UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 177-vHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFOREINTERNATIONAL DEVELOPMENT COMMITTEE
SUSTAINABLE DEVELOPMENT IN A CHANGING CLIMATE
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Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
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Oral Evidence
Taken before the International Development Committee
on
Members present
Malcolm Bruce, in the Chair
Hugh Bayley
John Bercow
Richard Burden
Andrew Stunell
________________
Witnesses: Mr Michael Foster MP, Parliamentary Under-Secretary of State, and Mr Elwyn Grainger-Jones, Head, Climate and Environment Group, Department for International Development, Lord Hunt of Kings Heath, a Member of the House of Lords, Minister of State for Sustainable Development and Energy Innovation (and Minister of State in the Department of Energy and Climate Change), and Mr Andrew Randall, International Issues Advisor, Department for Environment, Food and Rural Affairs, gave evidence.
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
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 commissioned a pretty full report on climate change in 2002. Obviously, things have moved on quite a bit from there. At that time, as 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 programmes I have to say we do not automatically get a climate change statement 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 mainstream. An example of how we do it on 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 Project where, built into the policy to bring back 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 part 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 to this, 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
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 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, Fuji and Malaysia. There is a lot of country interest expressed in the consortium trying to run the whole operation.
Q231 Hugh Bayley: Which 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
Q232 Hugh Bayley: Michael, DFID is an implementation agency in developing countries for 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
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 Phillip, 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.
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 for support 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 per cent
GHG reduction by 2020, 30 per cent 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
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
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 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
Q239 Hugh Bayley: 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 is primarily
focused on the
Q240 Hugh Bayley: Is it meant to be?
Lord Hunt of Kings Heath: I wonder if I can answer this because I do have responsibility for the SDC. You pose a relevant question. It is the Government's independent watchdog and it is very much focused on the actions of government departments and it regularly publishes reports comparing performance between different government departments. They are very helpful because they lead departments which do not look so good to look at their performance. In that sense, of course, it does that monitoring. As to whether its remit should be widened to encompass the areas that you have suggested, I would be very interested in the views of the Committee on that. Jonathan Porritt is due to retire from the chairmanship very shortly and we will have a new chairman. That is clearly an opportunity to look at these matters again, but, as I say, the focus has really always been on ensuring that individual government departments understand the sustainability agenda and that their policies are very much focused towards that. It is one of a number of very important planks to taking forward government policy. Another area of great interest to you, I am sure, will be the development of carbon budgets, which again will introduce a discipline to individual departments in terms of the carbon emissions that they are responsible for, but that would very much embrace the sectors which they are responsible for and I think will again be another very powerful tool for monitoring performance and driving change.
Q241 Richard Burden: So far, given the fact that the Commission has its remit across departments, both departments focusing on the international action as well as those that are focused on domestic action, what has been the impression that has been coming out of the Commission about how far DFID relates to the Commission and how far it articulates only the strategy? For example, the UK's overall Sustainable Development Strategy was published in 2005, the Securing the Future document, and DFID articulated its approach to that, and two years later it had a Sustainable Development Action plan. Securing the Future has got these five core principles: living within environmental limits, ensuring a strong, healthy and just society, achieving a sustainable economy, promoting good governance and using sound science responsibly. My question is, if the Commission is meant to be the watchdog across government departments on how they are doing, what conclusions or assessments has it made about DFID's role in that, or is it that it has not really reached its conclusions? Does that say something about the Commission perhaps having its advisory role strengthened or links between departments strengthened?
Lord Hunt of Kings
Heath: Can
I just reiterate that clearly it is currently a time to review the progress of
the SDC and that I would be very happy to take this matter on board and to
discuss with DFID whether there are ways in which the remit of the SDC should
be developed. I do want to pay tribute to
the SDC. I think they have done a really
fantastic job. I remember as a Minister
in the Department of Health a long time ago when they were first appointed. At that time very few people knew what
sustainability was about and I think they have had a hugely important role in
educating and pressurising and getting government departments into a much
better state, but it is a moment when we need to reflect on progress and what
needs to happen in the future. As I say,
I would be very happy to take the views of the Committee on this and to explore
with my colleagues whether it would be appropriate to look at a widening of
their role. I have to say, of course,
that there is a lot that still needs to be done within
Mr Foster: The Sustainable Development Commission reports very much reflect rather than drive change but if it would help the Committee I do not think you have seen it but we could give you a copy of DFID's latest progress report so you get a flavour of the sort of engagement we have with the SDC.
Q242 Chairman: Thank you for that. I wonder, Lord Hunt, if I could turn to Copenhagen, knowing you have only got a few minutes. We have had some discussion and evidence to date about the likely outcomes, so perhaps in general terms first of all you could give us an indication of what you are hoping for or what you are looking to expect from that, and then also looking at what the developing countries might reasonably hope or expect from it?
Lord Hunt of Kings Heath: Thank you
very much, Chairman. Clearly we are in a
critical moment in the lead-up to
Q243 Chairman: Do you share Lord Stern's view, somewhat optimistically perhaps, that actually a downturn is a good time to get agreement because there is capacity and indeed opportunity for people to get economic benefit from adopting new technologies?
