Appendix: Government response
Integration of climate change and sustainable
development into policy and practice
[Paragraph 16] We are disappointed that DFID could
not provide us with more evidence of progress it has made since
2002 towards fully integrating climate change into its poverty
alleviation programmes, especially in Africa. DFID's programme
in Bangladesh, which seeks to combine climate change and development
objectives in practical ways, its pilot climate screening project
and its assistance to the government to develop a Climate Change
Strategy are steps in the right direction. At present, however,
they appear to be one-off projects rather than clear evidence
of a mainstreamed approach. We believe that such initiatives should
become the norm throughout DFID's country programmes. The Department
should be able to demonstrate much more clearly that climate change
is informing its policy decisions in all the countries in which
it works. We invite the Secretary of State, in responding to this
Report, to set out the steps planned to achieve this.
[Paragraph 43] DFID should set out clearly how
it intends to ensure that climate change forms an integral part
of all its country programmes. In particular, greater clarity
is needed on how DFID plans to scale up one-off projects which
seek to build resilience amongst local communities and ensure
lessons learned from them are communicated widely and acted upon.
[Paragraph 47] We welcome DFID's support for initiatives
such as the Climate Change Adaptation in Africa Programme and
the Africa Climate Policy Centre which are making a valid contribution
to African-led research. DFID should also be commended for its
support for funding streams and pilot programmes which aim to
promote climate resilience, although we note that it will be some
time before these can be evaluated and built upon. The capacity
of developing countries to tackle climate change needs to be strengthened
through support for national and multi-stakeholder dialogues and
for the further development of National Adaptation Programmes
of Action. We request that DFID, in response to this Report, provides
more information on how these key elements of its climate change
work will be funded and taken forward.
DFID's new White Paper, "Eliminating World Poverty:
Building Our Common Future", highlights the critical importance
of climate change for poverty reduction and development. Climate
change hits poor countries first and hardest and threatens to
reverse the gains of the Millennium Development Goals. DFID is
taking steps to "continue to integrate climate change into
development policy and practice". DFID recognises that achievement
of this will require increased capacity to engage on climate change
and now has dedicated posts in our offices in Ethiopia, Kenya,
Tanzania, Mozambique, China, Nepal, Indonesia, Vietnam and India,
in addition to the team in London.
One way in which we will ensure DFID takes a consistent
and comprehensive approach to address climate change in our country
programmes is the implementation of a further White Paper commitment;
the introduction of "strategic programme reviews". These
reviews, currently under development, will provide a framework
to assess priority climate change issues for country offices to
consider. DFID will also ensure that a climate assessment becomes
part of DFID's mandatory environmental screening (of programmes
over £1 million). These initiatives are part of a wider plan
which aims to make DFID "Climate Smart" and increase
our skills and knowledge basis within the organisation, develop
tools and guidance to deliver climate resilient and low carbon
development and ensuring robust monitoring and evaluation systems
are in place to assess the impact in policy and financial terms
of climate interventions. As highlighted by the IDC Report it
will be important to ensure lessons are shared across the organisation,
especially when innovative approaches are used which bring tangible
results
DFID concurs that the capacity of developing countries
needs to strengthen and is supporting this approach through our
Africa regional programme. For example, the UK is supporting longer-term
adaptation planning through its £225 million contribution
to the Pilot Programme on Climate Resilience. In some placessuch
as Nepalthe National Adaptation Programme of Action (UNFCCC
[UN Framework Convention on Climate Change] initiative) has proved
an effective starting point for work on the country's longer-term
adaptation planning.
The Nile Basin Initiative (NBI) is led by the governments
of nine Nile basin countries and aims to improve cooperation over
water resources. It includes capacity building and preparation
of investment projects to increase resilience to climate variability
and change such as flood preparedness and multi-purpose storage.
We also support the Nile Basin Discourse, a civil society network
established to facilitate dialogue and bring greater stakeholder
voice and accountability to Nile development. At national level
in Ghana DFID co-funds with the British High Commission a civil
society dialogue on climate change in advance of Copenhagen, organised
by Christian Aid, SEND Ghana and partners. A further example is
in Bangladesh, where DFID is supporting Bangladeshi participation
in the UNFCCC negotiations. This project will bring together Bangladeshi
and UK policy makers and negotiators to enable them to discuss
how to tackle climate change and work towards achieving a substantive
and equitable deal in Copenhagen.
Cross-Whitehall working
[Paragraph 20] We support the focus in DFID's
Sustainable Development Action Plan on ensuring that sustainability
is at the centre of the Department's development work and that
development objectives are reflected in both domestic and international
sustainability policies and programmes. We were, however, surprised
that the Minister was unable to tell us more about how the Plan
influenced DFID's work in practice. There is a need for greater
coherence across Government on sustainable development. In an
increasingly inter-dependent world DFID needs to work more closely
with other Government Departments, particularly Business, Enterprise
and Regulatory Reform, to increase their awareness of the international
dimensions of sustainable development. The UK's Sustainable Development
Commission has not been engaged meaningfully in international
development issues and could contribute more in this area. It
should have an international as well as a domestic focus. We welcome
the commitment from the Minister of State for Sustainable Development
to review the focus of the Commission. We request that the Government,
in its response to this Report, provides an update on progress
with this review.
