Examination of Witnesses (Questions 100-119)
DR CAMILLA
TOULMIN AND
MR BILL
VORLEY
30 MARCH 2006
Q100 Chairman: Do you
see any attempts to overcome that? What could be done to make
MDG7 more prominent in their thinking?
Dr Toulmin: I think probably it
requires two things. One is really the highest-level political
support for environment and sustainable development, which I think
we hear from Hilary Benn. He is extremely good at emphasising
the importance a sustainable environment, the huge importance
of climate change, in terms of achieving long-lasting development,
and also as an equity issue within the world as a whole. I think
we have got that support at the highest level. I am not sure that
you have got the same level of support within the structure as
a whole, and I think that is evidenced by the abolition of the
position of the Chief Environmental Adviser. I think somehow DFID
needs to be encouraged to take environment right back into its
absolutely central functions as an organisation and to make sure
that this strong focus on poverty in the MDGs has got a strong
parallel track on sustainable development and environmental issues.
You need that kind of political championing within the organisation,
and allied with that I think you need a bit of creativity and
imagination in terms of how best you deliver on those sorts of
environmental and agricultural commitments. That then needs a
bit of rethinking about ways of funding, and particularly finding
alternative routes of funding that are not necessarily through
direct budgetary support process.
Q101 Chairman: You have
published a report recently called The Millennium Development
Goals and Conservation. One of the areas it is focusing on
is a report on the ecosystems services, a new phrase I am not
sure I am entirely happy with, but there we are. Is this really
the way forward, for developed countries to pay for environmental
goods and services, such as carbon sequestration, in developing
countries, or do you think it is simply a last-ditch attempt to
get the environment included in the MDGs and the development agenda
as a whole?
Dr Toulmin: The work that we have
been doing on ecosystems services shows that there are only limited
circumstances in which that kind of approach, of markets for environmental
services, there only certain circumstances in which those markets
do generate both good environmental benefits and good poverty
equity benefits. That is to say, this idea that markets can produce
a whole set of environmental benefits is a much too simple ambition.
Very often what happens is that you can get lots of environmental
benefits but it is at the expense of a lot of equity and poverty-related
goals that you might seek to achieve.
Q102 Chairman: Is that
because the market is too powerful within whatever fora we are
talking about here, or actually should we have market mechanisms
nevertheless but with a much stronger framework?
Dr Toulmin: If you take something
like the Clean Development Mechanism, which, as you know very
well, is offering markets for carbon sequestration services, in
cases like the CDM what you find is that there is such a high
transaction cost in getting into the market in the first place
that I think there is only one CDM project in the whole of sub-Saharan
Africa. There are economies of scale which mean that a lot of
smaller, poorer countries cannot get access to that market. In
other cases what you find, like for markets for watershed services,
is that, unless you have got strong institutions and governance
systems in place, the poor communities which you might have thought
might benefit from these payments for watershed services in fact
do not gain those payments because other, more powerful actors
within the system are able to appropriate them. Those benefits
from markets do need very strong institutions at local level if
they are to have this beneficial equity impact.
Q103 Chairman: Do you
think it would be simpler and more productive perhaps simply to
impose environmental conditions on governments which receive our
budgetary support?
Dr Toulmin: Possibly, yes. My
feeling is that it is useful to explore various different channels,
in terms of achieving objectives. In some cases regulation may
work best, in other cases markets may work best, in other cases
some sort of mix of the two. I do not think you can have a hard
and fast policy or instrument that is going to work well in all
circumstances.
Q104 Chairman: Has anybody
done a great deal of research on that? We are told increasingly
and I have read one or two recent DFID documents saying how wonderful
the markets are in delivering all sorts of goodies, but a great
many people, of course, take the view that direct budgetary support
with environmental conditions would be far quicker. Is there a
body of evidence of which you are aware, is there some of it which
DFID actually looks at before it makes the claims for market-based
mechanisms?
Dr Toulmin: We did this study
a couple of years ago of over 200 examples of ecosystem markets,
called Silver bullet or fools' gold?, which does a review
of how these markets for ecosystems work, in a whole variety of
different contexts. As I say, in summary, that came up with a
view that there are only limited circumstances in which you get
a win both for the environment and for poverty and equity objectives,
therefore that this ambition to use the market in all circumstances
was too strong, that one needed to moderate it with other mechanisms,
particularly strengthening institutions, governance and maybe
a more regulatory approach.
Q105 Chairman: One of
the issues that you have highlighted is that very often environmental
goods and services and their benefits to the most poor are not
properly accounted for and therefore are difficult to include
in such things as Poverty Reduction Strategies. How do you suggest
this could be addressed?