Lord Hunt of Kings Heath: I am not sure I would ever say a downturn is a good time so I am not sure that I necessarily share his view.
Q244 Chairman: I do not think it is a good time; it is a good time for agreement.
Lord Hunt of Kings Heath: However, I suspect that it has concentrated minds, and what the downturn has shown is the need for international collaboration on issues that are potentially very catastrophic. There is nothing more vital to us internationally than a climate change agreement. In that sense I agree with him. I also agree with him that a move towards a low carbon economy does not mean a low growth economy.
Q245 Chairman: That is actually my next point because obviously the developing countries' concern is that they need growth more than anybody and they do not want either to be shut out of growth because of the scale of a Copenhagen agreement that does not take their needs into account or, alternatively, to be locked into wrong technology growth which will cost them later. Are you satisfied, and I am looking at both Ministers I suppose, that those concerns have been fully taken into account and, relating to that, that the cost of applying Copenhagen will be properly allocated? I just repeat the exchange that I had with Javier Solana where the EU was offering to fund a third of the impact of Copenhagen on developing countries but developing countries, not unreasonably, thought they should get 100 per cent, and that is a big gap.
Lord Hunt of Kings Heath: I think on
cost the
Q246 Chairman: I have a final point and then I know Mr Bayley has a quick one and then I know you need to go. Mr Foster earlier on said that there was difficulty in separating out development costs and climate change costs. Nevertheless, the Committee's view is that somehow or other that will need to be done, not least because if there is a Copenhagen agreement there will be some compliance implications. If it is difficult to separate the costs out, how can you tell whether or not you have complied with any agreement that has been reached?
Lord Hunt of Kings Heath: I think that Mr Foster was referring to DFID's own budgetary position where I can well understand that there will be issues around how you define various expenditure heads. Chairman, you are quite right that in terms of the credibility of Copenhagen it will be absolutely essential that whatever agreement is made that the measurement of success (or not) has to be measured effectively, and people have to have confidence in the integrity of the system. I very much agree with that and clearly it is the same in relation to emissions trading schemes, where again it would be very important that the integrity of those systems can be relied upon. So in terms of authentication and in terms of monitoring, I agree that will be absolutely essential.
Q247 Hugh Bayley: I just wanted to pursue the Chairman's point about Lord Stern's comment that the downturn is a good time to drive forward the low carbon agenda. I do not think he makes this comment just because he is an optimist pursuing his cause. I think the economics underpinning that view are right. In his report Lord Stern says that you will need something like two per cent of global GDP invested in low carbon alternatives to achieve a maximum two per cent increase in the temperature target. There is a danger that you see two per cent of growth as cutting to 98 per cent what we produce elsewhere and therefore a terribly difficult thing to do in the downturn, but actually, if we think about it, that is not what the two per cent is doing. The two per cent is additional investment. It is not a top slice from global output; it is an additional investment in, if you like, wind farms and so on. Is not that the argument that should be made at Copenhagen - that increasing investment in low carbon alternatives is both necessary in climate change terms but also this is a perfect time to do it because we are looking for ways in which to stimulate investment?
Lord Hunt of Kings Heath: I do not
disagree and I think that there is a key challenge here for the
Q248 Chairman: Thank you, Lord Hunt, for attending. We do appreciate that you have got an important meeting and we need to release you.
Lord Hunt of Kings Heath: Chairman, I am very grateful to you for allowing me to do that, thank you.
Q249 Hugh Bayley: To continue on this theme of this great debate between low carbon strategies and growth, DFID has objectives both of promoting economic growth, which I think is a fine objective, and tackling climate change, which is an equally fine and necessary objective, and yet when you put the two side-by-side it is far easier to think of examples of economic growth being detrimental to the climate. I remember when the Committee went to China flying from Beijing to Gansu and you looked out of the plane and saw smoke stack after smoke stack after smoke stack of factories and power stations pumping out pollution. So how does DFID reconcile the ambition to promote growth in developing countries with its ambition to limit carbon emissions? Is it actually doable?
Mr Foster: Firstly, the
Government has the wider view that it is important to break this link that you
described that you can only get economic growth through degradation to the
climate and the environment, and it is important that that is seen not just
internationally but in the
Q250 Hugh Bayley: How are you going to achieve policy consistency between the output and recommendations of the Centre for Climate and Development on the one hand and the International Growth Centre on the other? Will they, for instance, audit each other's reports before they are published and comment on them? When it comes to disseminating the findings from these bodies in your work in developing countries, how will you ensure that there is an integrated use of the findings of both in-house think-tanks, when you think that most of your work on growth in the developing countries will be with finance and trade ministries and most of your work on climate change will be with different ministries, energy ministries and environment ministries?