[Paragraph 38] We welcome the creation of the
Department for Energy and Climate Change. We expect it to improve
the coherence of the Government's response to climate change.
Addressing the impact of climate change in developing countries
should not be viewed as the sole responsibility of DFID. Other
Departments, such as Business, Enterprise and Regulatory Reform,
the Home Office and the Foreign and Commonwealth Office, have
roles to play. There are important linkages which can be made
between mitigation policies in the UK and adaptation policies
in developing countries which a more coherent Government approach
would strengthen.
We agree that a coherent cross-Government approach
is needed to adequately address the impacts of climate change
and sustainable development in developing countries. DFID engages
strategically with partners from Other Government Departments
on a range of issues. For example, DFID is part of a cross Whitehall
negotiating team in preparation for Copenhagen. The joint BIS
(Department for Business, Innovation and Skills)DFID Trade
Policy Unit works on issues of trade and development, including
specifically with Defra on the issue of food miles. We also work
closely with Defra [Department for Environment, Food and Rural
Affairs] on a range of issues, including sustainable agriculture
and Reduced Emissions from avoided Deforestation (REDD) and on
how we can share relevant experience on adapting to climate change
in the UK with other countries. There is considerable cross-Whitehall
cooperation on migration which includes the Home Office. We are
cooperating with the UK Climate Change Projects Office at the
Department for Business, Innovation and Skills on Clean Development
Mechanism issues. Together with the Foreign and Commonwealth Office,
we are engaging with the World Economic Forum Task Force on Low-Carbon
Economic Prosperity.
DFID's Sustainable Development Action Plan (SDAP)
sets the framework for the Department's contribution to sustainable
development, directly impacting our work in practice. The Department's
performance against the SDAP commitments is reviewed each year
and reported in our SDAP Review. Any lack of progress or failure
to deliver is highlighted through this review process, enabling
remedial action to be taken. Again, directly influencing the way
we work.
Copenhagen Conference
[Paragraph 148] It is vital that rich countries
set very rigorous targets for reducing their greenhouse gas emissions.
These countries bear primary responsibility for current levels
of gases in the atmosphere. Emerging economies and industrialising
countries will also need to take actions but these should be proportionate
to their historic level of emissions. The principles of reducing
global emissions and sharing common but differentiated responsibility
should provide the over-arching framework for the UK's negotiating
stance in Copenhagen.
The UNFCCC lays down in Article 3.1 that:
"The Parties should protect the climate system
for the benefit of present and future generations of humankind,
on the basis of equity and in accordance with their common but
differentiated responsibilities and respective capabilities. Accordingly,
the developed country parties should take the lead in combating
climate change and the adverse effects thereof."
This provision is uncontested and firmly provides
the basis for action by all parties under the Climate Change Convention.
We strongly believe that developed countries need to take the
lead. For that reason the EU has already unilaterally announced
a 20% reduction target which could move to 30% if an international
agreement in Copenhagen is reached including comparable targets
for all developed countries and appropriate action by advanced
developed countries.
The UK has even gone beyond the EU offer and already
laid down an 80% target by 2050 in its national climate change
legislation.
Science tells us that action by developed countries
alone will not be sufficient to ensure that the global temperature
increase remains below 2oC. Actions from developing
countries are essential, especially as their emissions grow much
faster than those of developed countries. The Convention makes
clear that their participation in the global emission reduction
effort should be guided by the principles of Article 3.1, i.e.
responsibility and capability. Therefore we do not agree that
only responsibility should be a guiding principle. This would
not be in line with the object and purpose of the Convention and
would jeopardise the need for a truly global effort in which everyone
plays a role to combat climate change, based on "their common
but differentiated responsibilities and respective capabilities".
[Paragraph 29] We are encouraged by the Government's
strong position on emissions reductions adopted in the lead-up
to the UN Framework Convention on Climate Change conference in
December. We believe that this will provide greater leverage in
encouraging other industrialised countries to make similar commitments.
It is, however, critically important that the UK makes progress
towards meeting its own targets. Failure to do so risks not only
dangerous climate change but might well also undermine global
resolve to tackle the problem.
We recognise the importance of making progress towards
meeting our targets. The UK has already made good progress and
in 2007 greenhouse gas emissions had been reduced by 18% below
1990 levels (this equates to a 21% reduction if the effect of
the EU Emissions Trading System is included).
The UK Low Carbon Transition Plan, published on 15
July 2009, sets out a range of policies and proposals that will,
on current central projections, more than deliver the 34% reduction
required to meet the third carbon budget period (2018-2022). When
we announced the levels of the first three carbon budgets in April
2009 we stated that we would aim to ensure that all effort in
sectors not covered by the EU Emissions Trading System would be
achieved through domestic emissions reductions, without the use
of offset credits. This is still the aim and the Transition Plan
sets out how we will do that. In addition, we will continue to
consider what further measures are needed to reduce emissions.
The UK Government has said that it will tighten the
budgets in the light of an ambitious international agreement.
We will seek advice from the independent Committee on Climate
Change on what level the budgets should be in light of the agreement,
and the subsequent EU effort share.