Dr Toulmin: I think this goes
back to the question about how best to engage with and support
a whole set of actors outside central government in the many countries
in which DFID and other donors operate. Many of the key environmental
issues are handled on a day-to-day basis by local people, local
institutions, local government, local organisations, and somehow
DFID and other donors need to find a way of being able to listen,
to learn from and to support action at that sort of level. There
are examples of where DFID has joined with other donors to set
up funding mechanisms and support mechanisms which do provide
for that kind of lower-level set of activities. One much-quoted
example is the infrastructure fund in Mumbai, in India, which
is a joint DFID-Swedish SIDA fund. That sort of innovation in
aid delivery, in terms of financial and other technical support,
is something which I think could be followed more often. That
would provide a means by which the donors could be supporting
a set of institutions that government may not have necessarily
as a priority but which is a very important part of the broader
civil society and local government infrastructure.
Q106 Chairman: With DFID's
emphasis on macroeconomic growth as the main way of getting people
out of poverty, how do you think their efforts, in terms of delivering
the MDGs at the very local level, are being implemented; do you
think they are doing a reasonably good job there or should they
perhaps refocus a bit more?
Dr Toulmin: Our feeling is that
more refocusing is absolutely necessary. The third of our booklets,
of which you referred to the second, was the focus of our conference
at the end of last year, called `How to Make Poverty History:
the Central Role of Local Organisations'. What they are saying
there, which pulls together a lot of evidence from partners around
the world, is that we must find a way of strengthening and providing
not just finance but a variety of other forms of support too.
Local government, local associations, a whole variety of local
organisations, actually are the ones which, day to day, will help
deliver the MDGs, in practice, and somehow we have got to find
our way out of this trap created by a very large amount of money
going through a very limited funnel into central government. Not
unnaturally, central governments are not that keen necessarily
on dispersing a lot of money down to local organisations, particularly
when they are not under their political control. There are examples
as I suggested in the case of Mumbai, there are also examples
from west Africa and southern Africa where a joint donor fund
is made available for these more meso- and local-level initiatives.
I would suggest it would be good for DFID to innovate further
in that field, if indeed they do want to get down to this more
micro level, where the changes in the delivery of the MDGs, most
of those, actually will either happen or not happen.
Q107 Mr Caton: As has
been mentioned, you receive funding from various countries, a
number of different countries. Which are best at integrating environment
and development?
Dr Toulmin: I think none of them
is perfect and none of them finds it easy. In fact, we have been
discussing with colleagues in Denmark and in Ireland and in DFID
how to help make that integration work better. I suppose one might
say that if they realise that there is a problem probably they
are one step ahead of those who do not realise they have got a
problem.
Q108 Mr Caton: Are there
any examples of particular countries dealing with a particular
issue or a particular project in a way that we can all learn from,
in terms of bringing environment and development together?
Dr Toulmin: I think probably you
could find those examples through the OECD DAC ENVIRONET, which
tries to build a sharing of experience and good practice amongst
the different donor agencies, or through the Poverty Environment
Partnership, which again draws not only on donor agencies but
a range of UN and multilateral organisations. I cannot pull an
example out of my head just immediately, I am afraid.
Q109 Mr Caton: Fine; we
will look at that. Let us think of DFID. What are its strengths
and weaknesses in this area?
Dr Toulmin: I think its strengths
have been this very necessary integration of environment into
its sustainable livelihoods approach, which is something which
evolved over the last, I suppose, five, eight years, from a situation
maybe in the mid 1990s where you had a very strong natural resource
focus. What they did then was to say, "A focus on natural
resources is fine, but we need to see how those natural resources
are drawn into an understanding of how people make an income and
their livelihood strategy more broadly." I think that was
a very strong, positive aspect of DFID's development and focus.
Another has been this championing of the Poverty Environment Partnership,
which has been a very valuable international platform for different
agencies coming together to share experience on some of the difficulties
of getting environment flagged up within their own organisations.
That held a really good event at the Millennium Summit last September,
really to bring in a number of people to try to flag up where
environment was central to achievement of the MDGs, so it was
good, as a high-level political platform. I think, equally, the
sort of championing that we have had of climate change has been
a very important element of the development agenda; it has been
something that Hilary Benn has been very good at focusing on in
the last few months. In terms of weaknesses, I think there is
this fundamental mismatch between the sorts of person resources
and aid mechanisms that you need to do good environmental work
and the current structure and direction in which DFID is moving.
There is a sort of fundamental mismatch there. What you tend to
find is that there are some country programmes where you have
got really good environmental activity going on, but largely that
is because you have got somebody interesting and good in position
in that particular country, rather than as a result of a more
systematic policy, so it is patchy.
Q110 Mr Caton: For what
sorts of projects does DFID fund IIED?
