3 Poverty, natural resources and
adaptation
31. Climate adaptation refers to the process of "adjustment
of natural or human eco-systems in response to actual or expected
climatic stimuli or their effects, which moderates harm or exploits
beneficial opportunities."[47]
DFID notes that "such actions should ultimately enhance resilience
or reduce vulnerability to actual or expected climate change."[48]
Adaptation is thus an ongoing process of development and change
in response to new, potentially more hostile, climatic conditions.
One of the enabling conditions for development and climate adaptation
which is often ignored is the natural resource base upon which
livelihoods depend. This chapter looks at the links between development
and climate change including natural resource management, pro-poor
economic development and climate resilience. It also examines
the need for additional finance to help pay for climate change
adaptation in developing countries.
Linking climate change and development
32. Millennium Development Goal 7—ensuring
environmental sustainability—under-scores the strong links
between development and the environment. Climate change makes
this linkage even more significant. As our predecessors said:
with climate change, vulnerability and impacts are changing and
often putting poor people at greater risk.[49]
The 2008 UNDP Human Development Report stresses this link:
Climate change will undermine international efforts
to combat poverty. […] Looking to the future, the danger
is that it will stall and then reverse progress built up over
generations not just in cutting extreme poverty, but in health,
nutrition, education and other areas.[50]
33. Yet, as Simon Maxwell, former Director of the
Overseas Development Institute (ODI) noted, there is often insufficient
collaboration between the climate change and the development communities.
He believed that climate change should have a high profile in
all development programmes and that climate change experts should
consult with development experts to increase understanding of
the politics and institutional complexities of natural resource
conservation.[51]
34. The IPCC's fourth assessment report set out many
of the linkages between adaptation, mitigation and development.
The chapter on adaptation and mitigation linkages produced an
inventory of the major links while noting that not every action
needs to support both.[52]
Stronger mitigation policies in the industrialised world will
reduce the need for adaptation in developing countries. Policies
on mitigation and adaptation should therefore not be developed
in isolation.[53] IIED
emphasised this point to us:
Adaptation and mitigation—it is a false
dichotomy […] If there are going to be trade-offs in the
way the negotiations proceed, perhaps a better understanding of
the way that mitigation and adaptation need to be linked into
the future needs to happen.[54]
DFID has recently created a Climate and Environment
Group in its Policy and Research Division and has brought in specialists
from other Government Departments. These initiatives are an important
starting point for ensuring the science of climate change informs
development policy.
POLICY COHERENCE
35. It is not only development programmes which should
take account of climate change. The impacts of climate change
will cut across sectors and indeed regions. Policies on migration
or trade, for example, can have direct implications for development
and, increasingly, responses to climate change. World Development
Movement (WDM) told us about a proposal for an open-cast coal
mine in Bangladesh. The mine would displace more than 40,000
people. WDM pointed out that land in Bangladesh was already under
pressure from climate change:
Bangladesh is already one of the most densely
populated countries in the world, with huge pressures on land.
Rising sea-levels and increased flooding from climate change are
and will make good quality land even scarcer. Atiq Rahman from
the Bangladesh Centre for Advanced Studies, a lead author from
the IPCC, has said that 35 million people could be displaced from
Bangladesh coastal areas by 2050. In the face of climate change,
it would be disastrous for local people to be displaced from the
good quality land in Phulbari. [55]
WDM expressed concern that the UK Government appeared
to be supporting this investment by a UK company without sufficient
attention to the social and environmental implications of the
proposal.[56]
36. We had discussions in Tanzania about the potential
impact of a proposed soda-ash plant near Lake Natron which is
the main breeding ground in east Africa for the lesser flamingo
and one of only four breeding-sites in the world. On the face
of it, the project would bring economic development to the area.
But the economic benefits were likely to go mainly to the foreign
owners, and few of the jobs created would be suitable for local
people, while the plant threatened to destroy the fragile ecological
balance in the area.
37. DFID told us that there had been a transformation
across Government in response to climate change.[57]
The creation of the Department for Energy and Climate Change,
which will lead on international climate change negotiations provides
one example of this. DFID also indicated that a number of official
and ministerial-level working groups and boards had been set up
to address aspects of international climate change and pointed
to the Cross Whitehall Board for the Environmental Transformation
Fund.[58]
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.