[Paragraph 149] We are concerned however that
only months away from the Copenhagen conference many countries
are unwilling to put figures on the table. The Government should
take a strong lead in encouraging other high emitters to take
the tough decisions necessary. The EU is apparently waiting to
see what others do before making a commitment to the stringent
targets which are deemed necessary. We understand that this is
a negotiating tactic, but consider it to be a high-risk strategy.
Too many important decisions are being left until the last minute,
with the danger that agreement may not then be secured. A commitment
to achieving a successful outcome and a willingness to be flexible
must be demonstrated by all parties, including the UK and the
EU. The UK should put pressure on its EU partners to make progress
on establishing an agreed negotiating position now.
The EU made a commitment to an emissions reduction
target of 20% through the 2020 Climate and Energy package, agreeing
to raise this to 30% in the context of an acceptable global deal.
Such a deal would include comparable reduction targets from other
developed countries and developing country contributions in accordance
with responsibilities and respective capabilities. The EU has
reiterated its commitment to these targets most recently in the
June European Council Conclusions.
The UK is also continuing to work with its EU partners
to progress the EU position on climate finance through the Council
processes. Progress was made at Spring Council where the EU committed
to financing a fair share of action in developing countries and
identified a shortlist of credible sources for generating finance.
The recent June Councils and informal September Council reiterated
the EU's commitment to climate financing. The UK has taken a lead
in further driving forward the debate on finance with the Prime
Minister's climate finance initiative announced on 26 June. Through
setting out a figure for climate finance and outlining possible
sources, the initiative has encouraged debate and movement both
internally and externally to the EU. The Commission's Communication
on Climate Finance echoed many of the principles in the Prime
Minister's initiative, including a similar global figure for climate
finance. The communication is the basis for negotiation of the
Climate Finance section of the October Council Conclusions. Movement
by developed countries on their position on climate finance will
be crucial for unblocking the negotiations and the EU has demonstrated
serious steps towards this.
The UK recognises that there is much work to be done
in the months leading up to Copenhagen in December and is committed
to working with EU Member States through EU Councils to ensure
that a strong negotiating position can be agreed.
[Paragraph 152] We are pleased that industrialising
countries such as China are beginning to consider appropriate
mitigation actions. The UK Government should encourage such initiatives.
As we said in our recent report into DFID and China "the
path that China chooses, in terms of carbon emissions, energy
use and its sourcing of natural resources, will strongly affect
the international community's efforts to address climate change."
We recommend that DFID ensure that the new Centre for Climate
and Development includes research and policy analysis on climate
change in China as one of its focus areas.
China has recently overtaken the US as the biggest
emitter of greenhouse gases and will continue to be one of the
biggest sources of future emissions, so China's early shift towards
a low carbon economy will have a major influence on global progress.
This will require not just political will, but world-class expertise.
China is a unique country that faces a comprehensive set of development
constraints. It has vast creativity and ability to innovate. It
can serve as a test-bed for ideas and innovation, which can be
shared with the rest of the world. The Climate and Development
Knowledge Network (previously "the Centre for Climate and
Development") will be responsible for developing links and
cooperation with existing organisations and initiatives in all
developing country regions, including China. During the first
year, starting early in 2010, the Network will quickly develop
its focus and approach to low carbon knowledge and research in
China to ensure that it complements and adds value to other international
initiatives. We have already started to formally discuss potential
collaboration with China in regard to the Climate and Development
Knowledge Network. Three avenues are being explored: Chinese involvement
in the organisation(s) running the Network; a formal link with
a proposed China Climate Change Centre, with the UK providing
specific technical advice to the establishment of the China centre;
and, of course, China formally drawing upon the services of the
Network.
Climate change finance
[Paragraph 60] Estimates of the cost of adaptation
vary widely. Funding sources are currently inadequate and the
implications of the global economic downturn for the availability
of future funding have not yet been properly assessed. We believe
DFID should make clear its own plans for expenditure on climate
change measures and that it should encourage other donors to do
the same, in advance of the Copenhagen conference in December.
[Paragraph 61] We support Lord Stern's call for
an increase in the percentage of gross national income which donors
allocate to assistance to poor countries to fund adaptation. Adaptation
represents an additional cost for developing countries which have
made negligible contributions to greenhouse gas emissions. We
believe that developed countries, who bear the greatest responsibility
for climate change, should therefore provide new, additional and
predictable financial flows to assist poor countries to tackle
its impacts. DFID must take the lead on making clear its commitment
to the principle that climate change funding will be additional
to its existing pledges on official development assistance. The
UK will then be in a strong position to exert pressure on the
international community to adopt this approach.
[Paragraph 155] Establishing the principle of
additional funding for adaptation is crucial to securing agreement
in Copenhagen. We appreciate that it may be too sensitive for
developed countries to make firm commitments at this stage, but
the UK Government should show moral leadership and confirm that
it will indeed be putting new funding on the table in Copenhagen.
This would send out an important signal to poor countries that
the developed world is prepared to meets its responsibilities
towards them. It might also encourage other donors to be equally
bold in fulfilling their clear obligations on adaptation costs.
