Government response
GOVERNMENT RESPONSE TO ENVIRONMENTAL AUDIT COMMITTEE
REPORT: "Trade, Development and Environment: The Role of
DFID" (Tenth Report of Session 2005-06)
We welcome the publication of the Environmental Audit
Committee's report "Trade, Development and Environment:
The Role of DFID". It rightly draws attention to the
urgency of the environment challenge faced by humanity.
We agree with the Committee that the international
community—including the UK government and the development
community—must do more to respond to the growing weight
of evidence that our environment is under threat. If not addressed,
much of the current and future progress in lifting people out
of poverty—the mission of the Department for International
Development—could be reversed. Tackling this means working
for a collective response at a global level, in close collaboration
with our multilateral and developing country partners. We fully
recognise the need for action now.
However, we have three main concerns about the report.
First, the report does not reflect the 'ground reality'
of our relationship with developing country partners. We work
with an enormous range of countries who face diverse environmental
challenges. We agree that all countries need to pursue sustainable
development—but some of the generalised positions advocated
in the report (slower growth, for example) do not reflect differences
between countries. The report in many instances implies that DFID
is the arbiter of policy direction in our partner countries. We
are not. Countries identify their own development paths and donors
can assist. We do recognize that in many cases there is room for
more intensive dialogue with countries on environmental issues.
This is particularly the case in the BRICS countries (Brazil,
Russia, India, China and South Africa), which have an increasing
impact on global development with implications for the environment.
Second, we are disappointed that the Committee did
not recognise the emphasis placed on the environment in the new
White Paper. The White Paper makes clear the centrality of the
environment to our mission of poverty reduction. In his Preface,
the Secretary of State says that managing our world sustainably
is the most important challenge for a changing world.
We are already making progress on a number of fronts
to meet the White Paper's commitments. We are strengthening our
staff capacity on the environment. We are talking more to key
middle-income countries on climate change and the environment
and are fully involved in the DEFRA-led sustainable development
dialogues. We need a wide range of approaches to engage on environmental
issues. We are looking at how to ensure provision of global public
goods, including environmental ones such as climate and international
fisheries. For example, we have supported the International Task
Force for Global Public Goods including hosting its pre-launch
at the World Bank Annual Meetings. We will continue to scale
up our response to the environmental challenges the world faces.
Third, the report did not give sufficient credit
for the work that we are already doing - where we are at the forefront
of work to tackle global environmental challenges. This includes
our international work on climate change, illegal logging, and
illegal and unregulated fishing and strengthening the international
system. For example, we are a major contributor to the Global
Environmental Facility (GEF) and the UK pledged to increase our
share from 7 per cent to 11 per cent for GEF-4 (to £140m
over the next four years). We are working closely with the World
Bank and regional development banks to develop an Investment Framework
aimed at increasing public and private sector investment in energy
efficiency and low carbon technologies in developing countries.
The Government is promoting reform of the UN including a more
effective system of international environmental governance and
a strengthened United Nations Environment Programme (UNEP).
The White Paper sets out an ambitious agenda in tackling
environmental challenges. The Government is committed to its implementation.
Background
[Paragraph 13] It is vital that development
work and funding take account of the very close and crucial links
to the environment that exist for the most poor for whom issues
of access to natural resources and the impacts of environmental
degradation can very easily become a matter of life and death.
We agree. As outlined in our Policy Paper "DFID's
Approach to the Environment", published in February 2006,
poor countries and poor people depend directly on environmental
resources for their livelihoods to a much greater extent than
in richer countries. For example, in many developing countries,
80-90 per cent of jobs are based on natural resources (e.g. agriculture,
forestry, fisheries and tourism). Poor people often have inadequate
access to assets such as clean water, clean air, and fertile land
that are essential for livelihoods and health. Poor people usually
also bear the highest costs of environmental hazards and degradation.
Climate change is also likely to have a disproportionate impact
on the poor and most vulnerable as they have the least capacity
to adapt. The priority for development assistance is therefore
to reduce poverty through achievement of the MDGs, including MDG
7 on environmental sustainability.
[Paragraph 15] Any approach to poverty
reduction must integrate what are seen as key priorities by the
poor and set them as key priorities for development. The environment
is one of these.
We agree. As the Report notes, DFID-supported participatory
poverty assessments reveal that the environment is often central
to poor people's everyday lives. Country-led policies, planning
and programmes, such as poverty reduction strategies, should reflect
country-specific concerns, such as environmental challenges.
But the environment should be set alongside other key poverty
reduction challenges, reflecting local circumstances. We can't
dictate how developing country governments prioritise the challenges
they face, but we can help ensure that their development strategies
are based on a strong knowledge base including on the environment.
Donors can then provide support behind such country-led approaches.
Our response to other parts of the report, particularly paragraphs
40, 42 and 23, describes links between the country led approach
and the environment.
[Paragraph 15] DFID's duty to focus on
poverty reduction means that it is absolutely central to its role
to have a clear and coherent approach to the environment in its
work.
We agree that DFID should have a clear and coherent
approach to the environment. Our Environment Policy Paper together
with the new White Paper set out that approach. We discuss this
further in our responses to paragraphs 58, 61 and 62 under the
section "how does DFID see the environment".
[Paragraph 20] The message from the Millennium
Ecosystem Assessment is clear and stark. The environment that
we all depend upon, and which is particularly important to the
most poor and vulnerable in developing countries, is under threat
worldwide from overexploitation. This has serious implications
on the availability of resources for future generations and how
we attempt to tackle poverty now so as to minimise impacts and
ensure real, long-term gains. The Assessment is not a report that
can be ignored and DFID must take the lead role in Government
in ensuring that its findings are incorporated into how it, and
other departments such as DTI and DEFRA, approach development.
We agree that the Millennium Ecosystem Assessment
(MA) is an important report. We believe it provides a useful
and comprehensive overview of recent trends in ecosystem functions
and their relationship with human wellbeing. DFID provided funding
for the coordination of the forests working group of the Assessment.
While we agree that DFID should draw on these findings in our
work, the MA addressed a range of subjects some of which are the
responsibility of other departments, for example Defra who
lead on international biodiversity. DFID is using the findings
of the report both internally and in our discussions with other
government departments. We are also supporting workshops and
research on some of the key issues highlighted by the MA. For
example, DFID, the Natural Environment Research Council and the
Economic and Social Research Council have agreed joint support
for a research programme on sustainably managed ecosystems that
contribute to poverty reduction in developing countries. The programme
will have an initial duration of five years and will start later
in 2006.
[Paragraph 23] How Millennium Development
Goals are met will have a major impact on environmental sustainability
and there is not necessarily a clear framework to ensure that
all of the Goals are met coherently and simultaneously. This may
well prove to be counterproductive in the long term.
Frameworks to achieve sustainable poverty reduction
and the MDGs need to be developed and owned by countries themselves.
This includes coherent policies, planning and programmes, such
as poverty reduction strategies. They should make the links required
to achieve the MDGs, including links between environmental sustainability
and the other Goals. The Millennium Review Summit 2005 called
on countries to develop or implement national plans to help achieve
internationally agreed targets and goals, including the MDGs.
The UK supports this approach and the work that UN Agencies are
doing to develop guidance and support to countries on how best
to make the links to the MDG framework, including on integrating
environmental considerations. We recognise that weak progress
towards ensuring environmental sustainability will compromise
achievement of other MDGs and undermine wider investments in poverty
reduction.
[Paragraph 28] The clear links between
economic growth and environmental degradation, particularly with
regard to energy consumption and climate change, make it imperative
that every effort is made by DFID to pursue a less resource intensive
model for growth and ensure all negative environmental impacts
are minimised as countries are assisted in their development
We agree that efficient resource use is essential
for sustainable growth, as highlighted in the new White Paper.