Mr Foster: First of all, the International Growth Centre itself to which you refer has got its own low carbon element built into it, so there is already recognition in the creation of that body of the need to tackle the low carbon element. We also are planning to run joint internal programmes between the Climate Environment Group and the International Growth Centre, so that way we do think we can get the best out of both of those organisations in terms of policy development and research to then enable us to inform not just our own in-country programmes but because the interest that has been expressed by many countries across the world we hope to be able to then inform them with the findings on how best to take on board the knowledge and the research and the findings.
Q251 Hugh Bayley: How then will DFID seek to ensure that developing countries integrate climate change resilience into their development plans?
Mr Foster: That is an
on-going challenge for us, Mr Bayley. We
do it in terms of having what we believe is a compact approach to discussions
that we have, so that we have got a very clear breakdown of responsibilities
between what the developing countries do in return for support from the
developed country. We want to have very
clear and measurable reported results as part of any compact and that fits in
very much with the Paris Declaration on the most effective use of aid. At a national level, in terms of the
discussions we are having on the work that we do and the funding that we
accrue, we are supporting climate change advocacy officers to be placed within
civil society in developing countries to, in effect, put pressure within
developing countries so that the issue of climate change is not forgotten. That is an important method in which we can
fund this area. We are also looking at
individual bilateral support to developing countries to enable them to have a
stronger voice in treaties and discussions internationally. For example, we funded a part of the
Q252 Hugh Bayley: I am interested by what you say about civil society and climate change advocates. Over the years I have seen dozens and dozens of small NGO projects responding to environmental pressures in one way or another, doing really good, innovatory work and often just dying when that funding stream dries up. In East Africa we saw some really good work funded by your department in a very dry part of northern Kenya adapting to a changing and worsening environment, work with in-shore fishermen in Tanzania to try and ensure that there was local control of fishing stocks. They are doing good work but how do you ensure that when you have worked out a policy response to an environmental pressure that you roll out the knowledge?
Mr Foster: It is going to be one of the challenges that we face, I have to be honest Mr Bayley, in terms of keeping the pressure on with regard to advocacy, keeping the knowledge flowing through that is being created, or will be created through our research hub. Where we have spent some time and made a commitment is in projects that are trying to inform any post-2012 agreement and to demonstrate on the ground some practical ways in which that is being addressed. We have a pilot programme called Climate Resilience. It is under the Climate Investment Funds package; it is managed by the World Bank; and it is designed to look at what can be done practically to deliver on low carbon initiatives in developing countries, and the idea is that actually that can help inform the debate internationally and inform the discussions that are going to go ahead between now and December ahead of Copenhagen.
Q253 Andrew Stunell: Can we just take a look at the sources of best practice when we are getting climate change projects right. Partly it is the small on-the-ground schemes which have been demonstrated to work. Partly it is going to be academic and professional research. The most effective research is probably going to be that which is found in the local area taking account of local eco-systems and other technology barriers and so on. Are you satisfied that the UK Government is responding to that research and, for instance, in Africa that African-based research is really being taken into account when support is given for projects? I guess the inverse of that is how do you avoid having a wallpaper approach to projects that does not feed in the local parameters?
Mr Foster: Mr Stunell,
one of our flagship projects in this area is actually in
Q254 Andrew Stunell: Do you think the scale of your decision-making or interventions is sufficiently refined to take account of that or is there a tendency perhaps by local governments as well as your intervention to simply look to blanket solutions?
Mr Foster: It is a question that is very difficult to answer in terms of what we expect local governments to do and how they are going to respond to the challenges. What we think we can do is to provide information and knowledge based on good, hard evidence and research so that the debates are at least better informed when it comes to the type of decision-making that will go on. I do not think there is a guarantee that we can give that countries will necessarily follow the best evidence and the best policy, but they have a better chance of doing so if the information and evidence is actually available for them to look at first before they make a policy change.
Q255 Andrew Stunell: You see that as a clear priority for you in terms of the dialogue with national governments?
Mr Foster: It is a priority
not just in terms of informing in-country policy-making but also to inform
internationally any future deal that we might be getting in
Q256 Chairman: There is no doubt at all that DFID is pulling together useful advice, practical examples and funding those, but it is a bit like Aid for Trade, if there is no trade agreement the aid is not much use, and the same applies here. Do you have any indication of what the cost of adaptation is likely to be and what sums are likely to go into the pot for discussion at Copenhagen? There is a huge variation. I have seen figures ranging from 4 billion to 86 billion, which is a huge difference. In that context, how much of that should be funded by the UK and, if any of it is to be funded by the UK, how should it be funded in ways that do not compromise the development budget?
Mr Foster: In term of the cost, Chairman, you are right in pointing out the sheer variation in estimates that are there for meeting adaptation. In terms of how we envisage our contribution to this, we think probably a blend of options is the best way forward. There is obviously going to be a unilateral element from general expenditure. We are interested in the Norwegian proposal that has been put forward which is to set aside at auction a small percentage of emissions allowances to fund adaptation work, so there is scope in that that would be worthy of discussion.
Q257 Chairman: Taken from a separate fund?