The Prime Minister has put forward a strong proposition
on climate finance for consideration in an ambitious Copenhagen
deal. While some elements of the proposal are gaining traction
in the international negotiations, it is unclear what the final
outcome will be. The key elements of the proposal are as follows:
- Developed and developing countries work together
on a global figure of around $100 billion per annum by 2020 to
help developing countries address climate change; this would help
pay for developing countries' plans to reduce emissions, technology,
avoiding deforestation and for adaptation.
- $30 billion will be needed per annum by 2020
to fund adaptation, with international public finance meeting
a significant proportion of this.
- Expanding and enhancing the global carbon market
(emissions trading) to deliver a significant proportion of this;
- Agreeing that all countries should use a transparent
and regularly updated formulabased on ability to pay and
emissionsto determine how much they will each contribute,
though the poorest countries should be exempted (this is already
an EU position);
- Supporting an "automatic" mechanism
for generating predictable and credible flows of international
public finance by auctioning a small proportion of international
emissions allowances, as proposed by Norway. However, if countries
are unable to participate in such a scheme, they should use comparable
domestic legislation to provide adequate predictable finance (for
example the provisions in the Waxman-Markey Bill);
- Exploring possible revenues which could be generated
from including aviation and maritime emissions in an agreement;
- Agreeing to provide finance that is additional
to existing Official Development Assistance (ODA) commitments,
whilst also achieving the UN target of 0.7% of GNI;
- Ensuring all ODA is climate proofed, and earmarking
a distinct and limited proportion of ODAup to 10% for the
UKwhere it achieves both climate change and poverty reduction
objectives;
- Agreeing to put in place new institutional arrangements
for delivering climate finance that ensure developing countries'
own priorities are at the centre, using "plans" drawn
up by developing countries;
- Exploring whether we should establish a new "high-level
body", with equal representation of developed and developing
countries, to manage climate finance.
Governance of climate finance
[Paragraph 67] Donors cannot and should not manage
developing country government budgets. It is, however, important
that donors work with partner governments to establish mechanisms
which would help to provide greater certainty that the large sums
of money allocated for adaptation to climate change are used effectively
for this purpose. We believe DFID should apply the same rigour
to this as it seeks to put in place for development assistance
expenditure. We request that, in response to this Report, DFID
provides further information on the monitoring and evaluation
mechanisms which it has or plans to put in place to ensure that
adaptation funding is used for its intended purposes.
As explained in the Prime Minister's recent announcement
on climate finance, the UK Government sees effective accountability
arrangements as an essential part of the future climate finance
regime. We expect the same standards for fiduciary risk management
to be applied to taxpayers' money that is used for climate finance
as for Official Development Assistance. Our current arrangements
for climate financing reflect this. For example, in Bangladesh
the UK has chosen to support the country's own climate change
plan by contributing £60 million to a multi-donor trust fund,
administered by the World Bank and another £15 million for
comprehensive disaster management and strategic initiatives.
The UK's proposed "compact" approach to
the future governance and delivery of climate financeincluding
adaptation financealso includes provision for strong accountability
arrangements in developing countries. In countries where government
systems are relatively robust, this approach would entail putting
finance directly into government budgets. Accountability would
be ensured by a) demonstration by the government concerned of
a minimum level of fiduciary risk management capacity, and b)
annual reporting of progress made against agreed objectives. In
countries where government systems are weaker, finance would be
channelled into a national pool managed by a third party, and
spent according to the country's own plans.
Monitoring and evaluating the effectiveness of national
level action on adaptation is a new challenge for donors and recipients.
DFID is supporting the World Resources Institute to work with
developing countries to develop and test methodologies for doing
this. These will be piloted in at least one of the countries benefiting
from the Pilot Programme for Climate Resilience (PPCR) and lessons
will be shared at the UNFCCC and other fora. As the PPCR is the
cornerstone of UK adaptation support, we have put in considerable
effort to ensure one of its key functions will be to help developing
countries put in place their own robust monitoring and evaluation
frameworks for their climate resilient plans and programmes. Furthermore,
all expenditure under the PPCR will be made in accordance with
standard World Bank and Regional Development Bank procedures,
in line with other ODA.
Environmental Transformation Fund
[Paragraph 65] The Government has allocated £800
million from the Environmental Transformation Fund (ETF) to be
used for climate change work as part of the World Bank's Climate
Investment Funds. This is a substantial sum of money and it is
important that the way it is spent is properly scrutinised to
ensure that it is achieving its intended objectives. We request
that, in response to this Report, DFID provides us with an evaluation
of the use of this ETF expenditure to date, including how it is
contributing to poverty reduction, and that this information is
regularly updated.
The UK has so far deposited £300 million into
the World Bank's account at the Bank of England in the form of
promissory notes. The World Bank acts as trustee for the Climate
Investment Funds (CIFs). In June 2009, the World Bank encashed
the first £91.1 million of the UK's contribution. While
it is therefore too early to evaluate the use of Environmental
Transformation Fund expenditure, the CIFs are progressing well.
The first three investment plans for the Clean Technology Fund
have been endorsed, for Egypt, Turkey and Mexico. Four projects
have been approved and implementation will begin very soon. Nine
pilot countries have been selected for funding from the PPCR,
and programme design has now begun in these countries.