Partner countries need to develop their own optimal growth
paths which take account of potential environmental constraints
and impacts.
We do not believe that growth necessarily happens
at the cost of environmental degradation. It is not growth 'per
se' that causes environmental degradation but bad policies and
practices, such as non-existent or ineffective regulation (particularly
environmental regulations) taxation and property rights.
We do recognise that growth is often associated with
severe environmental degradation, particularly in developing countries
that are heavily dependent on natural resources. Poor countries
need to grow and donors can help improve management of the resources
which contribute to growth, and to manage the environmental and
social impacts of growth. This includes considering how investment
decisions can be better informed by appropriate environmental
information, such as environmental costs and benefits.
Development Aid
[Paragraph 39] Poverty Reduction Strategy
Papers undoubtedly represent an improvement on how some aid has
been delivered in the past. They encourage good governance, help
to ensure predictability of aid, allow much more control by recipient
governments and as we heard are encouraging dialogue between stakeholders
within countries on a variety of issues, including the environment.
However, as DFID itself has recognised PRSPs have not, in the
main, handled environmental governance and management well.
We welcome the report's analysis about the complexities
of integrating environmental objectives into country-led Poverty
Reduction Strategy Papers (PRSPs) and other national development
strategies. This is as much about integrating environmental considerations
into country-led processes that lead to PRSPs as about the documents
themselves. World Bank assessments of PRSPs show mixed integration
of the environment, although there was a gradual improvement from
2002 to 2004. For example, DFID worked with other donors and a
Government of Bangladesh agriculture and environment working group
to help integrate environment into the PRSP. Assistance was provided
to facilitate consultation outside government, identify key poverty
and environment issues relevant in Bangladesh, and contribute
to the draft PRSP and implementation strategy.
[Paragraph 40] Some bodies, including
the Environment Agency, support a programme based approach to
environmental projects because of the particular difficulties
associated with incorporating these cross-cutting issues into
direct budgetary support of central governments. We agree wholeheartedly
with this.
Donors should use a range of aid instruments to support
country-led policy implementation. Recently published DFID guidance
for country offices highlights the need to use a mix of aid instruments
to maximise our impact. For example, to achieve environmental
objectives donors might also use technical assistance to build
capacity in the environment ministry and might provide financial
support for civil society to build a case for government to take
more action on environmental issues. We agree that programme-based
approaches are useful in this context. For example, DFID joint
funded the UNDP Poverty Environment Initiative (PEI). The PEI
has developed programmes in Kenya, Tanzania, Rwanda, Vietnam,
and Cambodia to help include environment and poverty links in
country planning processes.
However such programmes should not be used to work
around developing countries' priorities. As we outline in our
response to paragraph 15, we believe in a country-led approach
to development and the need to use our aid instruments to best
support the priorities articulated by countries themselves. DFID
is committed to working internationally to help poor countries
better ensure that relevant environmental priorities are included
in country-led policies, plans and programmes, including poverty
reduction strategies. Hence programme-based approaches should
share four features: leadership by the host country; a single
comprehensive programme and budget; a formalised process for donor
coordination; and harmonisation and efforts to increase the use
of local systems.
It is also important to maintain global public goods,
including environmental ones such as climate and international
fisheries. We will participate in the International Task Force
for Global Public Goods, launched in September 2006. For many
global public goods issues, the Global Environmental Facility
(GEF) is a vital source of financial support.
[Paragraph 42] There does not appear to
be any sense of urgency within DFID in dealing with the very serious
problem of integrating the environment into direct budgetary support.
The Institute of Development Studies produced research commissioned
by DFID that highlighted this very issue in January 2005 and still
little appears to have been done in this area.
We recognise that the outcomes that can be achieved
through budget support are dependent on the quality of PRSPs and
budget processes. World Bank assessments of PRSPs showed mixed
integration of the environment, although there was a gradual improvement
from 2002 to 2004. As outlined in our response to paragraph 40,
we believe that country programmes need to use a range of aid
instruments to support implementation of the PRSP.
DFID believes that budget support can provide huge
benefits for poverty reduction - for example, through providing
more predictable finance which will enable governments to better
manage fiscal liabilities. However, we only provide budget support
where we judge the benefits outweigh the risks associated with
using a partner government's own financial management system.
Budget support currently represents 20 per cent of DFID's bilateral
aid. The recent Joint Donor Evaluation of Budget Support warned
donors against seeking to overload the instrument - it is not
intended to achieve all development outcomes. In light of this,
we recognise that we need to carefully consider how cross-cutting
issues are addressed.
DFID has commissioned specific research into how
best to achieve environmental outcomes in the context of budget
support. This research will feed into
a current revision of our 2004 budget support policy, which we
are aiming to complete in 2007. The policy will consider how
budget support can be used to achieve sector outcomes, such as
environment. As with other cross cutting issues such as gender,
this is a complex issue that many donors are seeking ways to address.
We will also explore good practice on how to maximise progress
on sector issues through the budget support instrument, and include
this good practice in our aid instruments guidance.
[Paragraph 45] In the long term it is entirely
unacceptable that the UK should be providing aid to developing
countries regardless of the environmental consequences. DFID must
accept that it has a role to play in mitigating the environmental
impacts of the development it is endeavouring to achieve.
The UK does not provide aid to developing countries
regardless of the environmental consequences.
DFID's environmental screening procedures, which are being strengthened
(paragraphs 120,121 and 123), consider environmental consequences
of individual interventions. Our guidance for country assistance
plans (CAPs) states that environmental factors should be taken
into account when defining the main obstacles to reducing poverty,
including relevant regional or global issues, such as climate
change and shared natural resources. DFID has led the development
of OECD guidance on applying strategic environmental assessment
(SEA) to development cooperation, and its potential application
is included in guidance for DFID CAPs.
We do, however, accept that more is required
collectively by partner countries and donors to consider the broad
and strategic environmental implications of development. For example,
in Pakistan DFID and UNDP have agreed joint implementation of
work connected with the environmental consequences of programmes
that support devolution, gender and Pakistani elections. Countries
themselves can play a lead role in identifying how they can strategically
assess the environmental consequences of development. For example
in Ghana, DFID, the Netherlands Commission for Impact Assessment
and the EC helped to undertake an SEA of the PRSP document. It
is now the Ghanaian intention to use principles of SEA in review
and formulation of government policies.
DFID: Incorporating Environment into Development
Poverty Reduction and Sustainable Development
[Paragraph 51] We are concerned that the
Development Act's definition of sustainable development is at
odds with that set out in the Government's Sustainable Development
Strategy, making no explicit commitment to try to balance social
and economic needs with the environment. It is unclear why this
separate definition exists and what practical purpose it serves.
DFID should make explicit the rationale behind this ineffective
definition of sustainable development and why it is necessary.
The definition of sustainable development in the
International Development Act 2002[1]
was carefully considered during drafting of the Bill and its passage
through parliament. The definition reflects the key elements
of reducing poverty in the context of development which is environmentally
sustainable (maintaining the long term viability of ecosystems),
economically viable and socially desirable in that it fulfils
people's cultural and material needs.
The International Development Act definition is therefore
not at odds with the definition used in the UK Sustainable Development
Strategy, which also aims at balancing economic growth, social
development and environmental sustainability, but rather aims
to align the goals of the 1999 UK Sustainable Development Strategy
with the priority of poverty reduction as set out in the 1997
White Paper on International Development.
The 1999 UK Sustainable Development Strategy set
out the UK's goal of "enabling all people throughout the
world to satisfy their basic needs and enjoy a better quality
of life without compromising the quality of life of future generations".
In the context of international development the key goals were:
"eliminating global poverty and raising living standards
in developing countries, tackling global pressures on the environment
and resources, promoting a fair and open trade system which respects
the environment and strengthening the place of sustainable development in
international organisations."
