Examination of Witnesses (Questions 223-239)
MR MICHAEL
FOSTER MP, MR
ELWYN GRAINGER-JONES,
LORD HUNT
OF KINGS
HEATH AND
MR ANDREW
RANDALL
29 APRIL 2009
Q223 Chairman: Can I say good morning,
Ministers, to you and your advisers. For the record would you
please introduce yourselves and your team?
Mr Foster: On my left is Elwyn
Grainger-Jones, who is the Head of Climate and Environment Group
at DFID.
Lord Hunt of Kings Heath: Can
I introduce Mr Andrew Randall, Advisor on International Issues
at Defra. May I, Chairman, just apologise that I have been asked
to go a meeting of COBRA this morning at 11 o'clock and will therefore
be leaving this hearing early. I will ensure that any questions
that come under my responsibility we will follow up immediately.
Q224 Chairman: Thank you for that.
We have tried to re-jig the questions so that we can ask them
while you are here but we quite understand, Minister. Having said
that, some of our colleagues indicated they were on their way.
This meeting has changed in time and I hope they will join us
but the meeting is quorate which is the important thing. You will
know that we decided to do this inquiry to determine the extent
to which climate change was being embedded and mainstreamed within
the development strategy and our predecessors carried out a pretty
full report on climate change in 2002. Obviously, things have
moved on quite a bit from there. At that time, DFID said its aim
was to mainstream climate change into its programmes, so I wonder,
Mr Foster, to what extent you have made progress in doing that
in terms of country programmes. Certainly, when we go to developing
countries I have to say we do not automatically get a climate
change statement from DFID and I wonder whether perhaps we should.
Could you explain how you feel it has been integrated?
Mr Foster: Thank you, Chairman.
One of the key measures of success for us is that we do not have
a project-based approach to climate change within developing countries
because we think it should be integrated into the mainstream.
An example of how we do it in our normal country plans, which,
of course, you and the Committee will be familiar with, is that,
if we take somewhere like Bangladesh, we have a programme there
called the Chars Livelihood Programme where, built into the policy
to bring adaptation to the impact of flooding in Bangladesh, which
is an impact of climate change, is a way in which the villagers
have had the floors of their homes raised. In addition to that
they are given access to a cow that is in calf, seed to grow produce
for themselves and for marketing, and it is all wrapped up in
one project so the people in the villages in the Chars area of
Bangladesh get the benefit of having their homes protected from
flooding and at the same time they have their livelihoods improved.
Q225 Chairman: I saw that case study
and obviously it was an interesting one and I can see the practical
benefits of it, but the question arises, particularly the bit
about raising homes, as to whether that is climate change money
or poverty reduction money and how you separate them out. A point
of concern you will appreciate the Committee has is that, as climate
change is integrated, does it compromise poverty, reduction in
terms of the allocation of funds? I appreciate they need to go
together but we need to determine which is proper funding for
poverty reduction and which is additional funding specifically
to do with climate change.
Mr Foster: The difficulty with
this, I would suggest, Chairman, is that it is very difficult
to separate out what is the benefit of the projects for the individuals
concerned that is just climate related. In preventing people from
being flooded we are helping improve their livelihoods and dealing
at the same time with health and education issues within this
particular project, and it is a way in which we think we win as
a Department in literally having the two very tightly integrated.
If we were to try and separate out the funding schemes for one
or the other I think we would lose the benefit of the whole approach.
Q226 Chairman: We might want to explore
that a little further in other questions. You mentioned Bangladesh.
In Africa, in the specific country assistance programmes, and
obviously there are big climate change implications there, how
do you build those into the programmes specifically in African
countries?
Mr Foster: In terms of the process
that we would typically follow, Chairman, one of the approaches
we have is an environmental screening process for any project
over a million pounds so that you automatically consider what
the impact is in terms of the environment and address the opportunities
that can exist to improve the position of those that are affected,
but also to identify the risks that climate change poses when
we deliver a project there. Also, in terms of conversations that
we have with developing countries, we look on a country-by-country
basis to assess what the risks and opportunities are for particular
projects. Examples of conversations that we would have would be
in Nepal where there is huge potential for hydro-electricity production
which can deal with the country's own need for electricity and
power. About a third of the country has access to electricity
so there is real need there. Only 1 % of the potential is used
at the moment in terms of the waters flowing from the Himalayan
region, but also it is a way in which the country can sell its
energy to its neighbours, namely, India, whose energy demands
are well known. It is a conversation we have with them and with
our multilateral partners, like the Asian Development Bank and
the World Bank, in terms of how we can get the country itself
to recognise what its opportunities are to deal with climate change
and also with the development benefits that can accrue from good
forward-thinking policies.
