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CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 177-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE INTERNATIONAL DEVELOPMENT COMMITTEE
SUSTAINABLE DEVELOPMENT IN A CHANGING CLIMATE
Tuesday 27 January 2009 MR SIMON ANDERSON MR ALEX COBHAM, MS SARA SHAW and MR TIM JONES Evidence heard in Public Questions 1 - 79
USE OF THE TRANSCRIPT
Oral Evidence Taken before the International Development Committee on Tuesday 27 January 2009 Members present Malcolm Bruce, Chairman John Battle Mr Mark Hendrick Mr Marsha Singh Andrew Stunell ________________ Memorandum submitted by International Institute for Environment and Development
Examination of Witness Witness: Mr Simon Anderson, Chair, Climate Change, International Institute for Environment and Development, gave evidence. Q1 Chairman: Good morning, Mr Anderson. Thank you for coming in. Perhaps for the record you could introduce yourself. Mr Anderson: I am Simon Anderson. I am Head of the Climate Change Group in the International Institute for Environment and Development. Q2 Chairman: Thank you. You have given us an update on your CV which is helpful. In passing, I notice that you are working with Danida.[1] This Committee had a very good visit to Denmark last year, especially to Danida, who I think have become a very valuable partner - two ways, between the two countries. It is interesting that you are working with them. Indeed, I think they have a number of UK nationals working on some of their development policies. Mr Anderson: They do. Q3 Chairman: And some joint activities. It is interesting from that point of view. Obviously we are here to explore with you your thoughts about DFID's engagement in sustainable development and the extent to which it is real or could be improved. We are concerned about to what extent there is a real drive to address sustainable development in a different climate and to what extent are they badging things that would be done anyway and calling it sustainable development? You say that you think it has become a low priority for the UK Government. Can you give us some evidence to back that up, as to the way in which that is manifesting itself? Mr Anderson: To a certain extent there are issues of definition here. The way that DFID might choose to define sustainable development perhaps differs from some of the more mainstream definitions of sustainable. They do tend to emphasise economic development or the economic component of sustainable development, and perhaps because of that there is less emphasis on the socio-economic and the environmental aspects of sustainable development. Also, as was pointed out in the environmental audits a couple of years ago, DFID's focus on the environmental elements of development has received a proportionate decrease in interest within the department and in investment. We can look at indicators in terms of the way the environmental advisers are integrated into country programmes and into central DFID, and, also, the way that the environmental components of sustainable development are factored in mainly through environmental screening, which we would consider does not take into account sufficiently the environmental causes of unsustainable development. Q4 Chairman: You also mention the Sustainable Development Commission in fairly complimentary terms in terms of its function, but say that it is does not have a very high profile in international work. Do you have a view as to how that can be improved or developed or strengthened to enable it to help DFID to deliver its policies more effectively? Mr Anderson: Perhaps due to the performance of that Commission there has been less interest in engaging with it as fully as might have been the case. There are certain chicken and egg situations here. If agencies such as DFID took more interest in the Sustainable Development Commission, in fact encouraging them to engage more in the realities of sustainable development within developing countries, its agenda would become more closely related to development issues, where they matter, and it may well be that the agenda could be honed more to the needs of countries which are suffering due to the environmental impediments to development. Q5 Chairman: In one sense you would have thought that the Sustainable Development Commission might start in developing countries, on the grounds that what they are trying to do is to promote development in sustainable ways before it has happened as opposed to trying to turn unsustainable development that has happened into sustainable development. It is a bit odd that you should say that the very existence of this Commission may have lowered that, when you might have thought it would have wished to push for that to happen. Are you suggesting that there has been no such push from the Commission itself? Mr Anderson: No, I am not suggesting that. Neither am I suggesting that the Commission was a cause of unsustainable actions. But there is a concern we have that the Commission needs to be better integrated, needs to be better engaged with development activities, development evidence, perhaps including, for those who are involved in providing evidence to the Commission, that the issues they deal with and the evidence they are using are more grounded in the realities of developing countries. Q6 Andrew Stunell: Your brief, a bit unkindly, referred to the Department's approach to sustainable development as window dressing. Would you elaborate on that point a little more, please. Mr Anderson: There is, as I have mentioned, a dichotomy perhaps between the interests of stimulating economic growth to solve poverty issues and a more holistic interest in development, including environmental causes and outcomes of development. DFID has rightly engaged thoroughly with Poverty Reduction Strategies in many developing countries but the way that it has done that has led it to ignore or certainly put far less emphasis on an integration of environmental causes of poverty than might otherwise have been the case. Q7 Andrew Stunell: Could you give an example of where you see that happening at the moment with the current programme? Mr Anderson: Across the board, if we look at the agencies that are involved in developing the Poverty Reduction Strategies in different countries, we see that there are few cases - perhaps the Tanzanian case is one that is worthy of investigating further - where the environmental concerns have been more thoroughly integrated into the Poverty Reduction Strategy process. Q8 Chairman: The Committee is visiting Tanzania as part of this inquiry. Mr Anderson: I think it would be interesting to examine that case further to see whether the integration of agencies, government agencies and others involved in the environment side of sustainable development, have been sufficiently engaged with during the development of the Poverty Reduction Programme that Tanzania has taken up. Of course it is less easy to learn from success than from failure: success is due to a myriad of factors, whereas with failure one can perhaps be more prescriptive in terms of the facts that have led to failure. I can think of a number of cases where environmental foresight has not been included in Poverty Reduction Strategies. I think there are more cases of that across Africa and South Asia, and it may well be worthwhile looking at such cases. Q9 Andrew Stunell: Would you be able to give the Committee a note on one or two of those? You have given us a good example as you see it, which we are visiting. Do you have some bad examples in mind? Mr Anderson: I would not like to