DFID Policy
[Paragraph 52] DFID's website structure
is outdated and is in urgent need of being redesigned. It copes
very poorly with the large number of documents it contains, making
many of them virtually inaccessible. This is not only frustrating
for the user. It has significant implications for how transparent
DFID can be considered as a department.
We are puzzled that the Committee found it difficult
to access information. We have made great efforts to ensure that
the DFID website is user-friendly, and that it presents our various
activities and documents in a clear, organized fashion. The latest
report into Government Websites from Precedent[2]
states: 'Navigating the DFID site is simple and its provision
effective'.
We do, however, recognise the need for continuous
improvement and are currently carrying out a consultation with
stakeholders. We plan to redevelop the site and launch an improved
version in 2007. We would be grateful for further information
on why the Committee feel the site is deficient in order to investigate
further and feed the results into our redevelopment.
[Paragraph 56] It is difficult to find
clear evidence when looking at the broader range of publications
from DFID of the good work carried out by the Sustainable Development
policy unit. References to the environment are often cursory and
demonstrate either a lack of understanding or an unwillingness
to incorporate across the board what is - in theory at least -
DFID policy.
We try to focus our subject-specific policy papers
on the issue under consideration, which we believe gives greater
clarity of argument. Cross-cutting issues such as environment
and gender are covered in their own policy papers and appropriately
referenced. The fact they may not receive elaboration in policy
papers on other subjects should not be interpreted as down-playing.
The new White Paper makes clear the priority we are
giving to the environment and natural resource issues. But we
recognise the challenge of integrating environment as well as
other cross-cutting issues, such as gender, into DFID policy and
practice. Ongoing policy development, such as budget support,
infrastructure and water policies, will integrate environmental
dimensions.
How does DFID see the environment
[Paragraph 58] The environmental degradation
that goes hand in hand with economic growth and increased industrialisation
(unless properly regulated) can have devastating effects on the
environment and itself aggravate poverty, both in rural and urban
areas. DFID should have a strategic vision of the environment
that encompasses all of these
areas and not just a narrow—and counterproductive—vision
of the environment as one of many resources for poverty reduction.
We do not agree that DFID has a narrow and counterproductive
vision of the environment. DFID's poverty reduction mission,
as set out in the International Development Act, determines the
focus of our work. Most poor countries rely on environmental and
natural resources and they are critical to the livelihoods of
poor people. That is why sustainable use and management of natural
resources, focusing on opportunities for poverty reduction, is
central to our approach. Further, as set out in the White Paper,
the global challenge of climate change requires a global solution
and support to developing countries to adapt to the impact that
climate change will have on their environment, livelihoods and
development.
DFID's environmental policy recognises that environmental
degradation has adverse impacts on the poor, stating that "poor
people usually bear the highest cost of environmental hazards
and degradation". The policy recognises that making a direct
contribution to environmental management is one of the basic approaches
required. We encourage developing countries to tackle and prevent
environmental degradation and pollution that can result from poorly
managed economic development and industrialisation. For example,
DFID has been a major contributor to slum upgrading programmes
in India and is funding major upgrading initiatives across Andhra
Pradesh and in Kolkata in West Bengal.
[Paragraph 60] The environmental impact
of DFID's work - beneficial or otherwise—should be
measured against targets that allow a clear assessment of its
effectiveness at strategically integrating the environment into
how it functions. This should include the introduction of a new
PSA target that reflects the need to prioritise issues such as
climate change and biodiversity loss.
We agree that we need to be able to monitor progress
in strategically integrating the environment into our development
work. We have a number of opportunities to do this including
reviewing implementation of the Environmental Policy in Spring
2007, and a planned further review of environmental screening
in 2008/9 (see response to paragraph 123).
The future of DFID's PSA will be defined through
the Comprehensive Spending Review, due to be finalised in the
summer of 2007.
[Paragraph 61] DFID
needs to remove the artificial distinctions being made between
global and local environmental impacts, and ensure that assessments
are made of the interactions between both. Until these interactions
are accepted and made explicitly clear by DFID it will continue
to be held back from having a fully integrated approach to addressing
environmental problems
We do not accept that we make an artificial distinction
between global and local environmental impacts.
For example, as noted by the Committee, climate change
is the greatest of global environmental threats. This is why it
features strongly in the new White Paper. Action includes working
across HMG for international agreement on a long term stabilisation
goal; supporting international efforts to help developing countries
adapt to the local effects of climate change; and working directly
with developing countries. The EAC report uses DFID work on forests
as an example of how DFID has moved away from assistance with
global environmental benefits. Our work on forests is driven by
their importance for poverty reduction and development in developing
countries, consistent with DFID's poverty reduction mission.
But we see local and global environmental benefits as something
that need to be tackled at the same time. DFID considers illegal
logging as a governance issue because better forest governance
is the most important way to make improvements - both for local
development and also for environmental benefit.
[Paragraph 62] Sustainable development
should be about achieving poverty reduction which takes advantage
of the environment and its rich resources whilst at the same time
avoiding dangerous tipping points. And yet there is very little
in DFID's policy or the Secretary of State's speeches that makes
clear that the environment is finite and environmental limits
exist. On a planet where fish stocks are plummeting, water tables
are falling and the pace of climate change is accelerating at
an alarming rate, development and poverty reduction strategies,
such as DFID's, that fail fully to incorporate this concept will
at best only result in temporary successes.
We agree that the UK needs to work on many fronts
to minimise potential environmental tipping points. DFID is working
with other government departments on many issues including tackling
declining fish stocks, falling water tables and addressing the
impact of climate change on human development as well as ecosystem
health. For example, DFID actively
supports the International Code of Conduct for Responsible Fisheries
and has invested in the capacity of developing countries to implement
it. DFID is also, with Defra, taking a lead on international action
against illegal fishing. The White
Paper specifically commits the UK to doing more to support countries
in managing water resources in a sustainable and equitable way,
recognising that climate change will exacerbate existing
challenges of climatic variability.
We do not agree that DFID's policy or the Secretary
of State's speeches do not recognise environmental limitations.
The speeches made as part of the White Paper consultation identified
fast depleting natural resources as a threat to development.
In his Preface to the new White Paper the Secretary of State says
that managing our world sustainably and fairly is the most important
challenge of a changing world, highlighting that many of the natural
resources on which we rely are becoming seriously depleted. DFID's
Environmental Policy Paper identifies better environmental management
as one of three main approaches. The White Paper builds on this
and represents a renewed recognition that more is required to
tackle unsustainable use of resources "but most important
of all will be the challenge of managing our world sustainably
and fairly. Many of the natural resources on which we all rely,
and on which our economic development has always depended, are
becoming seriously depleted".
Water
[Paragraph 69] We have no way of knowing
the environmental impacts of DFID's water policies as there is
not a single mention of sustainable water management or environmental
considerations in either of its Water Action Plan updates. This
is entirely unacceptable and must be addressed by DFID immediately.
The Water Action Plan Updates focus specifically
on what DFID is doing to meet the water and sanitation MDG targets
on increasing access to safe water and basic sanitation. They
do not therefore include references to DFID's work on water resource
management, rural development or climate change adaptation, where
principles of sustainability are central. Sustainable, equitable
water resources management is included in our work with partner
governments on water sector governance reform and institutional
strengthening. In addition, DFID is the largest donor for the
Global Water Partnership, (GWP) which is the international lead
for the UN on coordinating and monitoring progress on the MDG
target for Integrated Water Resource Management. GWP is supporting
national Integrated Water resource Management planning in over
20 countries. At the country level DFID also has a number of
programmes working specifically on water management and environmental
sustainability. These include a regional programme in South Africa
on transboundary river management, and China's Water Resource
Demand Management project.