Mr Foster: Then there are other options such as forms of global tax mechanisms. For example, there might be a maritime bunker fuel tax or possible aviation taxes that could kick in.
Q258 Chairman: You are interested in things that could identify a separate finance stream for adaptation that is clearly distinct from development?
Mr Foster: We think that the finance has got to come from a variety of sources. It is not going to be one that government alone are in a position to be able to deliver.
Q259 Chairman: You know that the Committee expressed concern when the Prime Minister suggested that the World Bank should become an environment bank. If I am honest, the Committee slapped him down somewhat and took the view that the World Bank was a poverty reduction bank not an environment bank and that it was a dangerous step to take. I do not know whether it worked but we have not heard so much of it since. You take the point that the Committee is concerned that adaptation and development need to be separately funded and not confused or blurred?
Mr Foster: We are
conscious of that debate that is going to go on and it is obviously part of
what is being discussed in the run-up to
Q260 Andrew Stunell: You say plan ahead, I think the United Kingdom has pledged $1.5 billion to adaptation schemes, and if the Guardian is to be believed, which it is not always of course, only 300 million of that so far has been forthcoming and not a lot of that has gone into Africa, for instance. Could you say something about the rate of spend and the nature of the projects because in terms of the predictability and the planning, I would have expected the United Kingdom to be right at the front in enabling that to happen?
Mr Foster: We have a
list of case studies which we can certainly provide the Committee with in
detail if that was helpful, but in terms of areas I think I mentioned earlier
in the session today the Chars Livelihoods Programme which is an example of
where we have actively been involved in adaptation measures to help in
Mr Grainger-Jones: In addition to that, the Climate Investment Funds, which I think you are referring to, on which there was a Guardian piece, those are a three-year series of disbursements. The first year was 100 million as the UK Government contribution. We made that contribution and the projects are being developed, but projects are not developed overnight. These are complex projects and we need to allow governments space to work up the programmes, but we have already agreed three country investment programmes from the Clean Technology Fund, so there is a lot of work underway and some pretty good country investment programmes that we have already seen. In the current financial year we will make a 200 million contribution and then in the subsequent year there will be a 500 million contribution, so in terms of the Guardian article, we would see the contributions actually going as planned.
Q261 Andrew Stunell: Adding up your figures that seemed to be 800 million, a one, a two, and a five, I think you have said, which does not seem to be the 1.5 billion which is in the whole programme.
Mr Foster: Is the 1.5 billion in dollars? We are talking pounds.
Andrew Stunell: You are talking pounds, I do beg your pardon. Thank you.
Q262 John Bercow: Good morning, Minister. In July 2008 DFID officials told us that no decisions had been made on whether environmental expenditures would be deducted from existing Official Development Assistance commitments or whether there would be additional funding forthcoming specifically for work on climate change. Can you tell us this morning, Minister, what progress has been made by the UK on this in preparation for the Copenhagen summit?
Mr Foster: In terms of our position it has moved forward in the sense that we recognise that there is an additionality gap. I think that is the term that has been used to describe where we are on ODA compared to dealing with climate change. We recognise that ODA will not be able to deliver all of the additional finance that is going to be required to tackle climate change, but I am wary of taking it much further, Mr Bercow, because of the nature of the negotiation process that is going on ahead of Copenhagen. That is the prize that we are all looking at. We are clear that there has got to be some additionality.
Q263 John Bercow: Can you just remind me of the timescale?
Mr Foster: I think
Q264 John Bercow: Of course, as you know Minister, it is always the very greatest of pleasures to receive you and it may be that such is the comprehensiveness and courtesy of your contribution this morning that you will become a serial recidivist and we might want to invite you again, I do not know. December is some considerable time away and, whilst I take note of the point that you make about the negotiations and they are very important and very sensitive and probably very confidential, et cetera, et cetera, it would be useful to have a sort of a hint or a nudge or a wink which indicates that there would definitely be some progress on this matter, even in the light of what is a very serious fiscal position here and elsewhere. If we are going to make progress on these matters it comes with a price tag. Would I be right in thinking - and I certainly do not want to tie you down too specifically - in three months' time you might have more to report?
Mr Foster: What I can promise, Mr Bercow, because you put it in such a persuasive manner, is that obviously the Government response to this particular inquiry might be an opportunity where we can inform the Committee further, and I will certainly take it upon myself, where we are able to discuss publicly a clearer picture of where we are, to write to the Committee to let them know and keep them informed of the progress that we are making.
Q265 John Bercow: Not necessarily as part of the Government's response but as an interim measure?
Mr Foster: As and when we have got more information we can furnish the Committee, then we will do that.
Q266 John Bercow: I must say that is helpful and I appreciate that and I hope colleagues will because there is nothing we dislike more than a void and a lengthy period of hearing nothing, so thank you for that. Is there a consensus within DFID on the way to deliver adaptation finance to poor people?
Mr Foster: Can I ask in what respect you mean a consensus? Could you repeat that question?
