in poor countries but it will also create greater atmospheric
capacity for their economic development.
RECOMMENDATIONS
13. The UK government, led by the Treasury, must
set an annual "carbon budget" to limit the greenhouse
gases Britain can produce each year. The limit of this budget
should then be reduced each year in line with or beyond the UK's
existing goal of cutting emissions 60% by 2050.
14. An independent audit commission should also
be established to monitor the reduction of emissions according
to the carbon budget.
CLIMATE-PROOFING
BRITAIN'S
INVESTMENTS
15. If DFID accepts the impact of climate change
on poor people and that climate change is itself not an act of
God but human influenced, then its spending of UK taxpayers money
ought to be climate proof—spent in a manner so as to safeguard
the climate and, wherever possible, reduce greenhouse gas emissions.
16. In 2004, the review of extractive industries
by the World Bank recommended a phasing out of World Bank funding
for coal, oil and gas projects by 2008. A significant number of
other studies (Sachs and Warner 1995, Ross 2001, Christian Aid
2003, Catholic Relief Services 2003) have identified a counter-intuitive
corrosive effect on human and economic development of natural
resource extraction, especially oil and gas. Recent attempts to
lift the oil curse by implementing flanking fiscal transparency
and accountability measures on projects such as the Chad Cameroon
Pipeline appear similarly doomed (Background Briefing for European
Executive Directors on The World Bank Group's Support for Natural
Resources in Africa, Bretton Woods Project et al, 2005).
17. With the added impact of the extraction of
these resources on the environment from which they're taken and,
through their use, on the climate, Christian Aid believes that
UK development assistance should no longer be spent—ostensibly
though multilateral institutions—on such projects.
18. UK development assistance should, however,
be spent on clean, sustainable development in poor countries,
both as a means of reducing emissions and the impact of climate
change on poor people and of enhancing livelihoods. Christian
Aid believes that, with foresight, there will be many opportunities
for poor communities that choose to develop by harnessing renewable
sources of energy. There is clearly an opportunity for support
for low-emissions small and medium-sized enterprises, which DFID
already recognises are critical in pro-poor growth.
19. Christian Aid feels there is also a major
opportunity for poor communities in off-grid renewable energy.
Rather than investing in big, infrastructural power projects,
now is the moment to leap a technology and go straight to community-scale
renewable energy. DFID, through its programmes and advocacy across
government, could play a major role in encouraging this leap,
which may also provide opportunities for the UK's renewables sector.
20. Meanwhile, British business invests heavily
in carbon emitting projects in poor countries, especially in the
extractive sectors. According to Henderson's Global Investors,
while the UK is responsible for 2% of global emissions, financing
from the UK accounts for up to 15%.
21. It is clear from this that the UK, as a financial
centre, is a significant player in funding climate change. The
UK government must, therefore, do everything within its power,
both nationally and internationally, to offer incentives that
discourage the flow of money towards highly polluting investments
and encourage rapid investment in renewable energy and projects
with a low emissions exposure.
22. The new Operating and Financial Review (OFR),
that recently earned a reprieve after being scrapped by the Treasury,
is a step towards more open reporting by companies of their social
and environmental risks. But, in view of the urgency required
over climate change and with increasing numbers of investors calling
for the clearer declaration of the carbon exposure of projects,
the UK government must look at a number of market-based measures
to make disclosure mandatory. Climate change has identifiable
costs; there is a business case for disclosure!
23. But disclosure must go beyond that encouraged
currently through the Extractive Industries Transparency Initiative,
on which DFID leads for the UK government. While of merit, the
EITI lacks teeth. In the face of the human rights and environmental
violations that so often surround such projects and bearing in
mind the climate changing impact of what is extracted, is the
EITI a response of appropriate proportion? Christian Aid believes
not.
RECOMMENDATIONS
24. DFID must conduct a thorough review of donor
support for coal, oil and gas projects (as well as support for
other natural resource sectors, such as logging, which might increase
people's insecurity), including funding of social and environmental
mitigation projects. It must draw up a timetable for its withdrawal
from any support for projects, advocate that the World Bank does
the same and publish its findings on the effectiveness of its
funding of mitigation versus the harm done by exploitation.