The Role of the Private Sector
[Paragraph 75] We do not take a view on
whether private or public sector involvement is the best way forward
for infrastructure provision. However we are concerned about several
issues. In particular, the fact that the ability of the private
sector to provide an effective water service for the most poor
and most at need in developing countries is increasingly being
called into question. We also take the view that for private sector
provision to be effective in providing a public service it must
exist in a strongly regulated environment, as it does in the UK.
DFID's support to developing countries on water and
sanitation is not principally through the private sector. Over
90 per cent of our funding goes through the public sector, humanitarian
assistance or community organisations. For example, in Bangladesh
DFID has spent £11,500,000 over five years in support of
the UNICEF and Government of Bangladesh programme to provide access
to water, sanitation and improved hygiene practices for 7.5 million
people. DFID is providing £4 million to Southern Sudan to
provide water and sanitation for 400,000 people. DFID is also
providing £6.5 million to the Government of North West Frontier
Providence (GoNWFP) of Pakistan to improve sustainable access
to, and use of integrated safe drinking water and sanitation services
for over 1 million poor people living in the rural communities
of NWFP. This reflects the fact that most service delivery in
developing countries is still through the public sector. However,
we do believe that the private sector has a role to play both
in helping to meet the large finance gap through investment, and
in providing technical expertise.
Where DFID does provide bilateral support to developing
countries to harness the international private sector it is principally
through support for regulation (as in Ghana, Tanzania and Sierra
Leone). DFID supports, mainly through the World Bank, a number
of financial mechanisms for harnessing the private sector including
the Global Partnership for Output Based Aid and the Emerging Africa
Infrastructure Fund. DFID is focusing, through its support to
the Water and Sanitation Programme managed by the World Bank,
on unlocking the constraints to the successful operation of the
domestic private sector in developing countries. DFID also supports
some Public Private Partnerships such as the Water and Sanitation
for the Urban Poor project. This project involves the international
private sector, international NGOs, academic institutions and
consultancy firms. It supports local authorities and community-based
organisations to deliver water services.
[Paragraph 78] Ensuring a robust regulatory
environment assures the provision of infrastructure with minimal
detrimental impacts. Regulatory bodies—if properly
instituted—enable proper water resource management
to be incorporated to ensure a long term sustainable water supply
that does not damage the environment. None of this is possible
without regulation and it is this, not privatisation, which DFID
should be focusing its efforts on if it really is serious about
ensuring long term poverty reduction that is sustainable.
DFID agrees that regulation is important whether
services are delivered by the private or the public sector and
does support developing countries to strengthen their governance
through better regulation of the sector. Good regulation of the
water sector must include regulation of economic (pricing) aspects,
environmental sustainability and the standard of service/water
quality. The infrastructure financing facilities, described in
the response to paragraph 75, support governments to effectively
regulate the private sector and develop approaches for increasing
access to the poorest. In addition, our wider work with partner
governments on institutional strengthening and governance reform
is crucial to building capacity for effective regulation.
Climate Change and Energy
[Paragraph 83] DFID's awareness of climate
change issues, in its policy at least, is not in question. Its
2000 publication Achieving Sustainability: Poverty Reduction and
the Environment covers the issue extensively. It cites numerous
examples of the predicted impacts of climate change, including
the fact that it is estimated that Bangladesh will lose 17 per
cent of its land area due to rising sea levels. And yet, in evidence
to us we were told that DFID is only now—six years
later—beginning to look at how to incorporate climate
considerations into its work.
It is not the case that DFID is only just beginning
to look at how to incorporate climate considerations into its
work. In 2001, DFID commissioned a report on 'Predicted impact
of global climate change on poverty and the sustainable achievement
of the Millennium Development Goals'. The report, published in
2002, provided the impetus for the preparation during 2003 and
publication in 2004 of a series entitled 'Key Sheets on Climate
Change and Poverty' which explored action that can be taken at
national and international levels to manage the impacts of climate
change on the achievement and sustainability of the MDGs. In
June 2004, DFID and Defra jointly commissioned the 'Africa Climate
Report' to review African climate science, policy and options
for action, in preparation for our G8 Presidency focus on Africa
and climate change. The
conclusions of this report were discussed at a joint meeting of
G8 Environment and Development Ministers, in March 2005, following
which G8 Heads committed to taking action.
To take the example of Bangladesh, DFID has piloted
work on climate change and development. It has started work to
understand the risks of climate change with the Government of
Bangladesh and key development partners (particularly UNDP).
DFID posted the first international adviser in the Ministry of
Environment in 2003. Since March 2004 DFID Bangladesh has been
providing financial support to the Comprehensive Disaster Management
Programme—which includes £1.2 million worth of funding
to a Climate Change Cell in the Ministry of Environment and Forests.
During 2006 DFID is looking at how to mainstream climate change
concerns across the DFID-Bangladesh portfolio.
Since Gleneagles, DFID has pushed
forward with implementation of the Gleneagles commitments, including
improving climate change information in Africa and working with
other donors to develop climate risk screening and management
procedures for development investments to increase their resilience
to climate impacts. This will involve setting
up of pilot climate risk assessments in two low income countries
and two middle income countries in Africa and Asia.
DFID has also been substantively engaged in making
operational two UN Framework Convention on Climate Change funds
(the Special Climate Change Fund and the Least Developed Countries
Fund), committing £10 million over three years to each.
[Paragraph 84] DFID must act now to address
the climate implications of how it provides aid—both
directly and through multilateral organisations. It must also—in
the interests of equity—put pressure on the UK Government
and other donor countries to put their own houses in order and
address the environmental impacts of their own actions, including
emissions of greenhouse gases and the unsustainable use of natural
resources.
The response to paragraph 83 describes recent DFID
work on climate change and development. We are taking further
immediate steps to address the climate implications of aid, both
bilateral and multilateral. A good example of this is the work
we have been doing with the multilateral development banks to
develop an Investment Framework for clean energy and development
(in response to a call from the G8 at Gleneagles). The Framework
will help countries to understand and address the links between
the energy choices they make and climate change. Energy efficiency
and renewable technologies will have a key role to play - in both
developed and developing countries. We are helping regional development
banks contribute towards the Investment Framework and are assisting
the EBRD in its Sustainable Energy Programme. We also intend
to fund extra posts in international development agencies
to work on implementing clean energy, climate friendly investments
and to work on adaptation
We are very much part of the UK effort, led by Defra,
to make the case internationally for urgent action to tackle climate
change. Other elements of the Gleneagles Plan of Action on Climate
Change, Clean Energy and Sustainable Development (which all the
G8 signed up to) include improvements to energy efficiency in
appliances and buildings; cleaner vehicles; developing cleaner
fuels (particularly reducing emissions from coal); renewable energy;
and promoting research and development. The UK is calling on
G8 countries to report on progress against these commitments at
yearly 'Gleneagles Dialogue' meetings of Energy and Environment
Ministers. The most recent meeting took place in Mexico in October.
Energy Policy
[Paragraph 88] We invited CDC to give evidence
before us but they felt unable to do so. It is deeply concerning
that a company wholly owned by DFID, which has holdings of nearly
half DFID's yearly aid budget and is responsible for the emissions
of around 2.2 MtC into the atmosphere every year, did not feel
it had any obligation to report to Parliament on its activities
and environmental impacts.
CDC have informed us that they provided written evidence
and were ready to give oral evidence to the Committee. They have
told us that their CEO, Richard Laing, was out of the country
on business on both of the dates proposed by the Committee. He
offered to give evidence on his return, but was informed by the
Clerk that the Committee was not taking any further evidence and
that he was not required to attend.
We understand that Mr Laing and
the Chairman of the Committee have exchanged letters and
that the situation has now been clarified. CDC have emphasised
that they fully understand their responsibilities and are ready
to report to Parliament whenever required.
[Paragraph 91] There is nothing to prevent
environmental parameters, particularly in relation to carbon emissions
and renewable energy, being set by DFID for CDC's investments.