name bad examples or even label country-driven initiatives as being bad examples, but we could certainly provide information on those that would assess the level of engagement of environment agencies, both government and non-government, within the Poverty Reduction Strategy process. Q10 Andrew Stunell: Thank you. Also in your evidence you said that DFID had a short-term perspective which was making it difficult to get sustainable development incorporated effectively. What do you think the solution to that problem is? How can DFID develop a more long-term approach to these issues? Mr Anderson: I would like to point out at this juncture that in my career, as is pointed out in my biography, I have been a DFID employee. As I mentioned to your scientific adviser, there is no axe to be ground here. DFID is an organisation that I joined because I thought they were doing some good work and they continue to do so. Inevitably, however, with an organisation, a government department, that has its workload defined in large part by political cycles, it is more expedient to be dealing with shorter-term, more easy-win objectives. Environmental degradation - the classic example being the way that this climate change is exacerbating different elements of environmental services - is a long-term issue. DFID and its partners, the developing governments, suffer from the same conflict of interest between dealing adequately with long-term investment problems and dealing with those within a shorter-term political cycle. It is not just DFID, it is the partners that DFID is working with which suffer from this. Also, DFID is a reasonably high turnover, dynamic institution or organisation, and, as I have said previously, there is a strong interest in managing economic development for poverty reduction which perhaps you can do on a shorter-cycle basis but, in terms of the way that environmental, social and cultural cycles coincide with economic cycles, there is the need to work over the longer term, and the incentive structure perhaps within DFID is not such that individuals, departments, or teams within DFID respond to that. Q11 Andrew Stunell: There is no reward for looking to the long term is what you are saying. Mr Anderson: I would not say there is no reward. I would say that the reward structure does not emphasise longer-term issues. Q12 Chairman: That should not inhibit the World Bank so much, should it? Mr Anderson: No, it should not. However, as we have seen historically, the Bank also is less convinced of the need to address longer-term environmental issues in its development planning and its loans portfolios. Q13 Chairman: That might be a point of engagement between DFID and the World Bank. Mr Anderson: Yes, I think it might be. DFID does and should continue to encourage the Bank to take on environmental concerns. This is the opportunity that the arrival of climate change issues on the agenda provides us, because we are now being shown that environmental externalities to conventional growth patterns have led us into a situation most close to a tipping point, and the tipping points in different parts of the world are going to be at different distances into the future, including from now right the way through, so we are being encouraged by the nature of the environment to take a longer-sighted vision and, also, to include evidence for our planning that generally looks at the environmental causes of development failure. Q14 Mr Singh: Is there a development agency that we could look to with better practice or best practice or a better balance in terms of the economy and the environment? Mr Anderson: Yes, I think there is the need to address the balance. Q15 Mr Singh: There is a critique of DFID there, which is fair enough, but is there a development agency we could look at and learn from which has a better record or better practice? Mr Anderson: There is a number that have attributes that DFID could investigate. Organisations that have taken a more environmental approach to development have more expertise in engaging with both civil society and government agencies within developing countries that have pursued those issues more thoroughly. DFID has a very, very broad portfolio. Q16 Mr Singh: But you will not tell me who they are. Mr Anderson: There is a number ---- Q17 Chairman: Are we talking about Danida here or somebody else Mr Anderson: There is a number of international NGOs who are far more willing to look at the environmental causes of what we might call development failure. Those are well known. There are, of course, developing country networks which are exposing both the environmental and socio-economic causes and effects of environmental change, including climate change. One which comes to mind and with which we are closely involved is the capacity building in least developed countries on adaptation to climate change. This is the CLAC network. This is a civil society network across South Asia and Africa. Those organisations, small organisations, are grouping together to increase the volume of their advocacy voice, working together on environmental change issues, particularly climate change issues, within countries and cities: health, the economic costs of adaptation, and coming together to provide evidence both of practice and what they are doing on those issues and on their evidence gathering. I think that is a good example and we can provide other examples. Q18 Chairman: You say in your evidence that DFID used to be supportive of sustainable tourism but has effectively pulled out of it and should go back. We are going to have a separate session on tourism, so I do not want to go into too much detail, but could you elaborate on the specifics. Your view is that DFID used to and they now do not but you think they should go back. DFID could be doing more to promote sustainable tourism. Is that still true, given the current economic climate? Mr Anderson: I think we can point to some country programmes that were exploring the potential for tourism, namely some in southern and eastern Africa. The central part of DFID was also investing in developing the evidence of the poverty reduction contribution of more sustainable tourism. There is an issue here of being able to look at evidence from the medium term, because it is not as if you can go and take a snapshot of what is happening with sustainable tourism and then solve all of the issues. There are some quite complex issues in terms of the distribution of benefits from sustainable tourism that are not static. If one looks at some of the potential for tourism to continue and increase its contribution to GDP in certain countries, if the institutional work, which is probably the most difficult, the inter-organisation and the distribution of benefits is worked upon, then the poverty reduction potential can be better realised. Perhaps this is an issue again of not being able or not being willing to maintain an interest into the medium term to appreciate fully the benefits Q19 Chairman: Your evidence is helpful. The written evidence clearly is that you can look at tourism as pro-poor. Mr Anderson: Yes. Q20 Chairman: You can also look at mineral and other extractions in a pro-poor way. Mr Anderson: Yes. Q21 Chairman: That clearly is a useful development role. Of course this is only the start of this inquiry but we might consider making a recommendation that DFID should look back into that. One of our colleagues who is not here at the moment said, "DFID does not support tourism, so why do we look at it?" But the question is that we should be looking at whether they should be. You are saying that they