Examination of Witness (Questions 40-59)
MR ALEX
COBHAM, MS
SARA SHAW
AND MR
TIM JONES
27 JANUARY 2009
Q40 Andrew Stunell: Do you see any
particular reason why DFID is resisting that approach? Is there
some practical constraint that they have put to you?
Mr Cobham: It is not entirely
clear. Certainly DFID are more optimistic than we are about the
ability of the World Bank to turn itself into a green bank—this
is the line. What we have not had from them is any indication
of the way in which they would hold the Bank to account or measure
if they have a problem with the Bank, or steps they might take
if they felt that that was not happening.
Q41 Chairman: This Committee did
put a marker down when we did our World Bank report[5]
that whilst that we were not against the World Bank obviously
helping to deal with climate change issues, we were concerned
about the re-prioritising of pro-poor, poverty reduction work
with climate change and confusing it. So we have actually made
that point.
Mr Cobham: Related to that perhaps
is that the money that DFID has funnelled through the World Bank
has been classed as ODA so it contributes to the 0.7 % gross national
income target. If it was to go through a different channel then
arguably—and certainly the statements from Bali have been
that—adaptation money should be entirely separate from aid
and that is certainly our view. So it might therefore make it
more difficult for DFID trying to meet these two targets of providing
adaptation funding and reaching the 0.7 %. I would like to think
that that has not been a part of their decision.
Q42 Andrew Stunell: If I just go
on a little bit more, clearly DFID is focusing on economic growth
as a way of relieving poverty in particular. How can that best
be linked to getting sustainable development in the environmental
sense?
Mr Cobham: I think there is a
real danger and the paper Getting Growth Right,[6]
that I think the Committee has seen, highlights some of those
issues. If DFID continues with what appears broadly to be a two-track
effort where they see economic growth and sustainable development
as twin goals then the chances of being successful in either in
a sustained way are greatly reduced. The example given in the
paper is we know that growth is very useful—or can be very
useful in delivering poverty reduction or at least some aspects
of particularly income poverty reduction. However if we decide
that growth is therefore worthy of being the goal and we try to
maximise it, inevitably this leads to a smaller developmental
impact than we could have had if we had tried to maximise the
thing that we call development, even though it is more complex
and this is a bit harder to do. It is like a business deciding
that research and development is associated with higher profits
and therefore instead of maximising profits choosing to maximise
its R & D budget—you end up with a very high R &
D budget but you do not necessarily get a lot of profit. In this
case DFID may be pushing short term growth without actually the
developmental benefits that we would like to see. For the climate
change work I think that the risk is very clear. We know that
growth has not delivered the kind of development benefits that
we would like to have seen. Every $100 of growth in per capita
income between 1990 and 2001 only contributed 60 cents to raising
people above the dollar a day poverty line, so most of that growth
did not go into addressing the most extreme forms of income poverty.
If we are only able to use growth with that level of inefficiency
then we know at the same time that in a sense our growth needs
to be limited by our response to climate change. The ability of
DFID or of any donor, but of the world in general to achieve development
without breaching the climate tipping point is out the window
or it is up in smoke I think is the expression. So we need to
get more efficient about the way that we use growth to generate
development but also the efficiency with which we create growth
and the climate impact of that growth we are producing. If DFID
continues to see these as separate lines rather than taking the
holistic approach to them the prospects for them are not good.
Q43 Andrew Stunell: I read New Internationalist
as well and there is lots of stuff which is ideally a good idea
but could you just suggest a delivery mechanism? Is there a model
that gets that more efficient delivery to which you have just
referred because I would be very interested to hear what you believe
it is?
Mr Cobham: I think there are certainly
some basic elements in DFID's approach that could be changed for
the better fairly straightforwardly. A clear example is the International
Growth Centre that DFID is now funding, which we certainly welcome,
where they are funding an international network of academics and
other researchers effectively to work as a resource for developing
countries to come to and say, "This is the problem we have
with growth, can you help us?" But the framing of that is
such that countries are, in effect, only able to ask, "How
do we get more growth?" and not "How do we ensure that
the growth we are getting is better for development, is cleaner?"