The White Paper includes a commitment to focus on clean energy.
Given CDC's already considerable interest in energy it is in the
ideal position to increase its involvement in this area. Indeed
if we are to believe the Prime Minster's words when he called
climate change a "challenge so far reaching in its impact
and irreversible in its destructive power, that it alters radically
human existence" there can be no argument for it not doing
so.
Included in CDC's Investment Policy are the Business
Principles, which require CDC to ensure that its investee companies
apply best practice in all aspects of corporate social responsibility.
In the case of environmental guidance, the Business Principles
include clear objectives to encourage the efficient use of natural
resources and to promote the improvement of the environment wherever
possible. Its major investee power company also has clear environmental
protection objectives. In order to achieve this, CDC seeks to
assess and minimise the environmental impact both of its own operations
and to invest in businesses which take account of the environmental
impact of theirs.
The Government continues to take the view that it
is the responsibility of the Board of CDC to ensure that the Investment
Policy and Business Principles are followed comprehensively.
[Paragraph 92] DFID's climate change policy
lacks coherence. On the one hand it highlights the seriously detrimental
impacts of climate change on the most poor, and is beginning very
slowly to make this central to how it funds projects. On the other
it is directly and indirectly responsible for very significant
emissions of carbon into the atmosphere through the projects it
funds. This is a contradiction that needs urgently to be resolved.
We do not agree that DFID's climate change policy
lacks coherence. Dealing with climate change is essential to
making development and poverty reduction sustainable. Managed
well, international action to cut emissions could create opportunities
to help developing countries accelerate sustainable development.
This is why a key priority for DFID is working for international
agreements that: stabilise greenhouse gas levels in the atmosphere;
leave room for developing countries to grow; create incentives
and generate investment for clean energy; and help poor countries
to adapt.
There is a clear distinction between the energy needs
of poor households and energy for industrial development in emerging
economies. 2.4 billion poor people rely on traditional fuels for
their livelihoods - this means collecting and burning wood, dung
and other agricultural residues for cooking fuels, which is a
huge burden for women and children. 1.6 billion people have no
access to electricity. Meeting the energy needs of these poor
households with fossil fuels would lead to an increase in greenhouse
gas emissions, but this would only have a tiny impact on global
totals. Industrial development, in contrast, involves much larger
energy demands.
DFID is supporting developing countries to develop
energy strategies that take climate change priorities into account
(i.e. by taking low carbon trajectories wherever possible). At
the same time, these strategies help countries adapt to the impact
of high oil prices. Sustainable energy planning can meet these
twin concerns, as countries increasingly seek to implement efficiency
measures and develop national energy resources, including renewable
resources.
Projects directly funded by DFID have a very small
effect on global emissions. Projects funded indirectly (e.g.
by the World Bank) have greater impact. We work with international
organisations to continually improve their environmental safeguards
to help ensure that their investments are appropriately assessed.
[Paragraph 93] When asked whether it had
any targets on either improving energy supply generally, or increasing
renewable energy use in particular, we were told by DFID that
it had neither. Given the dramatic impacts that even limited improvements
in energy supply can have on the life of the most poor we find
this extraordinary. For DFID to have no clear strategy in this
area, and for its main focus to be to work through multilateral
organisations and its arms length ownership of CDC is entirely
unacceptable. Given the intricate links between energy, poverty
and climate DFID should be focusing with at least equal financial
vigour on increasing supply through renewables and microgeneration
projects.
We do not agree that DFID has no energy strategy.
We have considered whether setting targets would be a helpful
way of increasing action on energy access, drawing on international
experience (for example, targets have been included in an energy
access programme jointly funded by the Netherlands and Germany)
but the experience is that they are difficult to define, measure
and verify. Energy access targets are best set at a national
level by partner countries, taking into account local circumstances
and in support of country-led planning; not by external donors.
The investments needed to improve access to energy
are very large. For example, the World Bank estimates that in
sub-Saharan Africa $4 billion per annum will be needed to achieve
35 per cent electricity access by 2015- at present access is about
24 per cent. Clearly this is well beyond the resource levels
that DFID could provide alone. For that reason we work with other
donors and the international finance institutions to increase
attention and commitments to improving energy access for growth
and development.
We are working closely with the World Bank on their
new Investment Framework for Clean Energy and Development, which
aims to improve access, promote transitions to low carbon economies
and help countries adapt to climate change. The World Bank and
the Regional Development Banks should set themselves ambitious
and stretching targets; together securing total public and private
investment of $20 billion in the next four years to 2010 in alternative
sources of energy, energy efficiency and adaptation. We are supporting
innovative work in the European Bank for Reconstruction and Development
on energy efficiency.
We have pressed the World Bank to do more on renewable
energy and energy efficiency. In June 2004, the Bank announced
that it would increase by 20 per cent a year over five years its
financial commitments for renewable energy and energy efficiency
projects, effectively doubling its efforts to US $400 million
a year by 2010. We welcomed the Bank's commitment but continued
to press for a greater commitment to renewable energy, cleaner
energy technologies and improved energy efficiency. The Bank
committed $680 million to year ending June 2006 on renewable energy
(excluding large hydropower) and energy efficiency.
Renewable energy and other options play an increasing
role in expanding access to affordable services, especially as
fossil fuel prices rise. National energy policies should diversify
supplies and improve energy efficiency.
[Paragraph 94] Encouraging developing countries
not only to adapt to climate change, but also to avoid emissions
whenever possible as their economies grow is not only beneficial
for the climate, it makes enormous economic sense. It will provide
them with a significant advantage in a world that is inevitably
moving towards a low carbon future. More generally, any efforts
that assist countries to avoid the "dirty", and in the
long term costly, development route taken by countries such as
China can be nothing but beneficial.
We agree that low carbon options make sense to mitigate
climate change and enhance energy securit. Interest in renewable
energy technologies and energy efficiency is growing fast. We
support this. As in the response to paragraph 93, the World Bank
has announced increased financial commitments to new Renewable
Energy and Energy Efficiency projects: 37 per cent of power sector
commitments and 20 per cent of Bank total energy sector commitments
in 2006, which reached $4.4 billion.
We are working with our developing country partners
(especially emerging economies) and the multilaterals to make
further progress. For countries with the highest predicted energy
requirements, the Bank has been urged to carry out the necessary
analytical work to ensure that 'lower-carbon' development paths
are integrated into the analysis underpinning its Country Assistance
Strategies and into recipient government's planning documents.
And, as mentioned earlier, we have been working closely with
the World Bank and regional development banks to develop a Clean
Energy Investment Framework aimed at increasing public and private
sector investment in energy efficiency and low carbon technologies
in developing countries. The Framework has Pillars looking at
both mitigation and adaptation - allowing countries to look at
the problem holistically. DFID has provided technical assistance
support to the regional development banks to help them develop
their contribution to this work, and will help them take this
work forward.
Agriculture
[Paragraph 98] We find it reprehensible
that DFID—whatever it is doing on the ground—can
produce such a short-sighted paper on agriculture policy that
whilst clearly setting out the many and serious impacts of careless
and poorly implemented agricultural development, and the need
to minimise these, does not set out how it intends to do this.
The purpose of DFID's 2005 Agriculture Policy Paper
is to provide the rationale for DFID to support agriculture.
It is neither a blueprint nor a detailed operational guide.
The paper outlines principles and priorities that should guide
our work. These include sustainability. The paper
is also clear that, guided by its principles, DFID's country programmes
will develop appropriate responses tailored to context and within
the framework of national strategies for sustainably reducing
poverty and increasing growth.
We do not agree that the agriculture paper is
short-sighted. The paper includes global food and demand and supply
projections to 2025, notes emerging trends associated with globalisation
and changing supply chains, and outlines how agriculture will
need to respond to this changing context. Feedback from our partners
is that the paper has succeeded in getting agriculture back
into development dialogue, largely as a result of its specific
focus on the role of agriculture - particularly improving agricultural
productivity - in accelerating growth and reducing poverty. To
maintain this focus, wider issues such as the role of agriculture
in livelihoods and in food security are covered in complementary
policy papers (which are referenced in the document).