should be. Mr Anderson: Yes, we are very firmly of the opinion that that has great potential. Chairman: That is very helpful. Q22 John Battle: Could I return to the idea of environmental integration, in particular the concept that might be helpful of environmental governance. For a long time in the 1960s it used to be put in the tabloid form of "setting the people against the trees" in the South American example, and so there was a tension between environmental concerns and trying to tackle poverty. We then went through the economic arguments of exponential growth versus limits to growth - to use a phrase that was used. If I were to caricature what has happened in the debate now, just as labour standards were introduced and then poor countries said, "That's a barrier introduced by the West," to some extent the response now is "You're putting environmental barriers in boxes that we have to tick before we can get there." We have not taken a positive integration at the country level of this agenda. I do not think we have done it here in Britain, never mind asking other people to do it. Could we explore a bit more that concept of environmental governance bedding in, the binding together of tackling poverty and ensuring it is sustainable. That might change the mindset all around, might it not? What would be the main elements of that concept of environmental governance, in your view? Mr Anderson: The key aspect of that is access to environmental resources. Part of the reason those who are poor are poor, is the fact that they do not have rights of access. You will be familiar with Amartya Sen's conceptualising of poverty as a lack of freedom. In terms of rights of access to natural resources, environmental governance has a huge role to play in enabling poorer people to roll back some of the processes that have excluded them from access to water and to forest and to common land, et cetera. There is a very strong movement across different sectors to explore how those constraints of access to resources is imposing greater levels of poverty than otherwise might be the case. This is not just a rural issue because there is access to environmental goods and services that urban and peri-urban populations suffer as well. Of course, the management of the environment in the rural sphere, the way that it is managed and perhaps democratising that management, will mean that there will be a better distribution of the benefits from it. The crucial element of that environmental governance is to increase the right of access of those who are dependent on the natural resource base. Q23 John Battle: I can see that at the local level but perhaps I could push it a bit further and say I am really interested to see how environmental governance - and I underline the word governance, because sometimes we use that about governments and institutions as well - at the local level can build into institution building. To make it practical, there is criticism that DFID gave assistance in the form of budget support - that is the idea. To draw an analogy, it could be said in Britain, in my city, inner city Leeds, the biggest demand at the moment is people queuing up to get allotments. But it is not enough for climate change as a whole. There is a little thinking going on "Yes, think global and act local" but we need to both at the same time. It is a bit more complicated than just having your own allotment. Are we really suggesting going back to spectacular environmental governance projects at the local level, or is there some way of embedding the concept of environmental governance into the institutions so that budget support can be seen as not harmful to environmental development? At the moment your evidence suggests that it is. Mr Anderson: There is a trade-off there between economic development and managing the environment for longer-term development issues. We would suggest that direct budgetary support needs to be accompanied by a strengthening of civil society, or organisations certainly, so that for governments that are managing governance systems at the different scales there is a process in place that makes them accountable and that enables them to listen better to environmental concerns - environmental concerns both from the local level through to the public good of the environmental services. We would prefer to see that, alongside direct budgetary support, there was an encouragement, a dialogue with the Government to strengthen civil society. Q24 John Battle: Without civil society you do not get good governance anyway. Mr Anderson: Civil society is very important for demanding good governance. For example, last week I had the good fortune to meet the Minister for Northern Kenya and the Arid Lands and we were talking about incorporating climate projection information into his ministry's planning. One of the things that he was keen on was the fact that the organisations and advocates of the pastoralists, the agro-pastoralists and other arid land users, similarly were able to scrutinise and to use projection evidence in their emerging dialogue with the planning agency, with his ministry. He was very aware of this reciprocal nature. I think that is something that DFID could build elsewhere. Q25 Mr Singh: What were the expectations of the Poznan Conference? How important was it? Were those expectations met? Mr Anderson: I think the expectations were quite realistic. We knew this would not be the culmination, that before the change in the US Administration there would be little movement certainly on mitigation, probably on technology transfer issues, and that was borne out to be the case. On REDD[2] and also on adaptation there was greater movement. I should say that the movement at the Adaptation Fund and its operation in large part is due to the board members. It is not so much due to the parties' contribution at the conference. However, there was an Adaptation Fund board meeting directly following Poznan, and on the role of the secretariat and the trustees, the monetarisation of the carbon credits, the legal status of the board and its members there was significant progress made. From our perspective, concentrating mainly on climate adaptation in these developing countries or the most vulnerable countries, we came away with a very favourable impression of progress made. However, it still remains to be seen how much movement there will be, to whether the adaptation funds will become adequate and reliable in a way that the group of 77 and other parties are insisting. Q26 Mr Singh: That sounds as though you would not agree with Oxfam, who categorised the outcome as a shameful lack of progress. Mr Anderson: IIED are working quite closely with the Adaptation Fund. We have offered support through the chair to that process. As I say, the Adaptation Fund board has achieved more perhaps than might have been expected. The conference of parties provided a framework for that to happen but there are still parties who are less than helpful in terms of the development of that funding stream for adaptation. Yes, we are still looking forward to the outcome in Copenhagen. Q27 Mr Singh: Given that Poznan was the stepping stone towards Copenhagen, what are the major issues that we need to resolve in 2009, before Copenhagen, so that Copenhagen can be a success? Mr Anderson: I prefer to talk to the areas I know best, which is reduced emissions for deforestation and degradation and also the adaptation issues. However, progress on those will be thwarted if parties cannot agree on a set of mitigation targets. In terms of the adaptation issue, there is a major discrepancy between parties' opinions of the way that adaptation should be funded. There is a major polemic around what constitutes adequate and reliable funding. Personally I think there is a lack of evidence as to the balance between what is called planned adaptation, through state and other major intervention bodies, and autonomous adaptation by the private sector, individuals, households and firms. Understanding that balance, getting evidence of that and how adaptation finance can be channelled in the most effective ways, needs to happen in the interim. Part of the work IIED is doing is contributing to that, the level of knowledge as to what is the most effective way of supporting adaptation processes in poorer countries. In terms of the way that adaptation and REDD are linked, as I mentioned in the corridor to your scientific adviser there is a problem of a divorce between these four pillars. Adaptation and mitigation - it is a false dichotomy into the future - that realisation has to happen. 