So even in terms of very basic structural issues like that DFID
appear to be embedding more and more this distinction between
the economic development and the broader approach. I think a lot
of ways into that problem are in terms of how DFID works internally
as well. But although that argument is slightly abstract about
the holistic approach I do not think it is beyond the wit of DFID
to find concrete ways of that sort in which to make sure that
they are targeting a sustainable development goal rather than
growth.
Q44 Andrew Stunell: So you believe
that there is an alternative model in existence which would deliver
this extra value if DFID adopted it?
Mr Cobham: Within the academic
debate on this certainly there is a division between the growth
diagnostics approach that looks at the bottlenecks to growth and
goes forward to policy solutions on that basis, and the more complex,
the arguably more difficult but ultimately more valuable than
development diagnostics approach which defines the more complex
goal and then looks for the bottlenecks to that and sees growth
as having a role to deliver within that rather than being a separate
goal that we pursue elsewhere.
Andrew Stunell: I think I might like
to see a piece of paper with that written down.
Q45 Chairman: In the criticisms that
you made of DFID do you think the creation of the new Department
of Energy and Climate Change might help improve coherence? We
have a new Department of Energy and Climate Change; should that
improve the coherence and, if so, how should it interact in your
view with DFID?
Ms Shaw: I think it should improve
the coherence; it should improve the coherence generally across
government by putting the energy inside the climate change, but
I think it really depends on whether energy leads the climate
change or the climate change leads the energy because if you look
at an energy and an energy security based approach then you potentially
squeeze climate change out. If you are looking at climate change
imperatives and having to cut emissions, have sustainable development
paths and the energy flows out of that then that is what I would
suggest is the better and the right way to do that and I think
that is what our hopes are of having that department which brings
those two areas together. It remains to be seen which is driving
which in reality.
Mr Jones: We welcomed the creation
of the new department which centralises climate change as the
key objective. For DFID from the perspective I have it appears
that DFID generally see their role on climate change as adaptation
and they do not see that they have a role in mitigation. We would
argue that DFID needs to broaden their remit. If you look at the
2006 White Paper there is a whole chapter on climate change but
nowhere does it refer to the need to cut emissions in the rich
world. If we are going to tackle climate change we know that we
need adaptation efforts because of what we have already caused
but we have to mitigate or adaptation will ultimately become useless.
Q46 Chairman: Just on that point,
that is not an unreasonable position, is it, for DFID to take?
They have a budget to spend in poor countries in reducing poverty.
Of course it might help them if they are developing energy to
help them to develop benign energy, but a lot of it is bound to
focus on adaptation. Their argument would be that, "As long
as the Government is arguing the case strenuously that we should
be doing all we can to reduce the emissions then our job as a
development department is then on the ground to deliver development
policies that are most appropriate to that." Or, if you do
not agree with that what do you actually think they should be
doing?
Mr Jones: First you said then
that if the Government is doing all it can—which is a very
questionable thing to start with—but secondly if you actually
look at how we are intending to mitigate in the UK and Europe
the key part of it is the Clean Development Mechanism. So in the
European climate and energy package that was agreed in December,
if you look through the whole of the package, at both what is
happening with the Emissions Trading Scheme and what is happening
with the non-trading sectors, around between 50 and 66 % of our
targeted reductions in emissions will take place through buying
carbon credits from developing countries rather than actually
cutting emissions in the UK and Europe. There are two key perspectives
that DFID could bring to that policy. The UK Government was arguing
for us to be able to meet our target using 50 % carbon credits
and there are two perspectives. One, that this is not going to
tackle climate change because if you look at climate change from
a justice perspective and what actually has to happen we in the
UK, we have to do it domestically, we have to show a low carbon
economy as possible; we have to show that we can meet people's
needs whilst tackling climate change otherwise you are not going
to take other countries around the world with you. In addition,
we have to provide all the finance, the low carbon development
needed for poorer countries. The second reason is that the Clean
Development Mechanism then works in developing countries entirely
outside any accountability to views of development. So you have
had lots of projects that have been funded such as coal power
stations, refrigeration plants, waste tips, which have had lots
of local negative impacts on people—and we shared some of
those in our submission and could share more with the Committee.
