Select Committee on Environmental Audit Minutes of Evidence


Memorandum submitted by International Institute for Environment and Development (IIED)

INTRODUCTION TO IIED

  IIED is an international policy research institute, working for sustainable and equitable global development. Set up in 1971, just before the first UN Earth Summit, IIED was a major contributor to the Brundtland Commission of 1987, the Rio Earth Summit of 1992, and WSSD in 2002 in Johannesburg. IIED works through a wide range of long-standing relationships with partners in the developing world—and notably with local research groups—thereby ensuring that our policy advice and advocacy at national and international levels is well informed by local realities. IIED's work broadly falls into four areas: natural resources, urban, markets and governance—all of which emphasise the links between environment and poverty reduction.

DFID has, over the last decade, offered international leadership in intellectual and policy terms for integrating environment and development. Particularly well appreciated DFID contributions include:

    —    Promoting the sustainable livelihoods framework, which has improved understanding of the many assets (including environmental assets) on which poverty reduction depends.

    —    Key documents and seminars on the links between poverty and the environment offered at the 2002 WSSD, which have subsequently influenced most other donors.

    —    Supporting, and twice chairing, the OECD ENVIRONET as a way to improve environmental harmonisation among donors on eg strategic environmental assessment.

    —    Catalysing the more informal Poverty Environment Partnership as a means to share learning between donors and identify best practice on eg environmental fiscal reform.

    —    Designing and implementing a comprehensive "environmental screening" procedure for DFID activities, which addresses environmental potentials as well as negative impacts—and which other donors have copied (eg Irish and Belgian aid).

    —    Promoting a post-Kyoto regime that ensures a fair deal for developing countries, addresses both mitigation and adaptation to climate change; offering clear information; and supporting engagement by their stakeholders in international negotiations.

    —    Announcing research strategies in climate change, environment/natural resources and sustainable agriculture that will include significant involvement of Southern groups; and a science and innovation strategy that will also help to build capacity.

      However, DFID's leadership has been less evident in responding to the environmental aspects of poverty in specific low-income countries (LICs). There are a few effective DFID environmental projects, eg in Kenya, India and China. But these are in a minority amongst other kinds of activity. Moreover, there has been no comprehensive review of DFID environmental activity—either as part of its recent environment policy review or as a recommendation from it. Without such facts, IIED can only observe that:

    —    There has been no coherent, deliberate approach to ensuring good environmental information, analysis, prioritisation and planning in country-driven approaches.

    —    If environment does not "come up" in discussions on country plans, it is not pursued further—even if it might have been identified as a priority by local people in the Participatory Poverty Assessments usually performed for country-based planning. (This point is well documented by DFID studies).

    —    Existence of environmental activities tend to correlate with DFID environmental adviser presence in-country or interest of the country office head.

    The Recent Publication of "DFID's approach to the environment" (2006) is extremely welcome in view of the imbalance between DFID's intellectual/policy leadership and practical support to LICs. This policy paper commits to greater attention to three key needs. IIED supports these three levels as a useful framework, but emphasises that more needs to be done to make them operational and to engage the geographical and multilateral divisions of DFID. Observations of gaps and recommendations follow for each of these three areas:


    1.   Addressing the underlying institutional reasons for environmental problems in LICs

      IIED welcomes this emphasis because it offers potential synergies with the cross-DFID priority of improving LIC governance. However, DFID staff need more guidance to understand how the underlying (institutional) causes of both poverty and environmental degradation are similar, and how to design DFID governance programmes to address both. Much more is needed if the institutional base for managing the environment in every LIC is to be adequate:

    —    supporting civil society to articulate environmental concerns, to claim rights and to actively manage the environment;

    —    building basic environment information capabilities that reach to the heart of LICs' own poverty monitoring and development planning processes; and

    —    strengthening the capacity of environmental authorities to make their case to treasuries, and then to deliver effective environmental management.


    2.  A commitment to supporting environmental management where this can be shown to contribute directly to poverty reduction

      IIED welcomes this commitment because it is reveals an understanding that environmental management is a foundation for lasting development. It is neither appropriate nor efficient for DFID to address all the environmental issues facing LICs. Rather, DFID should concentrate on the major environmental deprivations and hazards suffered by the poor, and/or the best environmental potentials for improving livelihoods and economic growth.

    Whilst DFID has contributed usefully to a number of international processes that identify the generic case to invest in the environment for poverty reduction (eg the multi-donor Poverty Environment Partnership), the challenge now is making full and specific investment cases at the country level. However, neither the PRS planning process, nor DFID's own country assistance strategies include adequate diagnostics or consultations which would enable specific environmental priorities to be identified. This will also require particular attention to investigating drivers for and against the "resource curse" at macro level, and "poverty traps"' at micro level.