Q267 John Bercow: An agreed view about how it should be done, I give this but as an example, the provision of the resource should be, if you like, open-ended for use as decreed by the recipient or would you take the view, as I think the Dutch have done, that resources should be ring-fenced for specific types of projects? I know ring-fencing seems to be somewhat out of fashion as far as the British Government is concerned, certainly in respect of domestic policy (but that is another debate and I must not go down that avenue otherwise the Chairman will get irritated). As far as development assistance is concerned I think it is a relevant issue. Is there a sense about how this should be done, not just it is a desirable thing, rather like motherhood and apple pie, but whether there is a definitive view about how it should be done and how either permissive or prescriptive, how general or specific allocations of funds should be?
Mr Foster: Could I ask Elwyn to come in.
Q268 John Bercow: Then there are issues to do with reporting requirements and monitoring and accountability and so on, all of which are extremely salient matters.
Mr Foster: Perhaps I could ask Elwyn to come in and give a little bit more detail about our approach on this.
Mr Grainger-Jones: To some extent this whole negotiation over additionality, whether there will be additional money, has perhaps led to an approach in some areas that leads to separating out the way that adaptation money is provided right throughout the system, at the international level, at the allocation level and at the country level. In a sense, taking this question separately from the additionality question, where the money hits the ground it should be integrated, and that is a consensus view in DFID. It does not make sense, essentially, to have entirely parallel systems where there is a PRSP which looks at national development or agriculture policy which does the poverty bit of all of this, and then there is a separate thing which looks at agriculture and the climate change impacts of agriculture from a climate bit. That does not make sense. We are very keen to use and improve existing mechanisms to deliver finance to do this and we are keen to get it integrated into national planning.
Q269 John Bercow: That is quite helpful. Maybe I was a trifle opaque and maybe I should be a bit more explicit. I think there are some concerns about the international financial architecture, if I can use that pompous but on the whole accurate term. The International Institute for Environment and Development for example has noted that some developing countries have complained about the difficulty of accessing adaptation funds managed by the Global Environmental Facility, which carries with it quite a high burden in terms both of reporting and of the obligation to co-finance. The management of adaptation funds by the GEF, which is closely linked to the World Bank, is quite problematic for some developing countries who are rather suspicious of the World Bank's role in environmental management. The World Development Movement reports that the G77 and China have both stated that funds for mitigation and adaptation in developing countries should not go through the World Bank. These are significant concerns. My understanding also is that the UK has decided to provide 800 million from the Environmental Transformation Fund to the World Bank-managed Climate Investment Facility. This is quite a lot larger sum than the UK contribution to the UNFCCC funds (£18.5 million) and it is seen by some NGOs as rather undermining those funds. There is an element perhaps of needless competivity and duplication resulting, even if inadvertently. Christian Aid, for example, a very respected institution, told the Committee that it was concerned that DFID would not be able to properly monitor the Bank's allocation of these funds to different investment projects. The Dutch have got around this by a process of ring-fencing, as I indicated a moment ago. My wrap-up question here is: what is the rationale for relying so heavily on the World Bank as a channel for funding when some developing countries have expressed, in some cases quite pungently, concern about the Bank's track record on the environment?
Mr Grainger-Jones: Perhaps if I could follow up on that follow-up question. In a sense, there were a number of elements to that. Perhaps taking them as I understand the question, yes, we agree that the GEF systems to access Global Environment Facility projects need to be streamlined and improved. We are working with the GEF Secretariat and other Council members to reduce the transaction costs, and there are a number of ways we are trying do that. Secondly, we are major financiers of the Global Environment Facility. We are the fourth largest donor, providing 140 million to the latest replenishment, and actively engaged in the up-coming replenishment, so it is not as if we are not funding GEF. We also provide funding to GEF-specific trust funds such as the LBCF fund which provides money for adaptation. We have met our commitments to financing that fund. Nevertheless, when we designed the Climate Investment Funds we saw scope to pilot new ways of financing climate change that currently do not sit within the way in which GEF is designed because we wanted to pilot these ways of financing climate change with a view to informing how we design the GEF of the future, and indeed the wider international architecture of the future. Also in terms of the scale of finance that we were providing and the time window we had to allocate that expenditure, we saw a clear role for the World Bank. We do not see it as a poverty-enhancing measure to restrict what the World Bank does on environment and not to make efforts to improve the World Bank's overall specific activities on the environment. We see it as an instrument among many, and I think given the emergency situation we have on climate change we would want to use a number of organisations internationally, not only the World Bank. It does not make sense to exclude one or other when indeed there was so much interest by the World Bank in engaging actively on this agenda.