The scheme now exists outside any reference to development—it
is a means to offset emissions from the western world.
Q47 Chairman: I understand where
you are coming from. If we take the Bangladesh example that you
have given, as I understand it, having looked at the brief from
the exchange, DFID is doing quite a lot, admittedly on mitigation
in Bangladesh and trying to address climate change, and to that
end looking at lifting homesteads out of the water and putting
houses on stilts—things that I would term as climate proofing
presumably, but you are saying that the British Government is
engaged in trying to lobby for this open-cast coalmine. What I
am not clear about, just as a matter of practical information,
is this coalmine actually going to be developed anyway? You quoted
the Bangladeshi Government. Presumably what you are saying is
that if DFID is so engaged in climate change issues in Bangladesh
they ought to be saying to the British Government, "It is
quite inappropriate for you and other departments"—BERR,
FCO and what have you—"to be supporting a project which
is unsustainable and contrary to any climate change policy."
Mr Jones: It some ways I would
say this sits out of climate change and it is more about sustainable
development. So this mine is proposed by the UK company; it does
not exist and would not happen if the UK company were not pushing
for it. Previously larger mining companies have looked at it and
decided that it is not a viable project because it would have
such negative local impacts. The British High Commission has been
lobbying for it to happen with the Bangladesh Government and obviously
the British High Commission in Bangladesh is a very powerful body
given the amount of aid we give, and the reason why—it is
not clear that DFID have had any role in this—
Q48 Chairman: The impression I get
is that it had none and I would be surprised if they had.
Mr Jones: The question is why
is the British High Commission then lobbying for this kind of
project, which would have massive implications for between 40,000
and 120,000 people being moved, thousands of hectares of land
having to be de-watered, and DFID does not have a role in it and
it is just UK Trade and Investment—"It is a British
company, we will lobby on behalf of them"—and there
is no reference to whether DFID should be looking at this. The
case is highlighted because Gareth Thomas is the minister responsible
in the Department for Business but also as we know he is also
a minister in the Department for International Development, but
that half of him does not seem to be able to have any say on this
project.
Q49 Chairman: It is clear where you
are coming from. That is an area for debate about how the departments
work.
Mr Jones: To make clear, this
is not related to the Clean Development Mechanism and it is not
really about climate change. The reasons for the mine being such
a problem are not to do with climate change.
Q50 Chairman: You have explained
how DECC might help; you have explained how DFID should assert
itself more where there is a conflict. Are there any other ways
you think that it is possible that crossdepartmental working could
be improved?
Ms Shaw: Around climate change
I think it is very important that the Treasury is involved, particularly
as we go into this year of negotiations. There are a lot of decisions
to be made around financing and I think we can see some real blockages
if there is not cross-Whitehall cooperation that involves the
Treasury, that involves Number 10 as well as DFID and DECC because
I think certainly one of the things that you see when you go to
the negotiations is that there are limits to what those different
parts of government can actually negotiate when they do not always
have the purse strings, and that can be a problem. My understanding
is that there is greater Whitehall cooperation happening around
the international negotiations but I do not think it is perhaps
as full as it could be.
Q51 Mr Hendrick: I can see from the
discussion that there are obviously lots of different alternatives
in terms of the way that government departments could organise
themselves and obviously to some degree I think the panel have
been supportive of the changes that have taken place in terms
of energy and environment. Can I ask, rather than just being critical
of the changes that have been made and how those departments are
working together at the moment, could you be a bit more prescriptive
about how you would see a better or ideal organisation of departments
to meet the needs that you are putting forward?
Ms Shaw: I do not think we have
actually thought about particular institutional reform of UK government
departments. We did broadly welcome the changes made to the Department
of Energy and Climate Change and we do recognise that DECC does
work with other departments. I think it is very difficult; the
Treasury is the Department that generally deals with a lot of
revenue and I am not sure how you reorganise that. I do not know
if anyone has any other insights on that.