Development in a hostile climate
39. Beyond the next decade or so IPCC projections
indicate that climate change adaptation will need to address increasingly
serious climatic conditions. This will require fundamental changes
in development practice. Lord Stern described adaptation to us
as "development in a more hostile climate" and said
that it would require a very significant increase in funding,
a greater degree of natural resource management and improved development
planning.[59] As DFID
noted:
Climate change is putting extra pressure on the
sustainability of eco-systems and other natural resources that
are already suffering the consequences of growing global demand
driven by rising consumption and population growth. Climate change
is exacerbating environmental degradation, further exposing the
dependence of the poor on the natural environment and compromising
their resilience and ability to adapt. Climate change impacts
are likely to push greater numbers of people into poverty.[60]
40. The reality of current climatic stresses means
that there is a very urgent requirement to act now to build up
the resilience of communities to cope with the challenges of a
changing climate. The International Livestock Research Institute
(ILRI) in Kenya had begun a project to determine the impact of
climate change on rangelands, crops and livestock in Kenya so
as to determine future vulnerabilities amongst agro-pastoral populations.
Improving the use of climate information, including seasonal climate
forecasts and early warning systems, could ensure timely responses
now which might safeguard against future impacts.
41. We saw evidence of the many ways in which a changing
climate is already altering the lives of poor people and their
prospects for the future when we were in Kenya and Tanzania. For
example we heard of the movement of malarial mosquitoes to higher
altitudes and changing precipitation patterns. However in neither
country is climate change a prime focus for DFID. Nor was it apparent
that climate change had been fully integrated into either DFID's
programmes or into partner governments' approaches to poverty
reduction.
42. As we have noted, in 2002 our predecessors said
that effective "mainstreaming" of climate change into
development programmes was necessary and that climate change should
not be seen as simply an add-on to existing development programmes.
Others have reinforced this point.[61]
For example IIED commented:
There is a great deal of overlap between the
poorest people living in the poorest countries, and the communities
and countries that are most vulnerable to climate change. Thus
it is advisable to link the poverty eradication agenda with adaptation
to climate change. This means investing in ways to 'mainstream'
adaptation to climate change into regular development (or 'sustainable
development') planning, policies, projects and programmes at country,
region and global levels.[62]
43. "Mainstreaming" has been described
as a socio-institutional process of incorporating the best available
assessments of current vulnerability, trends in climatic hazards
and resources, prospects for future climate change and its impacts
and the range of adaptation strategies and actions into ongoing
policy, strategy and operations.[63]
DFID has told us about its initial work but it is not yet clear
how it intends to learn from the relatively small number of case
studies and projects it has funded to date, or how the lessons
learned will be disseminated throughout its operations and to
its development partners. 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.
44. DFID is funding a five-year programme in Africa
to help African researchers and policy-makers identify practical
ways in which rural and urban populations can respond to climate
change. This £24 million Climate Change Adaptation in Africa
(CCAA) programme is a valuable contribution to assisting the development
of local knowledge and capacity. DFID has also supported development
of the African Climate Policy Centre and the Climate for Development
in Africa Programme, set to get underway soon. It has also taken
an early lead in supporting the development of the World Bank's
Climate Investment Fund. It co-manages the Pilot Programme for
Climate Resilience (PPCR) with DECC and the World Bank, an ambitious
initiative to demonstrate climate resilience in five to ten highly
vulnerable countries.[64]
It is intended that the lessons learned should guide future investments
and inform the operation of international funds for adaptation.
45. Although support from the developed world is
vital, ultimately responses to climate change are the concern
and responsibility of the vulnerable populations themselves. Priorities
for international action therefore need to be carefully worked
out with developing countries. In Kenya we learned of efforts
by civil society organisations to incorporate climate change and
sustainable development into their work and link their activities
with those of parliamentarians. A working group had been established,
funded by the Association of European Parliamentarian for Africa
(AWEPA), which was attempting to have a Climate Change Bill introduced
into parliament. The Bill was intended to raise awareness of climate
change issues in Kenya. Many Least Developed Countries now have
National Adaptation Programmes of Action (NAPAs) which set out
preliminary plans for priority adaptation actions. DFID has helped
in the development of some of these although very few have been
accompanied by funding.[65]
46. Sustaining national and multi-stakeholder dialogues
and initiatives can be difficult. However reaching successful
outcomes in development programmes and international strategies
will require coordination between donors and international agencies,
support in the key ministries—for example economic planning
and environment—as well as engagement with civil society.
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.
Economic growth and natural resource
management
48. Simon Anderson of IIED told us that "it
is not sufficient to say that good development will solve adaptation
needs".[66] Whilst
we agree that specific climate change measures are urgently needed,
the promotion of secure livelihoods through economic growth remains
a good basis for responding to climate change if we accept the
definition of adaptation as "development in a more hostile
climate".