    Finally, to give confidence to DFID country heads to invest more in the environment, it would be helpful to draw together the lessons from DFID's varied environmental projects—which have worked; which have not; what the costs and benefits have been; and what has contributed to success or failure?


    3.   Managing environmental risks associated with development assistance

       IIED welcomes acknowledgement of the environmental risks associated with development assistance. However, DFID's Approach to the environment gives no details of how risk management is to be achieved. The current "environmental screening note" procedure is fine on paper, but is separate from other procedures, is very often applied too late in the day with inadequate technical consideration of both environmental threats and (especially) opportunities. It has tended to be applied to projects rather than to broader programmes or policies. Thus it has become little more than one bureaucratic step, and one which has been "pushed" by DFID environment advisers with little other "power base"—serving to reinforce "negative" impressions of the environment, ie as a block to development plans, rather than an asset for development. A more integrated approach to the environment is needed throughout the activity cycle.

    More should be done to consult with local environmental expertise and stakeholders. Further environmental risks arise when DFID neither listens to, nor responds to local groups that both suffer from and understand environmental problems—thereby risking the reversibility of poverty reduction programmes. Although in-country procedures often exist to integrate local people's perspectives into "country-driven" planning—such as Participatory Poverty Assessments—DFID's promotion of, support to and use of these procedures should be strengthened.In addition, DFID's management board does not, as far as we can ascertain, maintain an environmental risk profile or horizon-scanning exercise to inform long-term development (although recent inclusion of environmental scenarios in horizon-scanning processes for the White Paper is a very welcome innovation).

      Several constraints limit the potential of DFID's Environment Approach—many of them deriving from the current "development model" pursued by DFID:

    DFID's Environment Approach is unlikely to be achieve more than any "bolt-on" exercise unless key DFID policy and structural issues are addressed:

    —    A larger DFID budget and limited range of aid delivery instruments. The fact that DFID's budget is growing rapidly tends to favour big, simple, "efficient" development processes and relationships with central authorities in LICs. Budget support is the epitome of this trend. Environmental assets, environmental deprivations, environmental governance and environmental management play no central part in such processes or the development models they aim to support. Indeed, at national level the specificity, complexity, uncertainty and diffuse responsibilities for environment are very difficult to reconcile with such models. Local stakeholders (key for integrating environment into development) and research groups (key for handling environmental uncertainties) tend to have been marginalized by budget support approaches. DFID's extra funds need to be accompanied by extra responsibility to tackle the wider impacts of bigger expenditure. As a minimum, more needs to be done to lay out the "theory of change" that underlies budget support, to assess its sensitivity to environmental issues, and thus to incorporate environment in budget support planning and monitoring.

    —    A static or reduced overall DFID staff complement, and disproportionate reduction in environmental and natural resources skills. The reduced staff exacerbates the problems inherent in "big, simple models" and creates internal incentives for "efficiency" that are greater than those for equity or diversity. IIED is pleased that the HQ complement of environment advisers has been maintained (although some policy teams eg the Urban Rural Change Team have been disbanded before their conclusions have been fully internalised). In contrast, there have been significant and apparently ill-planned reductions in environmental advice in geographical offices. This may be due to a lack of oversight of the cumulative effects of all country office heads facing few incentives to employ anybody but economists, governance advisers and administrators. This would be less of a problem if DFID environmental advice were being replaced by eg agreements with other donors in-country to take responsibility for (cross-donor) environmental advice, or if DFID country offices were better linked with in-country sources of environmental expertise such as local universities and NGOs. There are signs that DFID is now below critical mass in environmental advice—its advisers are amongst the best, and efforts should be made to retain them and place them in strategic positions. This should be complemented (but not substituted for) by reinstatement of the in-house environment training modules for non-environment staff.

      Other major DFID-wide directions could be more promising for the environment—if there were more active promotion and implementation of its Environment approach:

    —    Donor harmonisation: On the one hand, efforts to implement the OECD Paris agenda on aid effectiveness are promising if they result in a more coherent and prominent cross-donor approach to (a) taking responsibility for environmental integration; (b) coordinating environmental activities in-country; and (c) the environmental reporting requirements of country authorities. For example, the donor group on environment in Tanzania, coordinated by Denmark, is working fairly well. On the other hand, efforts at donor harmonisation can take up so much time and political capital that attention shifts even further away from the environmental stakeholders who are already marginalized so much in country-driven approaches.