The design phases of the Scaling-up Renewable Energy
Programme and the Forest Investment Programme ended in May and
July 2009 respectively. Each CIF project will be monitored using
multilateral development banks' standard existing monitoring systems
and processes. We will work as a CIFs Trust Fund Committee member
to develop robust monitoring of the CIFs that meet the UK's reporting
requirements, including on how the CIFs contribute to poverty
reduction. We will provide the first annual report to the IDC
by January 2010.
Aviation emissions
[Paragraph 73] An air travel levy aimed at reducing
aviation emissions is likely to have a greater impact on behaviour
in relation to short-haul flights because travellers have more
choice of alternative modes of transport for short journeys. Air
passenger duty may influence a decision about whether to fly to
Paris but not to Tanzania, for example. Taxation could therefore
be a useful tool for changing behaviour and reducing emissions
in relation to short-haul flights but is less likely to have a
similar impact on long-haul journeys.
[Paragraph 76] We believe that an international
aviation levy would be a welcome additional source of funds for
adaptation. The International Civil Aviation Organisation may
be successful in securing agreement for its proposed scheme, which
it is estimated could raise up to $10 billion a year. However,
if there seems to be insufficient progress in this forum, we recommend
that the UK Government consider supporting the Group of Least
Developed Countries' proposal for a similar scheme, as part of
the measures to be discussed at the Copenhagen summit.
Air Passenger Duty ensures that air travel, whether
short or long haul, makes a fair contribution towards the UK Government's
spending priorities, including public transport and the environment.
It also plays a valuable role in ensuring that passengers understand
the environmental costs of their actions, in relation to both
short-haul and long-haul flights
It has been agreed within the International Civil
Aviation Organisation (ICAO) that open emissions trading is the
most appropriate form of market based measure for addressing emissions
from international aviation. However, the UK Government is not
convinced that international hypothecation is the best way to
raise climate finance. The Government does not in general hypothecate
revenue in such a way, as it can create inefficiencies in both
revenue raising and spending, as well as volatility of funding.
Tax and spending decisions should be taken in the round at Budgets,
Pre-Budget Reports (PBR) and Spending Reviews. To ensure sound
management of public finances and maintain credibility of fiscal
policy, it is essential that these procedures are followed. This
also enables the wider fiscal context to be taken into account,
aids good policy-making by allowing consideration of the overall
economic and distributional impact of tax and spending policies,
and ensures we are able to make trade-offs to meet all UK Government
priorities.
The Government maintains that international aviation
and maritime transport emissions should be capped, and recognises
that mechanisms for reducing emissions in these sectors could
also potentially yield revenues for climate financing. However,
we would not support any form of mandatory hypothecation and such
a system for raising climate finance from these sectors would
need to respect fiscal sovereignty.
Currently, the Exchequer treats revenues accruing
from the auction of emissions permits within the EU Emissions
Trading Scheme in the same way as all other revenues; and finance
disbursed for climate change mitigation and adaptation (e.g. the
UK Government's contribution to the Climate Investment Funds)
is decided through the usual Budget / PBR and Spending Review
process.
[Paragraph 77] We are concerned about a possible
decrease in the number of UK tourists visiting developing countries
which an increase in air passenger duty might cause. We therefore
also recommend that, for flights originating in the UK, compensation
is given for any new Adaptation Levy on an economy fare by making
an equivalent reduction in the UK air passenger duty for passengers
travelling to long-haul destinations in developing countries.
This could form part of any new financial commitment under the
Copenhagen agreement.
The Prime Minister has put forward an ambitious initiative
on climate change finance. Within this context, the UK Government
will explore the role that action to reduce emissions in shipping
and aviation has in providing carbon finance to generate emissions
reductions in developing countries.
However, as set out above, the UK Government is not
convinced that an international hypothecation is the best way
to raise climate finance. Air Passenger Duty ensures that air
travel, whether short or long haul, makes a fair contribution
towards the Government's spending priorities, including public
transport and the environment. Long-haul flights account for around
20% of all flights originating in the UK.
Towards low carbon development
[Paragraph 113] We are pleased that DFID has begun
to engage in research on low carbon development paths. There is
a pressing need for more research into options for low-income
countries. We believe that DFID should build this capacity in
developing countries and facilitate greater research collaboration
between them. We welcome the establishment of the Centre for Climate
and Development and recommend that its remit include development
of knowledge which is relevant to, and driven by demand from,
low-income countries.
[Paragraph 124] We appreciate that the Clean Development
Mechanism is a relatively new mechanism and that there are bound
to be teething problems. However these need to be resolved urgently.
The CDM has the potential to make a significant contribution to
emissions reductions in developing countries but to date it has
had little impact in poorer developing countries and there are
few projects in Africa outside South Africa. The geographical
distribution of CDM projects needs to shift towards Africa in
any new iteration of the Mechanism. Proposals to reform the CDM
should have this as a primary objective. We recommend that DFID
consider funding appropriate demonstration projects in Africa
to encourage this. "Additionality" of projects also
needs to be properly defined to help provide confidence that the
Mechanism is achieving its objectives. We are also cautious about
a mechanism which could be seen purely as a technical solution
to harmful emissions. If developing countries are to benefit,
and if the sustainable development objectives of the UNFCCC are
to be met, the CDM should be more closely linked to poverty reduction
strategies in developing countries. We believe that DFID should
seek to address these issues at the Copenhagen conference.