Q227 Chairman: You have set up the
Climate and Environment Group as a policy and research division
here in London. How is that interacting specifically in the way
country programmes operate? How will it influence the climate
change agenda in country programmes because the reality of the
country programmes, is it not, is about seeing the follow-through?
Mr Foster: First, on the Centre
for Climate Development, we envisage the network being operational
from late summer. In terms of how we anticipate the Centre is
going to be used, it will be to provide knowledge, to advise developing
countries on the services that are available and also to generate
new priorities for research. We have had some welcome comments
from developing countries about potential involvement that they
want to have with the Centre. On other aspects of research, what
we have also done internally is restructure our Research Department
so that we have got research people sat with policy experts in
the Department so that there is face-to-face contact between those
who are researching on issues such as climate change and those
who are dealing with policy on that. We have maintained the integrity
of the research and the independence that researchers want but,
rather than just exchanging communications by email, they can
sit together and have discussions about how to inform policy based
on the latest research.
Q228 Richard Burden: I am getting
a little confused about who is doing what. That is very helpful,
what you said about creating a new Centre which is being set up
this summer. However, I am not clear what its role is, how it
is meant to relate to things like the Climate and Environment
Group (CEG) that the Chairman mentioned, and also how that centre,
as it does get under way, is going to make sure that its priorities
reflect the priorities of developing countries. Perhaps you could
say just a little bit more about how the bits link together.
Mr Foster: I will ask Elwyn to
come in with the detail on that.
Mr Grainger-Jones: We see the
centre as both a service to our clients and essentially a coalition
of thinking organisations that we can interact with in order to
improve our ability to work on climate change with our clients
too. There is a knowledge management role where at the moment
there is quite a wide array of specialist organisations and think-tanks
thinking about certain aspects of climate change but very few
that really bring it all together in organisations that span not
just northern organisations but also organisations in the south.
We see a knowledge management role, a role providing advisory
services to developing country governments, which I think is a
service that we would like to outsource. We do not have the capacity
ourselves to directly provide all of that advice. We want to strengthen
the international system's ability to provide advice and also
to generate new priority research and analysis. We have a significantly
expanding research programme. It requires a great deal of effort
to scale that up adequately, so we see it providing all these
services. We see it being a consortium approach linking the north
and the south, and in terms of CEG's interaction, we would like
to have a very close interaction with that unit. We want to have
a close policy dialogue. There are many areas where the policy
is still unfolding, where we need more interaction with outside
organisations which can see all the links that are involved in
climate change, and that is the sort of dialogue we would want
with this organisation. We would not see it doing all the things
that climate and environment would do. We see it as an advisory
and knowledge hub, something that we would draw on.
Q229 Richard Burden: Is it going
to be independent of DFID or is it going to be part of DFID?
Mr Grainger-Jones: It would not
be a department of DFID, no. It would essentially be a contractual
arrangement where we would tender for a number of organisations
to come together and provide certain services. We would not be
dictating the line they would take. We would not want to suffocate
them and say they had to pursue certain lines. That is not what
we need from this. We need challenging ideas, we need in a sense
a really healthy interaction of ideas with this group of people.
There would be at the centre a management oversight arrangement
where ourselves and other donors would interact as providers of
finance with the body to look at whether the outputs we have set
out are being achieved.
Q230 Richard Burden: So in terms
of setting it up, its remit, the specs on which you are inviting
tenders and so on, what involvement has anybody else had in that?
Have developing countries had any input into what its remit should
be and its relationship with government departments?
Mr Foster: To give you examples
of the countries which were partners in the consortium expressing
an interest in the climate network, I could run through a few
to give you a flavour of the interest on that—the Caribbean
as a region, Brazil, Mexico, Costa Rica, Guatemala, South Africa,
Nigeria, Rwanda, Senegal, Tunisia, Kenya, Ghana, Egypt, China,
India, the Philippines, Sri Lanka, Fiji and Malaysia. There is
a lot of country interest expressed in the consortium trying to
run the whole operation.