Q270 John Bercow: If I may say so, the normal response in these circumstances is almost a cultural or social phenomenon, which is to nod sagely at the outpouring of information that has just been volunteered in one's direction. I feel a bit sheepish about saying what I am about to say. It may be that the assembled multitudes listening will think this fellow really is frightfully stupid and slow-witted and bone-headed, and they may be right, but I have to say that although I regard your answer, both in terms of comprehensiveness of content and eloquence of flow, as quite unsurpassable, I am very sorry to have to tell you that I am absolutely none the wiser on the subject of the World Bank. I am going to have a final go. As I say, it may very well be my stupidity and not your lack of clarity. Let me put it to you like this: you described the governance arrangement of having the majority of developing country members on the trust fund committees of the World Bank Climate Investment Funds as, as you put it, extremely novel. This may well be the case for World Bank institutions and it might well be quite a novel approach but it does, with respect, have clear precedence under the UNFCCC, for example on the board of the adaptation fund, so I come back, if I may, to my rather persistent and thus far unanswered question: why is DFID and the UK so keen on the World Bank? What is going on? I am not a conspiracy theorist but I am not quite sure as to the reason for the love affair.
Mr Foster: Mr Bercow, I genuinely do not have anybody saying to me in discussions let us look at sending money through the World Bank route as the preferred option, so I do not think we are in love and certainly there is no conspiracy within DFID to prop up the World Bank this way. We are keen to encourage the World Bank to reform what it does. The international architecture does need to be looked at closely to get a decent 2012 regime in place, but we are also keen to look to deliver on the architecture through the multilateral development banks as well. I do not think that we are putting all our eggs in one basket of the World Bank, far from it. We are looking at the full range of players who will be involved and have the potential to exert a lot of influence.
Q271 John Bercow: Minister, Mr Grainger‑Jones and Mr Randall, you will be mightily pleased to know that my sequence of rather pedestrian enquiries is reaching its conclusion but I have just got one question that I must put to you. What in your judgment are the strengths and weaknesses of the proposal put forward by the Group of Least Developed Countries for an International Air Passenger Adaptation Levy as a means of raising funds for adaptation in developing countries? The related point is how will the Government ensure that tourism to developing countries is not adversely affected by any new measures agreed to mitigate greenhouse gas emissions in the aviation sector?
Mr Foster: We think that global tax
mechanisms can provide a way in which additional funding can be raised to deal
with adaptation. Clearly there are then
going to be challenges on mitigating any adverse impact that it might have in
the tourism sector that you mentioned.
There is a tension that clearly exists between the development and
growth potential of tourism. We know
what contribution it can make to international currencies within the developing
world. What we also know is that it is a
major contributor, and increasingly aviation is a rapidly growing contributor,
to greenhouse gas emissions, so there is a tension and a balance there, and we
think that the global tax mechanism is one way in which we can raise additional
funding. In terms of what we can do to
mitigate the impacts of tourism and the effect it might have on tourism, we are
looking currently at a scheme in
Mr Randall: Yes, it is worth adding that under the sustainable development
dialogues that Defra leads with the Plus Five countries there are projects on a
number of different issues, but with Mexico specifically there has been a
discussion around sustainable tourism and how might we develop models for
tourism which are beneficial for economic development, poverty eradication, and
in the interests of indigenous people, at the same time minimising the
environmental impacts, whether that is climate impacts or indeed impacts on eco‑systems
and biodiversity. That work is on‑going
but the intention is that that should produce recommendations which could be replicated
elsewhere so it would potentially serve as a model which we could then discuss
with other countries internationally. It
is probably worth adding that there has also been some work going on with Forum
for the Future looking at what might a sustainable tourism model look like for the
John Bercow: Thank you very much.
Q272 Chairman: It would be remiss of us not to pass on to you the very express concerns of the Tanzanian department of tourism about UK aviation taxation on long‑haul flights. They are already suffering a downturn and they say that increasing that taxation would (a) reduce the number of tourists and (b) reduce the share of the tourist expenditure that accrues to Tanzania as opposed to the UK Exchequer. They felt that this should be taken into account. The point they also make is that the revenues they get from tourism are substantially used to fund the conservation which the tourists are actually going to see. I am not asking you to comment, I appreciate that it is a Treasury decision but, as I say, it would be very remiss of us not to mention what is a very explicit concern expressed to us by the Tanzanians.
Mr Foster: Chairman, the point has been noted and as a department we have also
had conversations with countries in the
Q273 Chairman: If aviation taxes are agreed in Copenhagen would they be specifically directed towards developing countries? Is that the sort of form of proposal that is being worked up and being considered or being recommended?
Mr Foster: I am not certain that a formal proposal is being worked up ahead of
Q274 Chairman: Of course if the money were going into adaptation funds that would obviously be less reprehensible than going into the Exchequer.
Mr Foster: I understand the logic of the line of questioning.
Q275 Hugh Bayley: A couple of years ago the former Secretary of State, Hilary Benn, caused a bits of furore just before Valentine's Day by encouraging people to buy flowers from East Africa because of the development benefits and because the carbon emissions of the flowers were lower. A lot of environmentalists threw up their hands in horror. We have seen the Cranfield University study that worked out that hothouse flowers grown in the Netherlands had six times the carbon emissions of Kenyan products. Just so the public and consumers in particular are better informed, has the Government been looking at the possibility of some form of carbon labelling of produce?