[Paragraph 130] The transfer of low carbon technologies
to developing countries is essential if they are to avoid high
carbon growth. Greater effort is required to ensure that the benefits
of rapid technical progress in developed countries are shared
with developing countries, where such technologies are appropriate.
Facilitating appropriate low carbon technology in developing countries
is an initiative which offers potential for a joined up UK development
and trade policy approach and is one which the Government should
explore. The private sector has an important role to play and
should be encouraged to participate. We recommend that DFID examine
how it can work with the Department for Business, Enterprise and
Regulatory Reform to establish a programme to facilitate UK private
sector involvement in low carbon technology transfer to poor countries.
We agree with the report's recommendations on the
Climate and Development Knowledge Network, the need for reform
of the Clean Development Mechanism (CDM), and involving the private
sector in development, diffusion and deployment of low carbon
technologies relevant to developing countries.
The services of the Climate and Development Knowledge
Network will be driven by demand from developing countries. It
will need to provide particular support to low income developing
countries where the impact of climate change is expected to be
the most severe and where the institutional capacity to address
climate change is often weakest.
On the CDM, we recognise that to date the supply
of credits has been dominated by a relatively small number of
developing countries and that many others, particularly least
developed countries, have not been able to benefit from the CDM
and its flows of finance. We recognise the need to enable greater
participation by low income countries in the future carbon market
in order to support mitigation efforts and contribute to wider
development objectives. However, the primary function of the carbon
market is, and should be, as an abatement tool, not a mechanism
for redistribution.
Redirecting carbon market flows to countries with
low emissions profiles and high costs will distort the functioning
of the carbon market and undermine our overall goal to reduce
global emissions. This would in turn be strongly inconsistent
with development, given the high costs that unmitigated climate
change would have in developing countries. Instead we believe
efforts should be focused on reforming the CDM to improve its
efficiency and effectiveness, supporting capacity building in
low income countries, and bringing emissions from land use, agriculture
and avoided deforestation into the carbon market beyond 2012.
These reforms would allow least developed countries greater access
to carbon market finance. Finance from the carbon market is just
one element of the package of finance that will be required to
support action by developing countries on climate change: public
funding will also play an important role. Furthermore, the UK
strongly believes that climate finance should be additional to
existing ODA in order to safeguard commitments to poverty reduction.
As the Committee's report highlights, private sector
investment in low-carbon growth in developing countries is essential,
which is why we are working closely with the private sector itself,
as well as with other government departments and international
organisations in this regard. For example, we are cooperating
with the UK Climate Change Projects Office at the Department for
Business, Innovation and Skills on CDM issues, with a particular
focus on its potential take-up in Africa. Together with the Foreign
and Commonwealth Office, we are engaging with the World Economic
Forum Task Force on Low-Carbon Economic Prosperity, which joins
together over 80 multinational businesses, banks and investors
from all geographies and sectors who support technological development
and investment in the low carbon agenda, especially in developing
countries. Finally, together with the UN Environment Programme's
Finance Initiative and with other organisations, we are co-funding
a research project which looks at innovative public financing
instruments and their potential role in leveraging private sector
financing for climate change mitigation and adaptation. The findings
of the project should assist with furthering our understanding
of the most effective ways of deploying limited public resources
to attain scaled-up private sector investment into key technologies
and sectors for low carbon growth.
Meeting the energy needs of the
poorest
[Paragraph 135] It is inevitable that many developing
countries will continue to rely on fossil fuels and biomass for
their energy requirements for some time to come. However these
countries are historically low emitters and equity demands that
they should be permitted to ensure that the poorest people are
able to meet their basic energy needs even where this relies on
high carbon methods. Emphasis on low carbon growth should not
take precedence over ensuring developing countries can tackle
more immediate social needs. Small-scale initiatives such as the
jatropha fuel project we saw in Kenya provide innovative opportunities
to improve the livelihoods of the poorest whilst meeting their
energy needs in a sustainable manner. Scaling up such small-scale
projects and replicating them across developing countries is the
next essential stage and requires the support of donors, including
DFID.
[Paragraph 138] Meeting the energy needs of the
poorest in a sustainable way means that low carbon technologies
must be made available, free or at a low cost with high incentives,
to the poorest and most vulnerable. This includes biofuel technologies
where opportunities exist to develop these sustainably and without
negative repercussions on food security. We understand that more
research is needed into how best to ensure low carbon technology
and know-how is transferred from developed to developing countries,
and between developing countries. Methods of scaling-up from pilot
projects to commercialisation also needs examination. This research
should form part of the remit for DFID's new Centre for Climate
and Development and where possible should be undertaken in developing
countries. While many developing countries are currently low emitters
it is important that research is carried out quickly so that it
is available as they begin to move towards increased industrialisation.