49. In the arid lands in Kenya, populated largely
by pastoralists, the climate was a key determinant of development
options. We saw projects aimed at supporting livelihoods in a
region faced with unpredictable and changing rainfall patterns.
These included restoring wells, propagating seedlings, providing
advice on suitable crops and livestock, and irrigating farmland.
In Tanzania we discussed ways in which economic growth strategies
might take account of the natural resource base on which people's
lives depended. We visited the coastal area of Kilwa and talked
with local fishermen about the damage to their livelihoods caused
by over-exploitation of stock and dynamite fishing, often carried
out by those living outside the area. WWF was engaged in a project
to involve local communities in ensuring marine resources were
conserved while promoting more secure livelihoods. We talked with
local people who depended for their livelihoods on forests whose
sustainability was threatened by illegal logging. We were told
that water resources, biodiversity, forests and agriculture faced
significant pressures from current and future climate change.
DFID is no longer directly involved in the fisheries or forestry
sectors in Kenya or Tanzania although it was funding a number
of the small-scale projects which we saw.
50. Better natural resource management is the foundation
for much of climate adaptation. We reviewed water management most
recently in our Report on Sanitation and Water. We noted
that in Africa only 3% of renewable water resources are managed,
compared to 40% in Asia.[67]
In Kenya we learned that the country generally received overall
levels of rainfall which could be sufficient to meet its needs
if the necessary infrastructure was put in place to distribute
it from wetter areas to water-stressed ones. DFID is now committed
to integrating climate change into its work on water resources
management.[68] However
WWF and others pointed out that the value of natural resources
is not taken into account in many donor projects.[69]
Tearfund told us:
DFID does need to take a sustainable resource
management approach, so not looking at resources as prospects
for exploitation but as something to be sustained and managed;
and I think there should be increased community engagement. You
develop better and more environmentally robust approaches when
you have full community engagement on the projects' work.[70]
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.
Funding adaptation
52. A major issue on which the success of the Copenhagen
meeting will be judged by developing countries is whether commitments
are given for additional finance by rich countries to meet the
costs of climate change adaptation in poor countries. This is
based on the premise that adaptation represents an imposed cost
which developing countries would not have encountered had it not
been for the historical and present emissions from developed countries.
53. Estimating the costs of climate change and adaptation
and the subsequent benefits in avoided impacts is highly uncertain.
Moreover different studies use different approaches which produce
different results. Current estimates of the costs of adaptation
range from US$4 to 37 billion annually from 2008 in the Stern
Review to US$86 billion annually from 2015 estimated by UNDP.
A group of 50 African states has recently put forward a figure
of US$67 billion a year by 2020 to meet adaptation needs.[71]
54. Whatever estimate is used it is clear that very
large sums will be needed for adaptation. Finance for this will
come from a range of sources. It is likely that a large part of
the costs of climate impacts and adaptation will be borne by individuals
and households, by private companies and local organisations.
Funding from multilateral agencies will also play a significant
role. There are currently four main multilateral funding mechanisms
for adaptation, three of which were established under the UNFCCC:
- the Least Developed Countries
Fund (LDCF)
- the Special Climate Change Fund (SCCF)
- The Global Environment Facility (GEF) Trust Fund's
Strategic Priority for Adaptation (SPA)
The LDCF, SCCF and SPA Trust Fund are all based on
voluntary pledges and contributions from donors. All three are
managed by the World Bank's Global Environmental Facility (GEF),
the primary operating entity of the UNFCCC to date.[72]
A further funding instrument, the Adaptation Fund, came out of
the Kyoto Protocol and is funded by a 2% levy on the Clean Development
Mechanism (CDM) (see Chapter 5).
55. Multilateral funds as currently established are
highly unlikely to be able to meet the costs of adaptation. Even
where funding has been pledged, receipt and disbursal rates have
been slow. Norwegian Church Aid found that US$133 million has
been received by the UNFCCC and only US$32 million disbursed,
against a total pledge of US$283 million.[73]
IIED notes that Africa has benefited least from adaptation funding
so far.[74] A recent
calculation of UNFCCC, multilateral and bilateral funds for adaptation
showed over US$3 billion in pledged funds but less than US$300
million actually spent.[75]
56. Lord Stern suggested that
donor aid should increase to 1% of GDP to help pay for adaptation.[76]
However there is as yet no indication that donors are willing
to make this increased commitment. As our recent report on Aid
Under Pressure made clear, many donors are failing to make
progress towards the existing commitment to spend 0.7% of Gross
National Income on development assistance by 2015.[77]
The recent G20 summit, which achieved significant uplifts in the
funding available for the international financial institutions,
did not give much attention to climate change, preferring to leave
any major decisions until the Copenhagen conference in December.[78]
ADDITIONALITY
57. WWF has emphasised that funding for adaptation
needs to be additional to existing aid commitments and has criticised
DFID's approach to this:
DFID needs to adopt a position on the nature
of financing for climate change adaptation which is firmly rooted
in the principle that the polluter pays. Initial trends indicate
that some high-income countries are using already pledged Official
Development Assistance (ODA) finance for the purpose of climate
change financing. The UK was one of the first countries to do
this even though it claims that the climate financing is additional.