Mr Jones: It is not a re-organisation
that is needed, it is changing of policy that the Treasury does
actually make the money available; so that the Treasury does give
DECC the resources it needs to drive decarbonisation in the UK;
that it does support proposals put forward for generating the
reliable funds needed for mitigation and adaptation in the global
south.
Q52 Chairman: I accept the point
that Mark is making, just in view of practicalities, and you have
given examples. If you have the very poorest countries where Britain's
engagement frontline is on development—and indeed we have
been there where the High Commissioner will say, "I may be
the chief man here but actually everybody wants to the man from
DFID because that is actually why I am here or why we are here."
What you are really saying is that in that context Government
ought to be saying that DFID should have a defining say on the
Government's engagement in those very poor countries and it does
not.
Ms Shaw: I am not sure 100 % if
that is what we are saying. I think a lot of the areas around
financing for adaptation internationally are actually around making
sure that those flows of financing are not constrained by—
Q53 Mr Hendrick: You are saying it
should be Treasury led now; earlier you were saying that you felt
this should be climate change led and now you are saying it should
be Treasury led.
Ms Shaw: No, I am not saying that
at all. I think you are misunderstanding what I am saying. My
area of expertise is around the international negotiations and
around financing for climate change, which is taking place through
those. What we are seeing is that the EU is finding it quite difficult
to agree a position on some of the big proposals around generating
large scale sums of financing, into the billions, for adaptation,
which is what everyone agrees is required. Because Treasury are
not keen for those sums of monies to bypass them you need a system
that actually allows that money not to get caught up in domestic
revenue issues.
Q54 Mr Hendrick: You are describing
the problem though.
Ms Shaw: Yes.
Mr Hendrick: What is your solution?
Q55 Chairman: You are going to say
you do not have one yet. I am going to bring Marsha in because
Marsha's line of questioning deals with this.
Ms Shaw: I would not mind coming
back on that.
Chairman: I am going to bring in Marsha
Singh because he has a line of questioning.
Q56 Mr Singh: We are straight into
funding for adaptation which is exactly what I want to ask. There
is a huge variation in estimates for what is required and am I
right in saying that adaptation funding will go through the Global
Environmental Facility?
Ms Shaw: Some of it does currently;
it will not necessarily in the future. There are some issues around
adaptation financing as to how you generate it, what institutional
arrangements you have for it and then how that money is then dispersed.
Currently at least two if not three of the funds that are under
the United Nations system are managed by the Global Environmental
Facility. It would not have to be the Global Environmental Facility
in the future that dealt with funds.
Q57 Mr Singh: Is there something
else in mind?
Ms Shaw: It is actually one of
the big issues that does slow things down internationally is what
kind of institution or architecture you develop because developed
countries have shown a preference for the World Bank and some
of the big development banks and developing countries are very
reticent because they find it hard to get access to the funding;
there is not too much community engagement. So I think we are
potentially looking at something of a stand-off and there is very
little thinking of what you have as an alternative. Do you reform
the World Bank to make it better, to make it do its job better
and to make it more acceptable to developing countries? Do you
use some of the existing UN bodies like the Global Environmental
Facility, which again is not that popular with developing countries?
Q58 Mr Singh: What about Regional
Development Banks?
Ms Shaw: I think that is another
alternative. That is something certainly that DFID has said, because
it does not have to be the World Bank, it could be from other
Development Banks.
Q59 Mr Singh: Because within localities
they are happier with the Regional Development Banks than they
are with the World Bank.
Ms Shaw: What is coming from developing
countries particularly is quite a desire for a whole new set of
architecture. We probably all have quite mixed views on that,
whether you want to develop a whole new structure and infrastructure
or whether you try and work with what is there. This is an area
where I think there needs to be a lot of work done relatively
quickly in order to progress things to Copenhagen.
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Christian Aid Briefing Paper, 2008. Back
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