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 and looking at the possibilities for that. Similarly, in looking at the emissions reductions objectives of reduced deforestation and enabling local communities to adapt better to climate change effects, we need to open up that overlap. We need to unpack those overlaps for a more effective negotiating process to take place. Q28 Mr Singh: What would you advise DFID to do between now and Copenhagen to ensure that Copenhagen achieves its aims? Mr Anderson: DFID as a contributing element to the EU delegation needs to push hard on the link between adaptation measures and poverty reduction. I think it needs to re-examine the urgency with which adaptation needs to be put in place, so that the development, poverty reduction targets, the MDGs can be achieved or better achieved, or in fact sustained where achievements have been made. We need to have a better understanding, and to share that with parties, of climate change impacts on poverty. There is evidence emerging. The World Development report that was released just before the Bali meeting the year before last, has the basis and the starting point for very good evidence on the way that climate effects will hinder poverty reduction. I think DFID should be emphasising that in terms of the negotiation process. We also welcome the fact that DFID has provided further financial support to the Adaptation Fund board. That board and its operations need to be brought on line as soon a possible. We need adaptation planning through the National Adaptation Plans of Action to be taken seriously. We need pilots on adaptation to be far more widespread than they are. We need all developing countries to be learning what it means, not only to plan but to implement adaptation activities, and that in an environment where the transactional costs of that lesson learning are recognised and to some extent subsidised from Annex I countries.[3] Q29 Chairman: Is adaptation, funding pilots and so forth, something that has to be an add-on because there is a clear suspicion about diversion? Or is it possible to integrate it in ways that genuinely deliver poverty reduction? We are concerned about a situation where DFID will badge things it is doing and say, "This is the environment." It would be quite helpful to get an idea of what should be additional and what can genuinely be a poverty reduction component and simply orientated that way. Mr Anderson: I think we need to realise that, without adequate climate foresight (that is, the use of reliable climate projections), it is difficult to say that good development overlaps completely with adaptation. The reason for investing in certain adaptation activities will differ from purely development objectives. There are climate change effects that will affect certain sectors of the population more than others. There is an overlap, of course, with populations of the poorest and quite often the most climate prone. It is not sufficient to say that good development will solve adaptation needs. There are other objectives to be addressed. There is also the issue that a large number of parties to the convention consider that, where there is an ethical element to the way that compensation is paid on a polluter pays principle, then to allocate part of Official Development Assistance for adaptation is seen as a reduction in the resource flow, and actually the need for adaptation is such that we cannot really afford a reduction in the funding available. If we look at a number of parameters - the adaptation costing estimates that have been made, the way that pledges, particularly to Africa, around climate adaptation have not been fulfilled, the way that some adaptation funding has not been as efficient as it might have been - they are all indicators that there needs to be a special dedicated effort to test and to prove the effectiveness of adaptation activities. It may well be that, once that testing has taken place, the development allocation by DFID and other agencies can be better and that that overlap will genuinely be there, but up until that stage I think it is too early to say. Q30 Mr Singh: Given the global economic downturn and in fact, in some countries like our own, recession, do you think there will be any real appetite to have a new agreement on climate change at Copenhagen? Mr Anderson: Talking to the man on the street, the taxi driver, the people you meet through the hazards of life, as it were, yes there is a reticence to take seriously the need to increase flows of funds to developing countries. However, if we look at the responses where there are climate-related disasters, that speaks to the fact that people are able to identify adaptation or certainly relief measures from extreme events as special cases, and so there may well be a greater appetite than we would suspect. In addition, since different governments around the world have addressed the financial crisis with such huge quantities of finance and funding, what is possible? The £50 billion for adaptation costs per year compared to the massive amounts that have been pumped into the financial sector. I think, yes, people's mindset, the way people look at it, has changed. The key to this is to demonstrate the effectiveness of adaptation investments and to have better evidence around the counterfactuals: What would have happened? What will happen if we do not do this? This is not stuff that is happening over there. There are very real effects of climate change in developing countries that will have repercussions for us elsewhere. Q31 Chairman: There is a conference going on at the moment in the House where these issues are being discussed. One contributor said that he was worried about Copenhagen, that the danger was that we would go in, we would try to cobble together an agreement, and then say we had fixed it. Mr Anderson: Yes. Q32 Chairman: His suggestion was that we needed to ensure that we get the tightest agreement in terms of commitment we can, with enough flexibility to recognise that it has to be continually updated, that it is not a deal you walk away from. Just as a matter of interest, the scientific evidence we have been given is saying that the targets now need to be brought down to 350 parts per million to achieve those targets, and we are not even getting to the higher ones. The suggestion was that we are 10 years from the tipping point. Mr Anderson: Yes. Q33 Chairman: The plus point, which is to take Mr Singh's question, is that the current global downturn just buys us enough space and time, but if we were able to find all that money for financial rescue surely