25. Alongside this, DFID should investigate the
efficacy of renewable energy with major new research examining
the power needs of poor communities through the lens of renewable
sources of energy. It should also back the development of community-based
renewable energy and livelihood initiatives, starting with pilot
projects in Asia, Africa and Latin America to study their efficacy.
26. The UK government must convene a panel of
experts to recommend measures to make mandatory the disclosure
of the carbon emissions of projects put forward for UK stock exchange
listing. This might include more binding measures within the OFR
or new listings rules or both.
27. DFID and the UK government in general must
be aggressive supporters of clear, mandatory social and environmental
standards for investment, including open disclosure of carbon
emissions. The EITI should be replaced by mandatory International
Financial Reporting Standards.
28. The UK's Export Credit Guarantee Department
must require disclosure of carbon emissions, must phase out its
support for projects—coal, oil, gas, power, infrastructure—with
high carbon exposure and increase support for those with zero
emissions or those that attract carbon credits. There is an opportunity
for the ECGD and the UK government to lead Britain into a new
era of sustainable exports and ensure poor countries have access
to appropriate technology at the same time.
CLIMATE CHANGE,
POOR PEOPLE
AND GROWTH
29. There is a common assumption of an explicit
causal link between growth and poverty eradication. In reality,
this is questionable. Wealth must be more evenly distributed for
poverty to be eradicated, and so must use of the atmosphere, which
will allow more scope for poor countries to develop (and to pollute)
in the short term.
30. DFID has already identified that climate
change is likely to have particularly dire consequences for poor
people, not just in terms of the increased frequency and severity
of climate-related disasters, but in harming their livelihoods
(DFID climate change key paper 02, undated, UNDP 1998, World Bank
2002). In general, it is estimated that African GDP could decline
by to 10% in the next 10 years due to climate change (The Economist).
31. So-called "pro-poor growth"—economic
development that occurs in sectors of importance to poor people,
particularly agriculture—is especially at risk from a changing
climate (FAO 2001, Up in Smoke, WGCCD, 2004). It is Christian
Aid's belief that any growth that is pro-poor must therefore be
climate change proofed too—in effect, growth through clean
technologies is more pro-poor and therefore must be the focus
of the UK government's advocacy and policy on development.
32. Poor people will not all desire or be able
to live the life of smallholder agriculture. Moreover, climate
change will drive people off their land, as is already the case
in particularly sensitive regions. New jobs will be needed and,
for this new pattern of economic activity to be sustainable, poor
countries need a rapid but sustainable transfer of existing renewable
energy technologies. Just as many poor countries have leapt over
landline telecommunications technology and developed mobile networks
only, so they must leapfrog dirty, centralised power generation
and go straight to decentralised, renewable power to energise
their development.
33. To find this Holy Grail, poor countries will
need to protect fragile markets in which poor people are most
active—especially as producers in these markets are further
disadvantaged by climate change—and, conversely, to open
other markets in order to import clean technology cheaply. For
this, they will need a great deal more space in trade policy making—freedom
from prescriptive trade agreements and conditions attached to
agreements with the IMF.
34. In the meantime, DFID programmes must also
be targeted at supporting poor people to adapt to the impact of
an already changing climate, including through adapting their
businesses to withstand climate change. Disaster risk reduction
should also become an integral part of all social and economic
policies advocated for and supported by DFID.
RECOMMENDATIONS
35. In championing pro-poor growth, the UK government
must recognise that climate change is already undermining poor
people's livelihoods and must take this into account in its policy-making.
This means that UK aid cannot come with economic policy conditions
attached, as has already been promised. The International Development
Act should be amended accordingly.
36. Pro-poor growth is contingent on climate
change being reversed and, in the meantime, on DFID and others
supporting poor people to adapt their livelihoods as well as their
lives to cope with increasingly hostile weather.
March 2006
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