Q231 Hugh Bayley: Which Government
Department takes the lead on international climate change policy?
Lord Hunt of Kings Heath: Essentially,
it is the responsibility of the Department of Energy and Climate
Change to lead in terms of international negotiations and also
to be responsible in the UK for climate change mitigation. My
other department, Defra, is responsible for climate change adaptation
and also sustainable development. Of course, we work very closely
with DFID and Whitehall policy on international climate change
is co-ordinated through the International Climate Change and Energy
Programme, so there is a lot of cross-government working on this.
Q232 Hugh Bayley: Michael, DFID is
an implementation agency in developing countries for UK Government
policies. What difference has DECC made to the way DFID pursues
its climate change policies?
Mr Foster: We do not see DFID's
role as an implementation agent for Whitehall policy on this.
We engage fully with the discussions that go on. Obviously, we
are looking at the development angle in the climate change discussion.
Importantly, we are feeding in the development priorities for
future international agreements such as Copenhagen, and our Secretary
of State has laid out some very clear development targets, if
you like, that can be gained from a positive settlement in Copenhagen.
That is where our responsibility lies and, of course, the Secretary
of State for DFID will be present at the discussions at Copenhagen.
Q233 Hugh Bayley: So the Department's
role is to ensure that UK policy for international climate change
takes proper account of the development dimension? If I could
turn to Philip, does your Department have a responsibility through
intergovernmental working to ensure that DFID's development policies
are compatible with the Government's international climate change
policies and objectives?
Lord Hunt of Kings Heath: I am
not sure that is how I would put it. As I say, the essential components
of climate change internationally are DECC leading international
negotiations. As far as adaptation is concerned, in the UK Defra
leads on adaptation. Internationally it is DFID which leads on
adaptation.[1]
Q234 Hugh Bayley: And internationally
on mitigation?
Lord Hunt of Kings Heath: On adaptation.
Q235 Hugh Bayley: No, internationally
on mitigation in terms of outside of the negotiations. DFID will
develop policy frameworks in its work with governments, particularly
where it is giving programmes support for direct to a government,
and that will provide opportunities, will it not, to shape or
influence, or at least propose, ideas to Tanzania, shall we say,
about what its mitigation policies might be as well as its adaptation
policies? Tanzania is possibly not the best example because it
is not such a high carbon emitter.
Lord Hunt of Kings Heath: One
has to say that in the six months that DECC has been established
our key focus has been on first of all seeing the Climate Change
Act through with the industry targets for the UK in the development
of carbon budgets, then the 2020 agreement in Europe on 20 % GHG[2]
reduction by 2020, 30 % which would be an international agreement,
and then into the negotiations leading up to Copenhagen. That
really has been the focus of our engagement. My colleagues in
DECC have spent a considerable time visiting other countries where
the focus has really been about Copenhagen and seeking to get
to a successful conclusion. My experience and understanding is
that when it comes to working with DFID there is a very close
working relationship and I would not see it in the way you described
in your first question as a monitoring role by DECC as far as
DFID is concerned but as a very close working together.
Q236 Hugh Bayley: To take a practical
example, the Environmental Transformation Fund's International
Window, which I understand the two Departments jointly are funding
to the tune of £800 million, and it will be providing, I
understand, both grants and loans to countries, how are decisions
made, for instance, on whether an International Window investment
should be a grant or a loan? Which department is running it?
Mr Foster: The ETF is jointly
managed by DFID, DECC and Defra. There is a government board that
oversees the running of it and the Treasury and the FCO are also
there as observers in terms of how this works and perhaps Elwyn
could talk a little bit more about the detail of how the board
operates.
Mr Grainger-Jones: They meet approximately
every two months. Those meetings are very interactive. Essentially
we decide the overall strategy for how we manage these funds.
We decide issues by how we would allocate funds into different
types of activity and how we review progress on the Climate Investment
Fund, the vehicle that we have set up to manage these funds. We
decide details such as what would be our approach to certain technical
issues in those funds, how we approach coal, for example, and
the funds themselves are managed through a governance mechanism
on the Climate Investment Fund. That is pretty innovative, where
we have potentially equal representation in these international
funds, and there was a lot of discussion with NGOs and others
about how this was set up, and those are international discussions,
not just in the UK. Essentially, the ETF governance mechanism
in Whitehall is reviewing how the international process is going.