Dr Toulmin: I can give you a couple
of examples. One has been looking at watersheds around the world
and looking at whether or not markets for watershed services make
sense in these different contexts. That has been going on in six
different countries, from Asia, Africa, Latin America, and coming
up, as I say, with this much more muted enthusiasm for market
mechanisms for achieving both environment and social goals. Another
example is work which was concluded recently on looking at different
ways of securing property rights for poor people in Ethiopia,
Ghana and Mozambique, coming up again with a set of recommendations
for how to design systems of land registration that are most likely
to benefit poor people, so a very strong policy focus.
Mr Vorley: There are two other,
quite large projects, which DFID is supporting with networks of
partners, around market governance and the position of smaller-scale
producers and agriculture and food, as large supermarkets and
food processors move in to middle- and low-income countries and
how you can keep some sort of market access for smaller-scale
producers in that. That is quite a large project. Another one
is a partnership between IIED, the Natural Resources Institute
and DFID to try to make sure that the standards which supermarkets
impose here in the UK, including environmental standards, do not
marginalise the very producers who are supposed to benefit from
the `trade not aid' agenda and this mantra of making markets work
for the poor. This is leading DFID into very interesting territory,
of sitting down with Tesco, Asda, Marks & Spencer, here in
the UK, to see if the developmental benefit of procurement from
places like Africa can be maximised without losing the environmental
benefits of having a private sector standard in place. That is
a joint venture rather than just giving IIED money and saying
"Get on with it."
Q111 Mr Caton: You are
also funded by Defra, I understand. What sorts of things do you
do for them; is it along the same lines, or is it completely different?
Mr Vorley: It has been along the
same lines. That programme of work has now finished and I am not
sure if we do get any support from Defra at the moment.
Q112 Mr Caton: I am referring
to your 2005 Annual Report, so it may be that it is there no longer?
Mr Vorley: Yes, that is right.
Again, it was a sort of multi-stakeholder process around benchmarking
the private sector players in the food industry to try to raise
standards rather than drive a race to the bottom, whereby you
would scour the world for the cheapest food with the lowest environmental
and social standards associated with that.
Dr Toulmin: In relative terms,
DFID is a far more important source of funding for us than Defra.
DFID has been one of our principal sources.
Q113 Mr Caton: How much
funding do you get from DFID?
Dr Toulmin: Over the last five
years, I suppose we have got between 20 and 35% of our funding
from DFID and that will go up next year because we have got a
partnership agreement with DFID now, one of these PPAs.
Q114 Mr Caton: Steve Bass,
who is one of your senior fellows, was appointed as Chief Environmental
Adviser by DFID but the post was lost after six months. Perhaps
you have a unique insight into what happened. Why do you think
DFID thought it so important to appoint an adviser and then, within
six months, wanted to phase out the post?
Dr Toulmin: We were completely
perplexed by that. When he was appointed back in June 2003, Steve
was completely taken aback, some months later, to find that position
was being restructured out of existence. I can only imagine that
it was for some kind of general restructuring process which all
organisations, for some reason or another, choose to go through.
We can all interpret it in various ways. I choose to interpret
it as a desire to demote environment within the context of DFID's
overall policy and I think that is the interpretation most people
gave to that particular demotion. They did not demote the Chief
Economic Adviser and I interpret that to mean that economics matters
a lot more than environment, but that is my personal interpretation.
Of course, Steve came from IIED, and I suppose, to a large extent,
with him now back at IIED, we are the beneficiaries of that whole
process, since he had a bit of time in DFID which has given him
huge insights into how the organisation works. He is back in IIED
now, working 30% of his time for DFID but the rest of the time
on issues related to environment, MDGs and broader development
activity.
Q115 Mr Caton: That is
a small benefit compared with a major loss, it seems to me, in
what you are saying?
Dr Toulmin: Yes, that is right.
It is a private benefit for IIED but a much larger collective
loss.
Q116 Mr Caton: Going back
to funding, why does DFID fund you and other organisations; is
it because they have not got the expertise to do the work that
you do, or is it something that would never be done in-house anyway?
Dr Toulmin: I think, in general,
if you look back, since Thatcherite times there has been a shift
of work from within central ministries into research institutes
and NGOs, which might have been done, 20 or 30 years ago, by staff
in those central ministries. I think, in part, there has been
certainly a shift of funding which in previous times might have
been done as a core government function. I think it is also because
the kind of work that we do I would hope added value, to understanding
by DFID staff, both at headquarters and in field offices, contributes
to their understanding of some of the policy options that they
face and how they can carry forward particular areas of work more
effectively. For example, we have been doing quite a lot of work
on questions of land administration, particularly in the context
of the Ghana programme, where DFID has got a significant investment
in the work of the Ministry of Lands and Forests, so there is
a very direct feeding-in, in that case, to a specific body of
work that DFID wants to take forward.