we could find some now as a result of the time frame. What do you think the possibility is of Copenhagen being conducted in that climate, perhaps with the American Administration taking a different view? Mr Anderson: I continue to be an optimist in terms of the way that the incoming Administration will slightly move the goalposts on a number of issues, the way that they were prepared to have a dialogue around these important aspects of climate change whereas the previous Administration was not. I think there is a danger that Copenhagen might be seen as the end of the road rather than the beginning. Most of our partners in developing countries see adaptation to climate change as a journey, not as a destination. Whatever happens at Copenhagen, there are surprises, there are thresholds in terms of climate effects that we are not anticipating. An agreement that enables us to (1) articulate those concerns and (2) allocate resources to deal with them is necessary. Of course the process will not put in place all the plans that are necessary but, hopefully, a framework that will allow us over the succeeding years to work out how implementation of those commitments should be conducted. Again referring back to DFID's role, there will be the need to monitor very closely how adaptation activities and investments are contributing to sustainable development objectives. The way that those investments are made needs to be scrutinised on that basis. That is a very important issue for DFID to develop its modus operandi. Q34 Chairman: I did find your written evidence had a lot of very useful data we could use. You have been involved in doing the adaptation funds in some of the least developed countries. Would you be able to give us a little bit more indication of how that could be applied because that seems to be very relevant to things that DFID could plug into. Mr Anderson: DFID has made resources available through the World Bank for its pilot programme on climate resilience. There is some criticism of the type of funding that has been available through that channel in terms of whether it should be loans money - even soft loans - or grant money. We criticised the initial planning. Indeed, DFID has responded in terms of the way the Bank will manage that process more democratically with the interests of developing countries closer to the centre. Of course that is part of a piloting process that needs to happen but it needs to be far wider than that. We would like to see DFID supporting a greater number of countries in piloting adaptation actions. We would also like to see, as I have mentioned previously, the National Adaptation Plans of Action taken more seriously. A small increment in the funds of the Global Environment Facility, for example, would enable all these developing countries to pilot the first one or two of the priorities that came out of their National Adaptation Plans of Action. That would be a relatively small investment that DFID could perhaps lead the way on, choosing the countries that are its highest priority, and many other donor partners would come in and support that. That we see as a necessary next step. Making loans available through the Bank is just one means of supporting adaptation. There need to be others and we need to have an impartial objective assessment of the effectiveness of the different channels. Q35 Chairman: The Committee is always in favour of helping DFID get a better return for its diminishing pounds. That is a practical suggestion. Thank you very much. That has been very helpful to us. Mr Anderson: I have brought along some other documents that you might like to consider. Chairman: Thank you very much. Memorandum submitted by World Development Movement
Examination of Witnesses Witnesses: Mr Alex Cobham, Head of Policy, Christian Aid, Ms Sara Shaw, Policy Officer, Climate Change, Tearfund and Mr Tim Jones, Campaigns Policy Officer, World Development Movement, gave evidence. Q36 Chairman: Thank you all three for coming in from your respective organisations. Again, for the record, could you just introduce yourselves for the shorthand writer? Mr Jones: I am Tim Jones, Campaigns Policy Officer from the World Development Movement. Ms Shaw: I am Sara Shaw; I am a Climate Change Policy Officer at Tearfund. Mr Cobham: Alex Cobham and I manage the policy team at Christian Aid. Chairman: Thank you all very much. I hope this will be a useful exchange. You appreciate that what the Committee is looking for is practical recommendations in a sense because there is sometimes a danger in this area that it gets very philosophical about approaches. What inputs and outputs we can get is what is of interest to us. I will ask Andrew Stunell to lead off. Q37 Andrew Stunell: Perhaps you could set the scene for us by telling us how effective you think DFID is in integrating climate change adaptation with disaster risk management and with environmental management? Ms Shaw: I will make a start. On the positive side we do welcome that DFID is putting greater emphasis on climate change and on disaster risk reduction. I know they launched their strategy on disaster risk reduction with which Tearfund were quite involved a few years ago. I think there has been an effort to develop some climate and disaster related activities and research at the country programme level and at an international policy level as well. The climate change adaptation in Africa research is an example of that. I think the ORCHID Programme, which is piloting integrating climate risk into disaster risk reduction, which was piloted in India and Bangladesh, and examples of that, a different version of that was also piloted in Kenya. I think those are helpful examples. In terms of a much broader approach to climate screening and full integration across programmes, I do not think that has been as full yet as perhaps it could be. I do not know if my colleagues have anything to add. Mr Cobham: I do agree with that. In the last couple of years DFID has really taken greater strides in bringing up the profile on its adaptation work and has put a lot of effort into that but there remains this issue of it is almost running separately from its other work, as Simon Anderson mentioned earlier, its economic development work, and that is a real problem. Mr Jones: I am not an expert on adaptation issues. There are comments that I would want to make about DFID's approach to mitigation and its role more broadly within the government of being a voice for those living in poverty around the world, which I would be happy to contribute now. In our evidence that we gave we highlighted the particular example of the Phulbari coalmine in Bangladesh, which is an open-cast mine that a British company would like to develop and which would displace, they claim, around 40,000 to 50,000 - an expert group from the Bangladesh Government predicted more like 120,000 - people from their land. In answer to a parliamentary question last year Gareth Thomas, Minister for Business and for International Development said that the British High Commissioner had been lobbying on behalf of the British company for this mine to go ahead. It is not apparent in this case either whether DFID had any say in this position of actively supporting this project or whether it has just been voices within the Department for Business, but there has certainly been lots of confusion around who is taking responsibility for this. So we have had emails going to the Department for Business who said this is a DFID matter and then we sent them to DFID. DFID said that this is a Department for Business matter. Fundamentally the British