Q237 Hugh Bayley: As for determining
the UK policy, how does the UK influence the decisions that are
made as to how the funds are used, whether they are, as I say,
grant or loan funding streams, and how would you monitor and evaluate
the outcomes which a fund contributes to?
Mr Grainger-Jones: In terms of
how we would take decisions, the board takes decisions and those
are approved by our ministers in respect of departments, and are
decisions on the top level strategic ambitions and objectives
and on financing allocations. When it comes to the more day-to-day
decisions, for example, if project or programme strategies are
being reviewed, there is a secretariat which is housed in DFID
which advises this ETF board on how to progress what we should
be advising on. Those decisions are discussed in the board. In
terms of things such as grants and loans, again, that is all discussed
in the board. There are certain parameters which guide that, for
example, the way in which the money has been provided to it, its
capital funds that we are spending, but in terms of how they then
translate into how we use the grant elements of these funds, much
of which is going to the forestry area, that is again discussed
at the board. In terms of monitoring and evaluation, there is
quite a lot of work now going into what are the concrete achievements
that we are looking to achieve through the different programmes
that are being set up under the Climate Investment Fund. For example,
we took part in two recent international meetings about how we
would be able to say what success has been achieved on the adaptation
element of these funds, how you decide what is success. You have
a plan first. What sort of plan? What are the success parameters?
What are the projects we are looking for? Similarly on the Clean
Technology Fund, we have been looking at essentially how we would
judge the progress of that. The key thing is that we are looking
to use the monitoring and evaluation systems that governments
have been putting in place with their multilateral partners, not
always necessarily generating new and additional earnings but
we do need to improve the systems in place.
Q238 Richard Burden: Could we spend
a few moments looking at MDG 7 and our performance and our impact
on that? Perhaps, Mike, you could start off and let us know what
impact you think the work of the UK Sustainable Development Commission
has had in practice on DFID's approach to meeting MDG 7 on environmental
sustainability.
Mr Foster: As you know, Mr Burden,
the MDG 7 targets in some areas are on water; they are just about
on track. On others we are off track and we need to accelerate
the progress that we are achieving. Where we have made some specific
progress, if we look at the water resource management side, it
is being delivered through in-country programmes. We have looked
at ways of improving a more regional perspective to water resource
management because of the impact of climate change and the variability
in rainfall. It is likely to cause greater flood potential so
we have invested quite heavily in that side. An example would
be the South Asia Water Initiative which is looking at the flow
of water from the whole Himalaya region affecting all the countries
surrounding that area on the basis of the fact that it is likely
to affect some three-quarters of a billion people. In terms of
our own in-country work, we have been doing that as well. I mentioned
the environmental screening approach that we have and some of
the discussions that we have in-country. In terms of other aspects
of MDG 7, biodiversity is one of those that is a difficult one
to measure and there are challenges there that the international
community has about how we get a proper measure that we can verify
and stand up and be accountable to on issues such as valuing the
loss of and challenges to biodiversity.
Q239 Richard Burden: That is useful.
We may later come back to some of the specific areas of work.
What I am interested in at this stage is how DFID interacts with
the Sustainable Development Commission and whether the Sustainable
Development Strategy that we have across departments has impacted
on DFID's work and, if so, how. If I can put it to you, some would
say not very much. For example, the International Institute for
Environmental Development say that DFID has not really given sufficient
priority to sustainable development and they indicate that DFID
only plays a minor role in the Sustainable Development Commission
as the Government's advisory body. Is that fair, and if it is
not fair how does DFID interact with it, and what has come out
of that? What is it affecting?
Mr Foster: Where that criticism
might well be levelled is that the Sustainable Development Commission
(SDC) is primarily focused on the UK and works within the UK,
so we have a limited amount of engagement because our remit is
the more international perspective as opposed to the SDC which
is pretty much UK limited in terms of its outlook.
1 Lord Hunt meant to say that internationally it is
DFID and DECC that together lead on adaptation. Back
2
Greenhouse Gas Back
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