Mr Vorley: The trick being, of
course, if you do support policy analysis and research which then
is fed back into an organisation which has a high staff turnover,
or does not have a large capacity to absorb that, at the central
or the country level, there are problems of internalising that
,and one is inclined to go through repeated lesson-learning, sometimes,
would you say?
Dr Toulmin: Indeed, and quite
often, when you appear with a short report, people say, "Oh,
well, I don't have any time to read that." Again, I think
it is this constraint on a really very limited number of people
having to do a huge amount of work, and that means there is relatively
little space for the reflection and thinking and questioning of
alternative routes, that really there is not very much time for
that.
Mr Vorley: I think this partnership
model around the UK retail sector could be an interesting model
to look at, where rather than devolving or contracting research
it is done as a joint venture between DFID and partners; that
could be quite an interesting way forward.
Q117 Chairman: If I can
follow up with a couple more questions on the staffing issue,
we have been told a number of times of this famous number of 18
environment staff out of 2,927, or something like that. I am sure
that if we ask the Minister, when he comes to an evidence session,
the question "How do you cope with environmental issues with
only 18 staff?" he is going to tell us that actually environmental
issues are integrated into everybody's work and that all 2,927
will always be thinking about environmental issues as part of
their overall work. If that were the answer, how would you rate
it?
Dr Toulmin: It is like all of
these mainstreaming issues, is it not? If you have a bit of that
background yourself then I think you do mainstream internally
in that way, but I think if you come from a different kind of
background, particularly if you come from a sort of mainstream
economics background, it is much harder to have that sort of innate
screening or understanding of environmental issues. When you look
at a particular issue or project, that is not necessarily the
set of questions that you are going to be asking yourself. I think
what most organisations find is that once you mainstream and get
rid of the environment experts, you get rid of gender experts,
you get rid of other, more specific experts, then actually you
lose the prod and the prompt which means that people keep those
issues front of mind. Again, if most of the emphasis is going
on transference of money to central budget support then these
more diverse, locally-based, specific environmental issues just
tend to get neglected.
Mr Vorley: Just a defence; something
like agriculture, which has a huge environmental and natural resource
ingredient into it, is back on the map, fairly and squarely, in
DFID, so I think it could be an overstatement to say we are down
to 18, because with agriculture back in, both in research and
policy, there is considerable environmental analysis and policy
rushing in behind that.
Q118 Chairman: The work
for which DFID funds you, how is that disseminated amongst DFID's
staff; do they get any feedback?
Dr Toulmin: It is disseminated
in a variety of different ways. It depends a bit on the nature
of the work, but, for instance, the work that I referred to on
watersheds, there is a lot of contact between the research groups
in each of those six countries and the DFID offices where that
work is going on. Similarly that is the case with the example
that I gave of looking at how you can secure land rights most
effectively. In fact, we chose those countries—Ethiopia,
Ghana and Mozambique—specifically because we knew there
was either a strong DFID interest or a strong governmental interest
within those countries into which the research results might feed.
It is a bit more patchy in terms maybe of headquarters feedback.
Again my impression is that people are incredibly hard-pushed
for time, so that, for instance, when we had this big conference
on land, in Africa, in November 2004, which brought together more
than 100 people from different parts of the continent, including
three ministers of land, we did not get anybody from DFID except
a part-time consultant. That struck me as rather surprising, given
the importance of the land issue in the African continent. We
did get people from the Commission for Africa, but I was surprised
not to get anybody from DFID itself. I was told, that day there
was just nobody available because of the pressure of a whole set
of other commitments. I think, on the supermarkets front, you
have been having much more of a—
Mr Vorley: In the headquarters,
yes, but it is the opposite way round; there, you would talk to
DFID offices in Kenya or Uganda and would be encountered by people
who are interested very much in theory and want to support the
work but spend all their time servicing the direct budgetary support
and do not have much time for the smaller, more diffuse but very
important work around smaller-scale producers and natural resources
and market access.
Q119 Ms Barlow: You have
highlighted a few DFID projects which you feel are environmentally
effective, particularly in India, China and Kenya. Could you explain
briefly what those are and why you think they are effective?
Dr Toulmin: The one in Kenya,
which in fact is run by an ex-IIED staff member, in fact we seem
to be providers of environmental advisers to DFID, is focused
very much around trying to strengthen rights over land and forests,
particularly. Given that Kenya currently is going through this
very interesting process of both constitutional reform but also
trying to get a land reform process underway, so that work has
been trying to support the consultation process within the country
around how you get the rights of different kinds of communities
properly reflected in whatever kind of legislative reform on land
and forests and other natural resources takes place. That is necessarily
a rather slow, consultative process and DFID has been very good,
I think, at persuading the Government that it is better to go
slower and to engage with a broader set of interests than to try
to rush legislation onto the statute book which does not necessarily
have such a strong buy-in from those different constituents.
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