The environment policy paper and DFID's Strategy for Research
in Sustainable Agriculture were produced after the agriculture
paper and picked up on environmental integration and sustainability
issues.
[Paragraph 99] The lack of proper integration
of the environment into agricultural policy is clearly bought
home by the fact that of there is only one very vague commitment
in the policy paper to dealing with environmental impacts, pledging
to support recipient governments in ensuring that agricultural
development strategies provide incentives for the sustainable
use of natural resources and environmental services. It would
be of interest to us to hear from DFID the detail of how it intends
to do this effectively.
In DFID's agriculture paper the environment is integrated
as a component of sustainability. We recognise that there are
lessons to be learnt from the original "Green Revolution"
which, while greatly increasing agricultural productivity, resulted
in adverse environmental impacts due to the overuse and misuse
of water, fertilisers and pesticides. Ensuring sustainability
is therefore one of five key principles, identifying the importance
of:
- better soil and water management for both the
effectiveness of production and the sustainability of agricultural
systems;
- actions to both adapt agriculture to the effects
of climate change, and to mitigate agriculture's own contribution
to greenhouse gas production; and
- reform of perverse incentives governing the use
of water and power.
How these principles are put into practice will be
guided by developing countries themselves, by the priorities and
decisions of DFID's country programmes, and our relative strength
and presence in specific countries. This will include a combination
of direct budget support; rural livelihoods, watershed and income
generation programmes; research; engagement in policy reform dialogue;
and support to other agencies.
Regional approaches include our support for the Comprehensive
Africa Agricultural Development Programme (CAADP), an African-led
process and part of NEPAD which is informing national policies
on agriculture. One of its four central pillars concerns
land and water management and their role in delivering sustainable
growth in agriculture.
Examples of national approaches in Africa include
support to the Plan for Modernisation of Agriculture in Uganda, which
includes sustainable management and use of natural resources.
In Ghana we have worked together with the government and
World Bank in assessing the sustainability of growth, including
in agriculture. The conclusions of this influenced Cabinet decision
making, and has catalysed other processes and work such as the
Country Environment Assessment. Similar work has been conducted
in Nigeria.
[Paragraph 100] There is the potential
for oil prices to increase much further in the next decade if
the warnings about peak oil production are proved to be correct.
If realised they will have serious impacts in developing countries
- and not only on trade and export models of agricultural development.
Because of this it is an issue that DFID must consider as a matter
of urgency.
Predicting oil prices is always difficult and there
is considerable uncertainty about whether current high prices
will be sustained. Currently supplies are improving and high
prices are reducing demand growth, as explained in the IEA's Oil
Market Report of July 2006. Prices may ease over the next few
years, although this depends on many factors including the stability
of supplier countries. Predictions about an approaching peak
in global oil production have been made for many years, but these
have not yet been realised. According to the IEA, oil depletion
is a factor affecting the energy markets but new oil
developments are expected to keep pace with demand. However, we
are aware of the issues and will continue to seriously consider the implications.
Higher oil prices have had an adverse impact on the
economies of poor, non-producer countries, although producer countries
have benefited from substantial windfall revenues. For sub-Saharan
African non-oil producing countries, each $10 increase typically
costs one per cent of their GDP. Some of these countries have
been able to offset this cost with rises in the value of their
own exported commodities. The International Monetary Fund established
a new Exogenous Shocks Facility to complement its existing tools
for helping poor countries affected by shocks like higher oil
prices, and the UK committed up to £50m over five years in
financial support. This assistance will help countries adjust
in the event of further and prolonged rises in oil prices
and other possible adverse changes in the economic environment.
We are working through various programmes with other
donors to help countries adapt to the effects of sustained high
energy costs. Examples include the Global Village Energy Partnership
(GVEP) which helps countries to develop pro-poor energy strategies
and the EU Energy Initiative, which seeks to improve access to
affordable energy services. We are also working with the World
Bank on their new Investment Framework for Clean Energy and Development.
The launch this year in New York of the Global Bio-energy Partnership
(GBEP) is also welcome.
[Paragraph 101] Policy documents such the
Water Action Plan and the Agriculture policy paper both summarise
the potential environmental pitfalls of the development proposed
by DFID. They both fail properly to set out how they are to be
addressed. This is not acceptable. Any policy proposal from DFID
should come with a clear assessment of the environmental impacts
of what is proposed and set out concrete actions and processes
that will be put in place to ensure these are addressed at a strategic
level. Currently this is not the case and as a result it is impossible
to get a clear picture of the impacts of the DFID's activities.
We find this entirely unacceptable and it must be addressed by
the Department.
DFID policies set out approaches to development in
support of developing countries' own processes. They are not operational
guides. We agree that such policies should take account of cross-cutting
issues such as the environment, gender, conflict, governance,
and corruption. But as we say in our response to paragraph 56
we believe our policies have greater weight when they are subject-specific.
We are working to ensure coherence between policy themes but
do not support a mandatory environmental impact assessment for
every policy proposal within DFID - we think that would be a blunt
instrument to integrate environment into DFID policy.
Growth
[Paragraph 102] It is becoming increasingly
clear that there are environmental restrictions that limit the
amount of growth that is possible. The question we must ask is
this: how can poor countries develop within the significant environmental
constraints that we know exist? This is a question that we have
seen little evidence of DFID having posed for itself at a strategic
level, let alone made any attempt to answer.
We recognise that there is an ongoing debate about
environmental and resource limitations to global growth. Recent
estimates suggest that 20 per cent of the world's population consumes
more than 80 per cent of the world's resources. In the
opening section of the White Paper, the Secretary of State clearly
refers to the importance of tackling the consumption patterns
in OECD countries - "meanwhile, the consumption patterns
of those of use already here - mainly in developed countries -
is running at unsustainable levels".
However in poor countries there is overwhelming evidence
that economic growth is the main driver of poverty reduction (see
response to paragraph 106). We recognise that all countries must
pay close attention to the environmental impact of their actions.
First and foremost, developed countries need to address
their own impact on the broader global environment. As outlined
in the new White Paper for example, the Government is committed
to seeking ways to reduce the impact of the UK's consumption patterns
on the environment. For example we are working with DEFRA in
their Food Industry Sustainability
Strategy (FISS), which has been set up to consider how to "secure
significant reductions in the level of external costs associated
with the domestic transportation of food."
We believe it important to recognise the differences
between the local environmental impacts of economic activity,
and the global impacts, especially climate change. For
example, the Committee rightly highlights (paragraph 27) that
the overwhelming majority of carbon emissions are emitted by the
developed world and rapidly developing Brazil, Russia, India,
China and South Africa (the BRICS). However, emissions per person
in much of the developing world are still very low compared to
those of developed countries, with Africa only emitting one tonne
of carbon per person compared to 20 tonnes for the USA. As the
carbon footprint of the poorest countries is so small, it is accepted
that the cost of adjustment should be borne by those who emit
the most. This principle is enshrined in Article 3 of the UN
Framework Convention on Climate Change. A global scheme that
is realistic, robust, durable and fair could help provide the
framework and some of the resources to help developing countries
in their transition to a low carbon economy.
[Paragraph 104] The White Paper does acknowledge
that ensuring that growth is based on the sustainable use of natural
resources is one of the challenges for the future. However, it
does nothing to address the increasing evidence of the tensions
that exist between economic growth and environmental limits, and
the need to tread carefully when pursuing development.
We accept that more work is needed to develop a greater
understanding of the complex relationship between sustainable
use of natural resources and growth, particularly at a country
level. Developing countries will need to develop and use good
practice, and donors can assist.