Mr Foster: First of all, you are right to point out the controversy that was raised. In 2007, DFID chose Valentine's Day to really make the point of the impact on a developing country growing flowers and being paid for the growth of the flowers, but actually it was Pascal Lamy last year who also confirmed that Kenyan flowers air freighted emitted a third less CO2 than grown in a hothouse in the Netherlands, so that argument is still there. It is incredibly complicated though when it comes to dealing with food. I am not certain whether adding to the burden of labelling is necessarily the right way forward. We certainly have not had any great calls upon DFID to put further labelling on produce, but in terms of the overall issue about informing the consumer, I genuinely think that it is a thoroughly interesting area that we should be exploring. We do a little thing on our website which is not so much a game but something you can work through to find out whether you are a smart consumer on that front, and it does challenge people to look at the whole cycle of a product rather than just the transportation element of a product and, quite frankly, that will apply to an awful lot of products that we have and it will give rise to tensions here in the UK between the argument to buy local produce to support local farmers, without consumers necessarily knowing what the climate change impact will be of that decision, let alone the developmental impact that that will have.
Q276 Hugh Bayley: Here is a simple solution. I agree with you that you do not want to burden the system with regulation unnecessarily, but given that a lot of African horticulture starts with a lower carbon content anyway than greenhouse‑grown European produce, have DFID and other donors considered the possibility of using DFID resources to buy carbon offsets for horticulture from Africa to enable it to be sold as carbon zero or carbon neutral produce, which would be much easier to label? You might be able to establish a ethical consumer buying pattern that says, "I am going to go for one of these developing country products providing it has got this carbon zero label on it." Does that make any sense at all?
Mr Foster: I can understand the logic of the approach and wanting to have rational consumer choice exercised when it comes to the buying decision to actually make a difference. The success of Fair Trade labelling has obviously sparked off the thought of using this as a way in which consumers can exercise their market power to then drive change through the whole supply chain. I understand the logic of that. I am not certain that we have gone into the detail of buying carbon offsets for that purpose in mind, but we do think that there is a role to play in informing consumers about the whole rationality of the decision that they make. I accept totally that that is a longer term outcome, Mr Bayley, but at the moment we are certainly getting no pressure to deliver that type of label. I do not know if Defra have got anything.
Mr Randall: I just wanted to add really that Defra is working quite closely with
DFID on food security issues generally, including food security internationally,
to develop increased production capacity internationally while maintaining
environmental sustainability, but also, yes, domestically, food security. To be very clear, since you mentioned
Q277 Chairman: Anecdotally, and other members of the Committee may have the same thing, I have explained what we saw at a flower farm in Kenya and how low carbon it was and a number of people have simply said, "Then I can buy my flowers in Tesco," the implication being that they were a bit reluctant to buy them because they thought they were high carbon when in fact they are low carbon and pro‑poor as well, so it does suggest that something that advertised that fact would have a significant benefit in terms of consumer perception.
Mr Foster: I accept totally that there is this educational process that we have
to go through to explain to consumers like the ones you have mentioned who can
then make a better‑informed choice as to the products that they buy. It is a discussion that I have in
Worcestershire which is a market garden area, and the impact of decisions to
buy beans from
Chairman: If Mr Quentin Davies were here, he would remind us of Ricardo's Law of Comparative Advantage which is being exploited but not always understood.
Q278 John Bercow: I do not know if you are familiar with it, Minister, but it is a theory that perhaps I need to develop at some reasonable length and perhaps I could submit a memo to the department. He is a distinguished ministerial colleague of yours now of course but he used to entertain the Committee on the subject of Ricardo's Law as well and Ludwig von Mises and Alfred Marshall!
Mr Foster: I would be going back in my studies of economics but they are familiar individuals, shall we say.
Q279 Chairman: Mr Bercow did stun Hilary Benn with a rendition of his father in one Committee session which I do not think we need to repeat. There is a particular point about tourism which is something we have also looked at. First of all, DFID does not really engage very much in promoting tourism. A point that has been made by the ODI, however, is that 80 per cent of low income countries include tourism in their poverty reduction strategy so one of the broader questions is to what extent does DFID take account of tourism development as part of its poverty reduction strategy? Is it something that it should revisit? In that context can I say that attending a seminar on tourism sponsored by the UN World Tourist Organisation I was stunned, and indeed rebuked for it from the platform, by the fact that the British Government is withdrawing from membership of this organisation, which I have to say I found astonishing. It costs apparently €330,000 a year. There are 150 country members of which the UK is about not to be one. It was DCMS who were the sponsor and they decided that it was too expensive. Does DFID have a view on this and indeed would DFID be prepared to take up that membership? I am sure that our report will reflect that it seems to us quite shocking that we are withdrawing from such an important organisation.
Mr Foster: May I ask if I can go away and look into this particular aspect and come back to the Committee as soon as I possibly can.
Q280 Chairman: It seemed to be the case that one sponsoring department took a decision but it does not appear to have been a Government decision, just a departmental one.
Mr Foster: Let me have a look, Chairman, to see what we can do.