We agree that countries with very low emissions should
not be expected to sacrifice their development objectives as a
result of climate change. This is why DFID has emphasised low
carbon growth. We recognise the serious constraints that many
low income countries face in meeting their energy needs, and welcome
the attention that is now being given to this issue. Evidence
shows that low carbon technologies are frequently the least-cost
solution to rural energy access under a wide range of conditions,
and this is before environmental and climate change benefits are
considered. This is why we are putting significant funding into
the Scaling-up Renewable Energy Programme (SREP) as part of the
UK's £800 million Environmental Transformation Fund (international
window), which will demonstrate how low carbon approaches can
be incorporated into energy sector development in such countries.
Simply increasing energy access will not on its own
solve the problemthis must be combined with enterprise
creation and new job opportunities so that improved energy provision
helps support local economic development, for example, by powering
mills, workshops, or health and education facilities. Such an
approach helps ensure that energy services are financially viable
over the long term.
In relation to biofuels, for some countries these
could be an appropriate response, either for domestic consumption
(thereby contributing to national fuel security and reducing imports
of expensive oil); or for export (thereby contributing to economic
growth). Suitable countries are typically those with plentiful
land and water resources, such as Tanzania and Mozambique. DFID
is currently co-funding a World Bank study seeking to establish
principles of best practice for biofuels development in Africa.
This is expected to be finalised later this year. Any scaling
up needs to be undertaken with care, and will require strong monitoring
and regulation by national governments. The World Bank study will
help national governments develop appropriate regulatory polices.
In addition, DFID is supporting economic and social research through
the Consultative Group on International Agricultural Research
(CGIAR) which will help developing countries respond to biofuel
market opportunities in a way which protects domestic food security
and the livelihoods of the poor, as well as developing new crops
as a source of biofuels.
As the report points out, we need to do more to scale
up low carbon technologies from pilot phase to commercialisation
and mass deployment. This is why we have recently begun a new
work programme to explore how "advance market commitments",
which have been used in the health sector to promote investment
in vaccines, could be used to create markets for low carbon technologies
at scale. The Climate and Development Knowledge Network will also
help developing countries to understand the commercialisation
and scaling-up of low carbon technologies and support faster implementation
on the ground. The Network will have a particular focus on getting
knowledge and research into use in developing countries. It will
be responsive to their needs and will use their expertise wherever
possible. The Network's inclusive approach will facilitate the
sharing of experience and knowledge in and between developing
countries. Capacity building is an important feature of the Network's
planned activities, since many countries lack capacity in climate
change. Technologies and know-how will also be deployed more quickly
if strong incentives are in place, so the Network will help countries
to understand low carbon development opportunities, policy implications
and finance.
Economic growth and natural resource
management
[Paragraph 51] Economic growth cannot be sustained
unless it takes into account the proper value of the resources
upon which it depends. Conservation and preservation of natural
resources are therefore contributors to sustainable development.
DFID has not been directly involved in the marine or forestry
sectors for some time and yet they are vital to poverty reduction
in some countries. We believe that the Department needs to begin
to re-establish its engagement in them. DFID has a water resources
management strategy. It should also now urgently consider developing
marine and forestry management strategies. The potential for development
in these sectors should also be included in the work of the new
International Growth Centre.
DFID recognises that business as usual growth at
the expense of the environment is no longer an option. The new
White Paper explicitly recognises the need to take into account
the full value, and impact on, the environment. It sets out our
plans to help countries achieve green growth, and how we plan
to deliver on our commitments on sustainable forest management.
To help achieve this, DFID and Defra plan a new initiative to
support developing countries value their natural capital for sustainable
growth. This will build on existing work such as The Economics
of Ecosystems and Biodiversity initiative (TEEB), and will use
research results from the new Ecosystem Services and Poverty Alleviation
programme, a joint initiative of DFID, the Natural Environment
Research Council and the Economic and Social Research Council.
We agree about the vital role of renewable natural
resources, especially forests and fisheries, as the engines of
sustainable growth in developing countries. The International
Growth Centre (IGC) has been established to promote sustainable
growth by answering questions from developing country policy-makers
and providing country-specific advice. If developing countries
identify fisheries and forestry as priority sectors, the IGC will
look to see how they can best support them in these areas.
Defra lead on the international regulation of marine
and forestry issues. While DFID's bilateral programmes on fisheries
and forestry have reduced, DFID has remained active in these sectors.
It has continued to support fisheries and forestry research, and
has supported programmes aimed at governance and institutional
reform to tackle illegal logging and fishing. For example, DFID
and Defra played a leading role with the EC in developing the
Council Regulation (No 1005/2008 of 29 September 2008) to prevent,
deter and eliminate illegal, unreported and unregulated fishing.
DFID closely supports the negotiation of Voluntary
Partnership Agreements aimed at tackling illegal logging between
the EU and key forest nations. These have a key role in governance
reform in a number of countries. DFID and Defra are also playing
a leading role with the EC in the negotiation of the proposed
Council Regulation 644/2008, the timber Due Diligence Regulation,
which sets out the responsibilities of operators placing timber
and timber products on the market.
In June 2008 the UK and Norwegian Governments set
up the £100 million Congo Basin Forest Fund to help local
communities in eight countries make a living from forests while
at the same time protecting them.