The financing was only additional to the ODA already budgeted
in the Comprehensive Spending Review of 2008-11, but will still
be counted towards the commitment to give 0.7% of GNP as ODA,
in effect displacing mainstream development financing. Other countries
see adaptation funding clearly as additional to their 0.7% ODA
targets. The Dutch Development Minister Bert Koenders said at
a joint event with DFID last year: "There is no time left.
We have to be crystal clear. Adaptation costs should be additional
on the basis of the principle the polluter pays."[79]
58. The Minister stressed the difficulty of separating
climate change funding from development assistance when DFID was
implementing integrated projects designed to assist adaptation
at the same time as contributing to poverty reduction. He gave
the example of DFID's work in villages in Bangladesh where homes
were being raised to protect them against flooding and where villagers
were also being given livelihoods assistance as part of the same
project. He said that it was difficult to "separate out what
is the benefit of the projects for the individuals concerned that
is just climate-related."[80]
59. We acknowledge the difficulties in distinguishing
between funding provided specifically for climate change measures
and that which is given for development assistance.[81]
DFID officials told us in July 2008 that: "There is no official
policy yet as to whether in the long run we will count environmental
expenditures as Official Development Assistance, and that is actually
being considered by ministers at this time."[82]
In April 2009 the Minister told us that the Government was still
considering its response.[83]
The OECD Development Assistance Committee (DAC) is responsible
for defining what donors can count as official development assistance
(ODA). The view of the DAC Chairman was that funding for developing
countries which was not directly aimed at poverty reduction, including
for climate change projects, should be additional to ODA.[84]
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.
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.
Administration and use of adaptation
funding
62. Concern was expressed to us about whether existing
climate adaptation funds are being used effectively. Some developing
countries have highlighted the difficulty of accessing adaptation
funds, in particular those managed by the Global Environment Facility
(GEF) which carries a high burden of reporting and co-financing.[85]
The World Development Movement reported that the G77 and China
have stated that funds for mitigation and adaptation in developing
countries should not have to go through the World Bank as this
is a body "dominated by rich countries". They would
prefer funds to be administered by the UNFCCC. [86]
Christian Aid also expressed doubt about the World Bank taking
the lead in administering adaptation funds, citing its poor record
on environmental management and community involvement in projects.[87]
In our 2008 Report on DFID and the World Bank, whilst accepting
that the Bank should integrate action on climate change into its
overall programme of work, we cautioned against it becoming a
"bank for the environment" as we believed this risked
compromising its overriding poverty reduction objectives.[88]
63. Most of the UK's pledged funding for adaptation
to date will come from the Environmental Transformation Fund (ETF).
£800 million has been allocated from the ETF to the Climate
Investment Funds (CIF) managed by the World Bank. This is significantly
more than the UK contribution to the UNFCCC funds (£18.5
million). Christian Aid told us that it was concerned that DFID
would not be able to monitor the allocation of funds properly
under the CIF since it would not have a direct role in determining
which projects received funding. Some countries, notably the Netherlands,
had overcome this problem by ring-fencing their finance for specific
types of projects but DFID had not pursued this option.[89]
64. DFID assured us that rigorous mechanisms were
in place within Government to oversee the UK's contribution to
the World Bank's Climate Investment Funds. A board of representatives
of the key departments for the ETF had been established, which
monitored and evaluated projects and took decisions on whether
funding allocations should be in the form of grants or loans.
Ministers made decisions on "top level strategic ambitions
and objectives and on financing allocations". The day-to-day
administration was carried out within a DFID secretariat which
reported to the ETF board.[90]
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.
66. A major milestone in achieving effective funding
for adaptation would be the establishment of mechanisms to ensure
that funds reach the people who need them most. Large amounts
of development funding go through partner country governments.
National finance ministries are then responsible for their allocation
to target populations, sectors and regions. There are risks that
funding intended for adaptation could end up in the wrong place
and equally, if there is a shortfall, that funds intended for
health care end up protecting forests for example.
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.
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