High Commissioner has been lobbying on behalf of this mine purely, we would say, in terms of profit for the UK company and economic development with no consideration of sustainable development and actually what it will mean for people on the ground. Q38 Andrew Stunell: I have a feeling that one of my colleagues might want to come back to you on that. Can I come back to what changes you think need to be made? You have emphasised some of the positive aspects but you also made it clear that you have some reservations. How do you think that the traditional development programmes that DFID supports need to be changed to take further account, better account of climate change? Ms Shaw: I think there needs to be much broader screening and climate proofing of all of DFID's portfolio's development work. You can develop a great project and build something in an area which is incredibly vulnerable to climatic changes, if it is in a flood plain or is at risk of sea level rise, and clearly that is unhelpful. So sometimes we have siloed it and only looked at some of the implications in some areas, whereas I think it needs to be a much broader process across all of DFID's programmatic work, looking at how you screen and how you proof that. 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. On the issue of financing, the fact that DFID has particularly directed financing through the World Bank rather than supporting some of the other funds which are around, for example the fund which gives money to NAPAs[4] or the Adaptation Fund is not particularly helpful either. Mr Cobham: I think there is a real problem that the vast bulk of, explicitly, the adaptation financing from DFID is going through the World Bank, for a number of reasons, in part because as we know the World Bank is not an organisation that has a good reputation for local ownership in its work. Its strength is in delivering large-scale projects of a certain sort. What it has not done is involve local communities in those projects and often the projects have been at great cost to those local communities. If we are looking for locally owned adaptation, which we must be if we are serious, it does not seem like the way to go. In addition, the oversight of the World Bank's adaptation finance is not at all strong, so the ability of DFID to hold the World Bank to account for actually delivering on its adaptation goals is far from clear. If I can mention one case. In August 2007 19 of the biggest development and environmental NGOs wrote to DFID requesting that they engage in discussions about the proposal that those NGOs - and it is quite something to have the line-up of NGOs that signed up to that - wanted to work together to work on pilots of adaptation finance that would involved effectively community-based adaptation; so putting a positive alternative to funding all this money through the World Bank. That proposal was not taken forward and the commitment of DFID to financing through the World Bank has remained and arguably strengthened. I think there is a need for DFID to look again at alternatives to the way that they do their adaptation financing. Q39 Andrew Stunell: So what would be the difference between a project which went through your 19 NGO community groups and one that came through the World Bank? Mr Cobham: For example, the tendency of the World Bank has been to finance, as I have said, large scale projects, whether that would be a hydro-dam or a large coal powered station perhaps ready for carbon capture and storage, but we know that the energy efficiency of that type of project is very low. Even Kingsnorth, being discussed here, at best would have an efficiency of 49 % but on average you are looking at more like 35 %. The alternative is local energy so that you do not lose the energy and the heat particularly through distribution; you have smaller power stations operating within communities. But that is not the kind of project that the World Bank is really set up to enable or to support. So it is that kind of thing and working with communities to see what their needs are for energy but also the broader issues like adaptation. It is that type of thing that the World Bank just is not geared up to deliver. Again, as Simon Anderson was saying earlier, involving local civil society is really key to making those projects work for the communities in which they are based. 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. Q60 Mr Singh: Coming down to actual figures and the variations in estimates of what is required-from the World Bank, $10 to 40 billion and $100 million estimated by Christian Aid-how much have you actually had at the moment? Ms Shaw: What is around in funds at the moment in terms of UN funds is just around $200 million. Q61 Mr Singh: So we are miles away. Ms Shaw: Yes. We are several scales of magnitude below where we need to be. Q62 Mr Singh: Am I right in understanding that we have not even yet got what has been pledged? Ms Shaw: That is true. There are a couple of funds; there is the Special Climate Change Fund and then there is the Least Developed Countries Fund. There is a short fall in terms of what has actually been pledged, which I think is about $172 million and about $130 million has come in. There are significant shortfalls in what is actually being offered which gives you a bit of an example of having an adaptation system which relies on an ODA type approach of what people are prepared to pledge and give, what countries are prepared to pledge and give as opposed to an innovative financing mechanism which generates it in a more predictable and stable way. Q63 Mr Singh: I completely agree with that but, given that pledges have not been met, would it be right to name and shame? Ms Shaw: I think they have been. Mr Cobham: That in a sense quite often happens with aid particularly and it does not seem to have a terribly direct effect. If I could pick up on that? One of the issues with funding through the World Bank or even the Regional Development Banks, although less so, is that this money needs to be owned by the countries where it is going to be spent. It is not aid, it is not charity given by the rich countries, it is a payment recognising their responsibility for this problem. I think if the money is coming through what are typically donor structures there is a real issue there as to whether they can ensure that the funds and the control of them are effectively in the hands of the developing countries. I think that is probably the strongest argument for making an investment in an alternative structure. I think there may be a small window for the World Bank or others to show that they can deliver funds in a way not like they deliver aid and earn some credibility, but I think that window is rapidly closing. Q64 Mr Singh: If you say that the funds should be owned by the country they are used in, yet there is huge reluctance in some development agencies to give money to the developing world. How can we make sure that the money is used for what it was meant to be used for and the use was transparent? Mr Cobham: I think it is a real problem. I am not sure the answer is to say let us do it like we have always done it and have this un-transparent badly governed structure at the World Bank because we know that it works to some degree. But how you deal with the complexity of those problems is a real issue. In particular how you ensure that you have community based development so that you do not simply have national governments appropriating the money for large scale projects that may or may not deliver, but how do you make sure that the projects