DFID is building upon these efforts and has made
other significant new commitments in forestry and fisheries over
the last two years. These include: the Forest Governance and Trade
Programme (£24 million); the Forest Investment Programme
(£100 million); and, the Partnership for African Fisheries
with the African Union and New Partnership for African Development
(NEPAD) (£7 million). DFID and Defra are also planning a
new programme on international fisheries governance and trade
policy.
Tourism
[Paragraph 89] We understand that it is not possible
for DFID to be involved in every sector in developing countries
and appreciate that tourism may be an area where it feels it no
longer has a comparative advantage. However, given the economic
importance of the tourism industry to so many developing countries
in which DFID has a programme, and its inclusion in many Poverty
Reduction Strategy Papers, the Department cannot afford to ignore
it. Capacity-building in the sector, including training and development
for local employees, could form part of DFID's livelihoods and
growth programmes in countries where tourism makes, or has the
potential to make, a significant contribution to the economy.
[Paragraph 91] We accept the argument that it
is important for the UK to maintain its engagement with the UN
World Tourism Organisation. If the Department for Culture, Media
and Sport is not able to continue to find the membership fee,
we believe that DFID should take this over. We believe that membership
of the UN World Tourism Organisation would sit comfortably within
DFID's remit and would enable it to influence wider debates on
the contribution that tourism can make to poverty reduction and
on the need for the tourism sector to address climate change.
DFID country programmes will consider tourism initiatives
where they judge them appropriate for helping partner countries
deliver their growth and poverty reduction objectives. However,
we anticipate that these will remain few in number and DFID will
not devote centralised resources to tourism initiatives. This
is consistent with DFID's overall policy on growth, which is not
geared towards specific sectors except where deficiencies in those
sectors are imposing constraints on overall growth or where the
sector is especially important for maximising the opportunities
for significant numbers of poor people to participate in growth
(such as agriculture). Much of DFID's growth work focuses on
helping partner governments improve the overall environment for
private sector activity and in so doing benefits all sectors including
tourism. In those cases where specific support for tourism fits
with this framework and where we can demonstrate clear links to
poverty reduction then DFID country programmes would consider
supporting the sector.
We do not agree that the UK should continue its membership
of the World Tourism Organisation. The decision to withdraw was
not taken lightly but was based on an assessment of where the
Government should best focus resources to deliver international
tourism objectives, including those of poverty reduction and climate
change. It was judged these could be best pursued through a range
of other international and regional fora, including the EU Tourism
Committee and the World Travel and Tourism Council. The UK is
also a member of the OECD's Tourism Committee. DFID's vision for
the UN, set out in the new White Paper, is of a focused and effective
UN, where the agencies plan, manage and deliver as one for the
most vulnerable people. This will mean hard choices about the
areas where the UN can add real value and where it cannot, and
where the UK Government should focus its support for the UN's
efforts.
Food and horticulture exports
from developing countries
[Paragraph 100] There is a danger that steps taken
by consumers in the UK to reduce their contribution to carbon
emissions may lead them to avoid buying produce from developing
countries in the mistaken belief that air-freighted food and flowers
necessarily have a higher carbon footprint. We believe that consumers
need accurate information about the way products have been grown
as well as transported. Labelling imported fresh produce to show
total carbon emissions for the whole production cycle would be
a useful tool to enable consumers to make informed choices about
the goods that they buy. We believe the UK Government should conduct
research on how such a scheme might be introduced and carry out
an assessment of the potential benefits to producers in developing
countries.
[Paragraph 101] The Government could also consider
paying to offset the air freight emissions of horticultural products
from developing countries. Ideally this would be done through
funding sustainable mitigation projects in the exporting countries,
which would provide poor countries with a double dividend of supporting
their export earnings and contributing to their domestic low-carbon
development. This proposal could be a worthwhile use of funds,
particularly if it could be counted against compliance with any
financial commitment made as part of a new global agreement reached
at the Copenhagen summit. We therefore recommend that the Government
explore its feasibility prior to the Copenhagen conference and
report back to us on its conclusions.
Current evidence suggests that environmental labelling
in itself actually has limited impact on consumer choice at present,
partly because of the complex factors behind choice and behaviour
and because labels may run the risk of confusing rather than helping
consumers. However the UK Government agrees this needs to be
explored in more detail and the Department for Environment, Food
and Rural Affairs will shortly be commissioning a research project
to look at various green labelling schemes, the practicalities
of such labelling, their impact on consumer behaviour change and
cost/benefit analysis to the food industry. This study will include
consideration of how imported foods could be included in such
labelling schemes and how trade might be affected by their introduction.
It is important that the agreement at Copenhagen
provides sufficient finance to enable developing countries to
take action on mitigation and adaptation. However, the proposal
of paying to offset emissions for horticultural products would
not only be very complicated to administer, but is also unlikely
to be feasible as a global climate finance mechanism. The complexity
of the mechanism proposed would make it expensive to administer
and difficult to ensure that mitigation reductions were achieved.
This would not be a politically feasible proposal for agreement
internationally at Copenhagen since it would entail payments for
embedded carbon. The UK is leading on proposing a global fund
for adaptation and mitigation to which all countries except the
least developed would contribute according to their capabilities
and responsibilities. We are pushing for agreement on these principles
at negotiations; a proposal to incorporate offset payments into
this mechanism would complicate and undermine this negotiating
position.
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