More work is needed to establish the relationship
between economic growth and environmental degradation. Adverse
environmental impact often owes more to poor policy and regulation
that has accompanied growth in some countries, than to growth
itself. In the early stages of development, growth can be associated
with local environmental degradation, such as local air and water
pollution. Once a country reaches higher income levels growth
can be associated with environmental improvement. However, evidence
also suggests that this argument does not fit the experience of
many forms of environmental change - including biodiversity loss.
There is also less evidence of direct effects of growth on global
issues such as carbon emissions and climate change. As highlighted
in the speech by the Secretary of State in January this year,
it is a myth that developing countries can grow now and worry
about the environment later. Policy measures must be adopted which
reduce environmental degradation whilst supporting development
outcomes. One such measure is to reflect
the value of environment assets in national accounts to complement
existing measurements of economic growth - DFID is preparing tools
and guidance to assist us in including innovative work in this
area in our dialogue with developing country governments and other
partners.
As outlined in our response to paragraph 102, there
is also a need to consider the impact of the policies and actions
of developed countries on the global environment, and on the environmental
resources of many developing countries. For example, we believe
that any future framework for climate change needs to be realistic,
robust, durable and fair. It is also imperative that developed
countries should significantly increase funds for climate change
adaptation and mitigation in the developing world. The work DFID
is doing with the World Bank and the regional development banks
(see paragraph 94) is specifically aimed at helping developing
countries to take a lower carbon development route.
[Paragraph 106] We would like to see DFID
focus on slower, more resilient, growth that addresses the needs
of the most poor and ensures that economic development is not
at the expense of the environment or of those on the economic
margins, who already suffer disproportionately from the impacts
of environmental degradation.
We do not agree that slower growth is necessary or
desirable. The answer lies in sustainable growth, which in many
countries needs to be faster than in the past. Growth in most
poor countries has been painfully slow in recent years. Africa's
growth was negligible during the seventies, eighties and nineties
though real GDP per capita was positive at 1.8 per cent from 2001-06
and is expected to remain positive until 2015.
There is overwhelming evidence that economic growth
is the main driver of poverty reduction. Whilst poverty increased
in Africa during the 80s and 90s, Asia grew at around six per
cent per annum. This level of growth saw the fastest fall in
poverty reduction in human history. Recent research by the World
Bank, DFID, AFD (French Aid) and the German government has estimated
that approximately 80 per cent of the change in poverty in 14
countries in the 1990's can be attributed to growth.
We recognise that growth is a necessary but not sufficient
factor to ensure poverty reduction and therefore DFID is committed
to targeting sustainable pro-poor growth initiatives in its programmes.
For instance, DFID has spearheaded the Extractive Industries Transparency
Initiative, to help ensure that the poor benefit from the sale
of natural resources.
Implementing a policy of slower growth would mean
not meeting the MDGs, thus perpetuating disease and poverty, and
would harm the ability of developing countries to invest in the
kind of technologies that help to reduce environmental degradation.
As outlined in our response to paragraph 28, we need to work
with countries to help promote sustainable growth rather than
promoting "limits to growth".
As an example, the UK and India signed a Sustainable
Development declaration in October 2005 to work closely to find
fresh approaches to global environmental, economic and social
challenges.
Departmental Structure and Capacity
[Paragraph 113] The lack of foresight at
senior level in the Department that has allowed the environment
to lose ground in recent years saddens and alarms us. The widespread
loss of environmental expertise, both in head office and country
offices, is a clear example of this. Sustainability and environmental
issues are complex and cross-cutting, and - we reiterate—vital
to development. They stand little chance of being addressed properly
if DFID does not have sufficient capacity and expertise to ensure
the environment is properly integrated to its work. The situation
must be remedied as a matter of urgency.
It is correct that
we have fewer environment advisers
working in our country offices than in 2003. And since 2005 the
environment head of profession has been combined with another
head of profession post (Livelihoods). Over the same period,
however, posts filled by appropriately qualified Livelihoods or
Infrastructure advisers have incorporated environmental responsibilities
- with the effect that we have the same number of professionals
(20) working on environment as in 2003. Our Sustainable Development
Group in Policy Division, with 40 staff overall, has replaced
the old Environment Policy Department. Our Chief Scientific Adviser
has had input into important environmental issues such as climate
change. We do, however, accept that environmental capacity will
need to be further increased to deliver DFID's White Paper commitments
and we are starting to do this (see response to paragraph 114).
[Paragraph 114] We welcome the Minister's
statement to us regarding the two reviews being undertaken within
DFID: one on senior structure across the Department, and a second
one on advisory skills. We look forward to seeing the conclusions
of these reviews. We likewise welcome the announcement that we
can expect to see an increase in DFID's environmental capacity.
This increase should enhance expertise in both the UK and country
offices, including the creation of dedicated environmental posts
in all country offices where staffing levels make this feasible.
Where this is not possible expertise must be put in place at regional
level at the very least.
As we indicated to the Committee, we are increasing
our capacity to work on environmental issues. As first steps,
we are in the process of recruiting a Head of Profession for Environment,
in addition to a Head of Profession for Livelihoods, and extra
staff to work on climate change. In addition, we are also advertising
for new staff in some regional and country offices. We agree
that where locating environmental advisory capacity at country
level is not feasible then a regional approach is appropriate.
In response to a recent review on environmental screening (see
response to paragraphs 120 to 123) we have developed a work programme
for strengthening our screening procedures. We will ensure that
there is adequate capacity for appropriate screening and follow-up.
This includes additional learning and development and accreditation
procedures for staff having responsibility for completing, signing-off
and following up Environmental Screening Notes (ESNs).
[Paragraph 115] We very much welcome DFID's
increased funding from £3.8 billion per year in 2004/05 to
£5.3 billion per year by 2007-08. However, this makes it
imperative that any changes to staffing and processes for integrating
the environment are comprehensive and timely enough to ensure
these increased funds are spent wisely. We would like to see DFID
set out a timetable for how this is to be achieved.
We agree with the emphasis in this paragraph on ensuring
that capacity and systems ensure that expenditure increases are
spent wisely. In response to a recent review on environmental
screening (see response to paragraph 120) we have also developed
an action plan for strengthening our screening. Environmental
screening will be subject to a further review in 2008/09. We
expect to fill new posts outlined in our response to paragraph
114 within the next six months. We will continue to keep our
staffing needs under review, for example to deliver aims of the
White Paper, within total staff and administration ceilings
Environmental Screening
[Paragraph 120] The quality of environmental
screening notes varies to such an extent that it is difficult
to see how they could have been produced under the same guidance.
This leads us to conclude that, as we were told during our inquiry,
the seriousness and thoroughness with which the environment is
considered in country offices is very much dependent on the knowledge
and commitment of individuals. This has got to change.
We commissioned a review of environmental screening
in DFID by an independent consultant prior to the Committee's
inquiry. The review's findings have been published as Evaluation
Working Paper No. 21, available on the DFID website. The review
considered all interventions over £1 million approved between
April 2003 and March 2005. It shows that some things are done
well and appear to have been improving over the two years. For
the majority (99 per cent) of our activities for which environmental
screening is mandatory an environmental screening note (ESN) was
prepared. Overall the quality was acceptable (72 per cent of
ESNs were rated good or better). However, record keeping needs
improvement (the study found a significant number of cases where
ESNs were not lodged on corporate electronic data systems).
We are implementing a range of measures including
better record keeping, clearer accountability and capacity building
to ensure the screening is carried out to a high standard.
[Paragraph 121] The system as it exists—although
we accept it is currently being reviewed—fails in
its purpose and needs serious reform. The aim of this must firstly
be to ensure that all within DFID take the screening process as
seriously as it deserves to be taken; secondly to ensure that
there are sufficient skills within DFID to ensure that this process
is undertaken properly.