are at a small enough scale that communities are involved? One part of the answer certainly is getting very serious civil society engagement to the extent that they can act as or are genuine representatives of those communities. Q65 Mr Hendrick: What if the community infrastructure is not there? What if it is an authoritarian regime, a despotic regime etcetera; these projects still need to go ahead. How do you work then and what importance do you attach to governance in a particular country before that money should be forthcoming to fund such a project? Mr Cobham: I think that is a reasonable question. I do not think the World Bank has an answer to that in the sense that they are --- Q66 Mr Hendrick: I am asking if you have an answer to it. Mr Cobham: They are also in the position of being uncertain at what point to draw the line with a government they do not like the look of. I do not think that problem is going to go away in the financing of climate change, in the same way that it is not going to go away in any other issue of financial flows to developing countries. But, again, to the extent that you can involve civil society you are more likely to get in a sense a more representative distribution of the expenditure. Q67 Mr Singh: Basically you are saying that we need a new financial package and structure in the future but we do not have sufficient funding. What is your advice or recommendation? How do we get that funding, raise the funding to meet the needs of financing adaptation? Ms Shaw: There have been some very, very interesting proposals made by quite a few countries. There have been about 10 proposals around financing that have come over the last year or so through the international talks and a few of them are of particular interest. One of them is the idea of auctioning international emissions trading permits, which are currently allocated on a free basis; so if you auction a proportion of those you are certainly raising sums into the billions. There are also some options around a levy on international maritime and aviation emissions which could generate significant amounts of money, in the billions. There are a number of other suggestions that are out there on the table and there are all quite good suggestions because they do bypass the domestic revenue collecting problem. Hopefully they end up internationalising that issue and they do not rely just on the goodwill of countries to give funding. So there are some good solutions out there. I think there has not been much progress in the international talks in actually agreeing any of those mechanisms, partly because the European Union has not formalised its position on financing - it will do that in the next few days. Q68 Mr Singh: Will an option or options be agreed at Copenhagen? Ms Shaw: That is the hope and it is the linchpin of getting an agreement because you will find developing countries extremely reluctant to sign up to any deal if there is not sufficient finance for adaptation, for mitigation and for the transfer of technology. So I think it is quite a crucial element of the deal actually. Q69 Mr Singh: Do you expect the architecture to be resolved at Copenhagen? Ms Shaw: The architecture one is more difficult. Some of the issues around how you spend the money, how you make sure that it is well spent, it does reach the poorest and most vulnerable communities, there is a lot more work starting to happen on that area and more pilot projects that will hopefully look at the work of the adaptation fund which should become operational this year, should hopefully pilot some of the way that you do good adaptation work and ensure it is well measured and verified. I think the governance issue is quite a sticking point and there is quite strong disagreement at the international talks about how it should be done. So not only we as NGOs but also governments and donors need to be thinking about how we resolve this issue so that we do not come unstuck. So I think donors will be reluctant to sign up to financing schemes that raise large sums of money if they do not know that it is going to be well governed and well spent. Poor countries are going to be very distressed if all the money goes through the World Bank and they do not think they have access to it. Q70 Mr Hendrick: Can I ask you what the Panel believes in terms of progress that has been made with the LDCs[7] in developing their National Adaptation Programmes and have the countries been given the level of assistance that they need? Ms Shaw: There are 48 least developed countries that are in the process of developing NAPAs and I think that there are now 38 completed plans and the funding for that has come from one of the international funds under the Global Environmental Facility. So there has been some progress in developing the National Adaptation Programmes of Action, and bearing in mind that the NAPAs are meant to be just looking at the most urgent adaptation needs, so they are not a really comprehensive long term plan looking at long term adaptation needs - they are just looking at the most urgent things. There is some funding for that; again, in terms of actually implementing projects I think there have been about 24 projects approved, a total of about $54 million, but there is only something like $130 million in the fund. So clearly that is a small number of projects from the NAPAs that have access to funding and if you were going to implement and fund all the projects in the NAPAs I think Oxfam estimates we need about $2 billion and it is not there at the moment, and I think that would again come back to the voluntary nature of contributions to that fund, and it just has not been adequate so far. Q71 Mr Hendrick: If there were the billions there rather than the millions that you talk about, are there problems with the governance issue? Ms Shaw: Governance structure of that fund itself or the governance within countries? Q72 Mr Hendrick: The Global Environmental Facility in particular. Ms Shaw: Developing country views tend to be that it is quite an onerous and difficult process - quite difficult for them to access. I think the fact that there are such a small number of projects that have gone through to gain approval is probably testament to that. It seems that it is not a particularly representative decision-making structure, unlike something like the Adaptation Fund Board, which has representatives from donor and recipient countries and some of the most vulnerable country groups. It is clearly not as transparent or representative as that. So I do not think it is viewed as a particularly ideal fund and it does seem to be bottlenecking somewhat in terms of actually processing money. Q73 Mr Hendrick: Is it important to maintain, do you believe, separate funding streams for development and adaptation to climate change? If so, how can this be reconciled with trying to integrate adaptation into development programmes themselves? Ms Shaw: I think that is one of the critical issues. We very much believe that adaptation funding should be separate in terms of it should be generated from different sources; it should not just be overseas development assistance. However, the way that you spend it and how you get it out there, I think most of us support very much a mainstreamed approach where you mainstream climate change and adaptation into your development work. I think that raises a lot of headaches in terms of you can gather all this money but how do you spend it in a way that is really integrated? I am afraid I do not have the golden bullet answer that you are after, but I think that is something that again