    —    More development assistance delivered through multilateral institutions: It can be effective to deliver more aid through multilaterals such as the World Bank and the EC if, at the same time, DFID strengthens its commitment as a shareholder to assure the highest quality in multilaterals' environmental policy and procedures, and scrutinises their implementation. Yet the BTC oil pipeline experience, amongst others, suggests that DFID is happy merely to defer to the development banks, rather than to adopt a continuous improvement approach. Neither does DFID's new SD Action Plan attempt to address the new European Consensus on sustainable development. With the closing of 11 years and 10 programmes of DFID's Renewable Natural Resources Research Strategy, there is now considerable UK expertise that could be deployed by DFID to improve environmental integration in the activities of the multilaterals.

    —    Programme Partnership Agreements: PPAs are analogous to budget support, offering DFID a way to provide long-term, predictable supplies of flexible assistance to trusted agencies. From July 2006, IIED will join WWF so that there will be two organisations concerned with environment that have Programme Partnership Agreements with DFID. For these "environment" PPAs to work well, "carrots and sticks" need to be established: for DFID country/regional office heads to engage with these PPAs; for the PPAs to work coherently together (and with the "development"' PPAs); for WWF's PPA to encourage local civil society to articulate environmental issues; and for IIED's PPA to offer better information and analysis on poverty-environment links at national level.

    —    Joint working with Defra and the UK Sustainable Development Strategy (SDS): There has been recent progress in balancing DFID's (fairly clear) international development agenda with Defra's international environmental agenda (which has not always been very clear in relation to local and national environmental issues). The UK SDS appears to have offered a good framework for a mutual exploration and harmonisation of roles between DFID, Defra and the FCO. However, following the flurry of activity in preparing the SDS, this has not really been pursued very actively beyond DFID's production of an SD Action Plan; it is not clear how the latter commits DFID to anything that it would otherwise not have done.

    —    Focus on climate change: DFID's climate change initiatives are well appreciated (see p1). In addition, DFID has been bold in highlighting the direct links between consumption patterns in the North and climate-induced vulnerability in the South. There is a danger that DFID's focus on climate change becomes a substitute for balanced attention to the range of environmental deprivations and hazards facing poor people—"ticking the environment box" in one step. Instead, The links need to be clarified between climate variability/change and soil, water, biodiversity and environmental health, etc—so that climate change becomes a useful "entry point" for environmental action. DFID's upcoming climate change research programme offers potential here.

    —    Focus on agriculture: Two recent DFID documents, Strategy for Research on Sustainable Agriculture 2006—16 and Policy Strategy "Productivity growth for poverty reduction: our approach to agriculture", have usefully raised the profile of agriculture and rural development. But there are inconsistencies. The research strategy promotes a wider definition of "agriculture", including wildlife management, forestry, and fisheries. This is welcome, as it recognises farmers' diverse livelihoods and accommodates the possibility of a future where such activities function better with each other and with environmental processes. Yet the agricultural policy adopts a narrow definition around farming—and a commercial focus aimed principally at national economic growth. Whilst the policy reveals valuable appreciation of the roles of value chains and market access, rather than merely supply-side activities, poverty is treated as purely income-based and the "safety net" functions of agriculture are not well addressed. The problems faced by poor people in accessing environmental assets are not addressed as a priority; neither are the impacts of agribusiness gaining preferential access to such assets.

    In both the policy and research strategy, a narrow emphasis on farming technology is inadequate and inconsistent with the importance of demand-side constraints and with the other natural resource activities on which farmers depend. There is little emphasis on technology for soil and water management, on other means to sustain the environmental asset base of agriculture, and on approaches to minimise the energy intensity of farming technology. Finally, there is inadequate commitment to more inclusive science and technology, including building on traditional knowledge which has proven so effective at working with natural processes—rather than against them. Here, DFID's support to the current International Assessment of Agricultural Science and Technology for Development is to be welcomed, as it will attempt to bring together `scientific' and traditional knowledge from almost a hundred countries.

    IN CONCLUSION

    DFID needs to improve efforts towards MDG7, because this is one of the most "off-track" MDGs

      IIED welcomes this inquiry by the Environmental Audit Sub-Committee and hopes that it will offer timely information and compelling ideas that will influence the current International Development White Paper process. Ultimately, development is not merely a function of improved supply of finance to central governments. Development is achieved through the accumulation and management of a portfolio of assets—including environmental assets—in ways which improve both their productivity and the equitable sharing of associated costs and benefits. The evidence from national MDG reporting is that MDG7 (`Achieve environmental sustainability') is highly off-track, and that progress towards many other MDGs is hindered by under- investment in environmental assets. DFID needs to benchmark—and then regularly review and report—on its investment in MDG7 according to the three categories in its Environment approach.

    March 2006





     
    previous page contents next page

    House of Commons home page Parliament home page House of Lords home page search page enquiries index

    © Parliamentary copyright 2006
    Prepared 16 August 2006