The purpose of environmental screening is to identify
and make recommendations for managing environmental risks and
opportunities. It is not a full Environmental Impact Assessment,
although this may be recommended as a follow up to screening.
The Preface to Evaluation Working Paper No. 21 (see
response to paragraph 120) outlines our response. Divisions have
been requested to systematically review the arrangements
in place for environmental screening and follow up. This includes
making clear where responsibility lies for screening, in line
with new guidance; and ensuring that there is adequate capacity
for appropriate screening and follow-up.
[Paragraph 123] Any system however decentralised
must still be accountable for its actions and the quality of its
work must be assured. If we had found that the environmental screening
process was clearly working we would still be unhappy about the
apparent lack of accountability of country offices as to what
follow up actions are pursued. As it is we are deeply concerned
and hope to see this addressed as a matter of urgency within DFID's
current review of environmental screening.
The Preface to Evaluation Working Paper No. 21 outlines
actions we are taking in this area. Ongoing reforms to our record-keeping,
including programme monitoring and assessment will improve our
ability to report on follow-up actions to screening notes. Over
the next year, we propose to: integrate environmental screening
requirements into our new electronic project and document management
systems; improve guidance and provide best practice examples and
reinforce staff awareness of them; and to develop learning and
development materials and accreditation procedures for all staff
having responsibility for completing, signing-off and following
up ESNs.
We will undertake another review of environmental
screening in 2008/9 which will focus on how measures have been
implemented in the programme.
[Paragraph 126] The conclusions of the
recent evaluations of DFID country programmes could not be more
damning. They demonstrate DFID's failure to implement a coherent
approach to integrating the environment on the ground. They also
clearly show that environmental screening has been allowed to
become nothing more than a poorly drafted paper exercise. The
situation as stands is a tragic waste of both resources and opportunities
that has got to change quickly.
We do not agree. There are good examples of how
country programmes are taking on environmental challenges.
In Rwanda, our engagement includes strategic input
to the design of the UNDP/UNEP Poverty Environment Initiative
to support environment integration in the preparation of Rwanda's
second PRSP, participation in the Environment and Land Use Management
Sector Working Group which is contributing to PRSP development;
support to the land reform process which is essential for better
land and natural resource management, and support for institutional
reform of the Ministry of Agriculture which will include attention
to requirements for sustainable agriculture.
In Ghana, our engagement has included environment-related
support (see response to paragraph 99). The external evaluation
of the Bangladesh Country Programme commented positively on how
DFID integrates environment across a number of programmes, notably
in the transport and water supply and sanitation sectors. The
evaluation also acknowledged that DFID Bangladesh is likely to
increase its actions to directly address environmental concerns
- particularly integrating disaster risk reduction and climate
change across the portfolio.
In Bolivia, other donors have large environment and
natural resource management programmes. Consequently environment
has not been a focus area for DFID. We have nevertheless ensured
that natural resources and environment issues have been mainstreamed
throughout. For example, our work on pro-poor governance included
support to local governments to better manage natural resources.
We recognise, in common with other donors and developing
countries themselves, that the integration of environmental factors
into national development and poverty reduction strategies remains
weak. More needs to be done. DFID is not alone in facing this
challenge and there is a need to find ways for more coherent,
harmonised and effective approaches.
An Environment Strategy
[Paragraph 130] Our only conclusion can
only be that there needs to be an urgent assessment of DFID's
overall approach to environment, encompassing policy, implementation,
and assessment, monitoring and reporting. This must be carried
out at a senior level and have the full weight of support of senior
management. In addition, we call on DFID to produce an environment
strategy, together with a clear implementation plan, covering
the same areas. This must make clear the importance of the environment
as a crosscutting issue and cover all areas of DFID's work comprehensively.
DFID should also report to Parliament on a regular basis on the
environmental impacts of its activities as part of its duties
under the International Development (Reporting and Transparency)
Act 2006.
DFID has a clear policy framework for how we address
the environment in our work. This includes the White Paper, the
Environment Policy Paper and, more broadly, the Sustainable Development
Action Plan in response to the UK Sustainable Development Strategy.
We want to focus our efforts on implementation. We will monitor
progress and keep the need for further measures under review.
DFID reporting frameworks already include cross-cutting
issues. We will report annually to Parliament on the effectiveness
of our aid in achieving the MDGs, including MDG 7 - ensuring environmental
sustainability - as required by the International Development
(Reporting and Transparency) Act 2006. We will monitor progress
in meeting our White Paper commitments. DFID will also review
progress against its Sustainable Development Action plan annually.
[Paragraph 132] Our conclusions in this
Report, together with the similar findings of the European Court
of Auditors on EU development aid, need to be addressed both at
national and EU level. We would hope to see the UK Government
and Commission learning from each other how best to address the
issues and co-operating wherever possible to ensure effective
and coherent policy.
We agree. DFID already engages with the Commission
and Member States on environmental issues and we will continue
to so. The EU Forest Law Enforcement, Governance and Trade Programme
is one example of collaborative working that brings the respective
strengths of the Commission and Member States together. We
will continue to work with the EC and other donors in the Poverty
Environment Partnership. We welcome the outcome of the EU Consensus
on Development that has specific and cross-cutting references
to the environment and natural resources. We will continue to
seek opportunities to second staff into the Commission and other
European Institutions.
The White Paper
[Paragraph 134] The White Paper is another
missed opportunity for DFID to make the environment as central
to its work as it has made clear it should be in many of its policy
documents and in evidence to us. In his first White Paper speech
the Secretary of State called the idea that developing countries
can pursue growth and worry about environmental sustainability
later a myth. Yet again it appears his Department has shown little
willingness to apply these fine words to how it functions.
We are disappointed that the Committee has failed
to recognise the emphasis we have placed on the environment in
the new White Paper. The White Paper states clearly the centrality
of the environment to our mission of poverty reduction. In his
Preface, the Secretary of State says that managing our world sustainably
is the most important challenge for a changing world. The Government
has every intention of fulfilling the commitments set out in the
White Paper.
We are already making progress. We are strengthening
our staff capacity on the environment, as noted above. We are
talking more to key middle-income countries on climate change
and the environment. We are working closely with the World Bank
and regional development banks to develop a Clean Energy Investment
Framework aimed at increasing public and private sector investment
in energy efficiency and low carbon technologies in developing
countries. The Government is working for international agreements
on climate change that stabilise greenhouse gas levels in the
atmosphere; enable developing countries to grow; create incentives
and generate investment in clean energy; and help poor countries
adapt to the impact.
Conclusion
[Paragraph 135] DFID is regarded as a world
leader and innovator in many areas. It now has a firm focus
on poverty reduction, no longer ties aid and has abandoned economic
conditionality; all of which we very much welcome. It has also
produced extensive and very valuable research in many areas, including
the environment. What we would like to see in the future is
DFID taking the lead internationally, as it has with conditionality,
on integrating the environment into development. What is needed
more than anything is the urgent recognition throughout the Department
that the environment is vital to sustainable development and the
will at senior level to ensure this is now translated into working
practice.
We are grateful for the Committee's recognition of
DFID's firm focus on poverty reduction and that it is a world
leader and innovator in many areas. We agree that the international
community—including the UK—must do more to respond
to the growing weight of evidence that our environment is under
threat. If not addressed, much of our current and future progress
in lifting people out of poverty - the mission of the Department
of International Development - could be reversed. Tackling this
means working for a collective response at a global level, getting
UK policy right, and working with our multilateral and developing
country partners. We fully recognise the need for action now.
1 The definition
in the IDA is "any development that is, in the opinion of
the Secretary of State, prudent having regard to the likelihood
of its generating lasting benefits for the population of the country
or countries in relation to which it is provided" Back
2 Fourth Annual
Report into Key Government Web sites. February 2006 ISBN:0-9549825-2-5
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