has to be very much a focus because there is something of a contradiction there. Mr Cobham: The thinking about development and adaptation cannot be separate but I think politically, as much as anything else, adaptation funding needs to be completely separate from ODA and I think that is still to be resolved in Copenhagen. If I can come back briefly to your earlier question, I think that is exactly the right question for this Committee to ask. You have five departments now taking some kind of a lead on climate change and the UK itself is, in terms of the UNCCC negotiations, part of the EU bloc. It seems critical that the UK is able to speak with one voice, to take some leadership. We would hope that the new department is where that leadership can sit, drawing on the expertise that DFID has in its areas and drawing to some extent on the engagement of the money at the Treasury and whatever expertise exists at BERR and at the Foreign Office, but somebody somewhere has to take leadership and have power with that, otherwise there is the risk of the UK's position being fragmented even before it then puts the position into the EU position which itself risks fragmentation. Without leadership from countries like the UK that do get it the chances of a deal are very, very low. Q74 Chairman: The Government has allocated £800 million for the Climate Investment Fund to be delivered by the World Bank. This is being jointly done between DFID and DECC so hopefully that indicator and the structure is going where you want it to go. But what is your understanding about the controls that we might seek to have over that money? It is quite a lot of money to give the Bank for a new project - I am not saying one does not trust the Bank. For the UK taxpayer you want to be sure that it is actually going to deliver the outcome. What is your feeling about how that will controlled? Mr Cobham: It is very tricky. One possibility is the Dutch approach, which is to say that the money that they put into the CIF has to go to a certain sort of project but of course the risk is that all of those projects are then ring-fenced for the Dutch money, as it were, and everyone else ends up supporting, in effect, the least positive, least clean investment projects that the World Bank has. Without there being some kind of higher level assessment or verification of the World Bank's impact I do not see how DFID can hold them to account for the spending of that money. I think in that relationship between DFID and the World Bank - I think there has been a building of trust and certainly talking to DFID there is a genuine belief that the World Bank can and will deliver - there has not been the creation of any kind of structure to verify that or any transparency in that relationship. Q75 Chairman: The Committee has done its own report on DFID's relationship with the World Bank and we have made our statement so I guess we can marry that up and we will obviously ask DFID ministers exactly that question. Also, because there is a whole discussion sometimes about what is new and what is repackaged-how much of this in your view is new money that has been specifically pulled out and identified for this purpose as opposed to a diversion of the development budget and was going to happen anyway, in which case it is diluting it. Ms Shaw: Certainly the line that we have always been given on the Environmental Transformation Fund, which has now obviously morphed into the money that has gone into the Climate Investment Funds, is that this was a new bit of money on top of what was already existing, which was why there was some justification for it being loans, which as NGOs we are unhappy with the idea of money being given as loans, particularly for the adaptation component of it. But it appeared that this money came pretty much from - my understanding is from Number 10; that it was an initiative, they wanted to spend some money on climate change and there was a bigger sum of money put out there. So to that extent it is a new bit of money rather than a re-badging, but occasionally there are announcements on forestry and you think, "Hang on a minute, is this the money that went into the ETF last year?" Mr Jones: I do not know about the details of it, but because it counts as ODA it goes in the figures and so it goes towards to meeting the targets we have already set ourselves. So in that sense politically it is not new money because as long as it contributes towards the target that we already have then --- Q76 Mr Hendrick: Does it matter whether it is new money or old money? Does it not matter more that it is spent in the areas where it should be spent? Mr Jones: Ultimately it matters that we have a pre-existing commitment to 0.7 % by 2013 and that the adaption money ethically is compensation on top of that. So that is why it matters. Q77 Chairman: This is possibly a job for the DECC as well to determine that because that would be helpful if there was an independent base. Just to clarify, you are talking about the five departments and we were writing down here which we think they are; let us see if we are in the same ballpark. Mr Cobham: I got as far as four when I started counting and got confused. We have the FCO, we have BERR, we have DECC, we have DFID and, to an extent, the Treasury. Mr Hendrick: Can I just say, Chairman, that it is my understanding that every government department had to address the issue of climate change. Q78 Chairman: I was picking up the point that you said there were five departments. We were just second guessing that we were in the same area. Mr Jones: May I add a sixth as the Department for Transport is key in terms of mitigation. Q79 Chairman: Mark is right, every department of course. Mr Jones: Every department in terms of their own operations, but in terms of tackling climate change those are the departments that have to do practical things beyond, for instance, government buildings to do so. Chairman: I want to thank you for that. Clearly from our point of view the engagement we have had with you is helpful and it is always more helpful when it is specific. If you think, for example, that the Government is double counting or misappropriating or not prioritising right and you have evidence for it then obviously that is the sort of thing we want to hear - we do not actually want to hear it but we need to hear it - and therefore it is much more valuable than philosophical differences about what is exactly happening with the money and where is it really going. To be fair, clearly everybody is in a re-think mode so this is a good opportunity to challenge people. I think ministers and officials will be more receptive to say that we cannot assume anything we are doing is right, and clearly we have to say that simply re-badging what you were doing anyway and claiming it is new thing is not really good enough; and to the extent that you can help us with that, that is appreciated. So can I thank all three of you for both your written evidence and for coming in and exchanging your views with us? [1] The Danish International Development Agency [2] Reducing Emissions from Deforestation and Forest Degradation [3] Annex I to the United Nations Framework Convention on Climate Change. The Annex I countries are those which committed themselves as a group to reducing their emissions of the six greenhouse gases by at least 5% below 1990 levels over the period between 2008 and 2012. Specific targets vary from country to country. [4] National Adaptation Plans of Action [5] Sixth Report, Session 2007-08, HC 67 [6] Christian Aid Briefing Paper, 2008. [7] Least Developed Countries |