Q281 Hugh Bayley: To tag a point on to that, it struck me that in East Africa there are some forms of tourism which are a great deal better than others in terms of the pro‑poor focus and indeed in terms of the environmental impact. It did cross my mind that it would be a good thing to encourage some fair trading classification of tours offered for sale in developed countries so that consumers could put their tourism pounds behind better rather than more damaging tours. The difficulty is that there are, we were told, dozens of different tourism classifications for quality of hotels and the way staff are treated and carbon consumption. Would it not make sense for the Government to advocate a simpler system so that consumers really knew which of the logos or rosettes matter and could therefore make more rational choices? Incidentally, would that not be a good reason for the UK to maintain a presence in the UN World Tourism Organisation so that we could advocate a more rational classification system?
Mr Foster: On the concept of having a better label or recognition or trademark of what is a green or sustainable tourist package that somebody might want to buy, I think you are absolutely right and the Foreign Office actually is supporting the establishment of a green rating system already for the hospitality industry in South Africa and they want it to be operational by the 2010 World Cup. This is a direction with which the Government would concur.
Q282 Chairman: Is there a case for DFID re‑engaging in tourism, not because the promotion of tourism requires DFID's engagement, but is the extension of pro‑poor tourism something that would be legitimate for them to promote, following Mr Bayley's point?
Mr Foster: We do not necessarily think that we have any comparative advantage in tourism as a department compared to other countries who do tend to lead more on tourism compared to ourselves, so it is a conscious decision that we do not promote ourselves as a major sales team for the benefit of tourism.
Q283 Hugh Bayley: Could I come back. The Minister has kindly said that he will look at the World Tourism Organisation issue specifically, and perhaps he can look at the bundle of issues that we are putting to him on tourism. The Dutch Government certainly has taken a much greater interest in tourism and development, and I understand the Minister's view about sharing out the responsibilities to develop policy rather than have every donor replicating work that others are doing. Given that DFID takes a very strong interest in explaining its work to the public in Britain, where you do have good work done by another reputable development agency would it not make sense to seek in the UK as one of DFID's jobs to disseminate that information? For instance, just as an example, one of the things that I learned from the Dutch in East Africa is that by far the most pro‑poor part of a European tourism package to East Africa is the handicraft sector and the local culture, where the money you spend on handicrafts goes almost entirely to poor people whereas the money you spend on food in a restaurant will go largely to an international company.
Mr Foster: First of all, I think there is some scope for DFID to support as part of our growth policy perhaps niche markets within the tourist sector that might need some support, and a Challenge Fund approach may well be a good incentive to help private industry within the developing countries engage better in promoting a pro‑poor aspect to tourism. I think there is scope there. On the general promotion of tourism and the dissemination of what we do as a department, you are probably aware of the Developments magazine that the department produces. In January 2010 the edition is dedicated to tourism. Although we are not a major player in tourism - we leave that to other countries - we have not forgotten that it has an important role to play in terms of development, and that magazine is featuring tourism.
Q284 John Bercow: How is DFID assisting poor people to access appropriate low-carbon, affordable technologies to provide their basic energy needs?
Mr Foster: In terms of the agreements that we want to get, one of the key
development tests that the Secretary of State has laid out ahead of
Mr Grainger‑Jones: There are a few initiatives that we are working on. The Sustainable Renewable Energy Programme is a fund that we are working with other donors to design. It is part of the Climate Investment Funds.
Q285 John Bercow: What is its value?
Mr Grainger‑Jones: It depends how much the donors will
contribute and we have not yet had the pledging meeting. I believe we are looking at a £25 million
contribution, subject to it being satisfactorily designed. There is also the Global Village Energy
Partnership which is a UK‑based NGO which provides support to small
businesses to provide basic energy products.
We are also working with ESMAP, a World Bank programme, to provide
information and support at a country level.
As the Minister said, there is also the overall framework to incentivise
the development of low carbon technologies internationally which we hope the
Q286 John Bercow: Of course some of these initiatives, which are by way of being at a formative stage, adjudged by your talk about pledging meetings and what people will contribute, and the emphasis very much on the future tense, nevertheless will result, I assume, from discussions that you have had with, amongst others, energy companies. One would assume that some of the discussions that you have been having will have been with these energy companies. Far be it for me to sniff at or diminish the significance of what has already happened, but would it not be a broadly accurate summary of the status quo to say that people think that this is a jolly good idea and discussions have been held about what a jolly good idea it is. In support of this jolly good idea, funds will be required, and all of the discussants think that it is indeed a jolly good idea that funds should be contributed, but it is perhaps not quite such a jolly good idea that they themselves should be expected to contribute all that much, or at any rate not until they have discovered what somebody else is going to contribute. It may be that I am drenched in cynicism, Mr Grainger-Jones, but I just have a hunch that as is very common in multilateral initiatives, and with some justification, not just by companies but by governments, that institutions are slightly reluctant to show their hand and to say, "We will contribute X," until they have got a sense of what others are prepared to contribute. I think it would probably be chronically unfair of me to use the words "long grass" to suggest that this is where these initiatives currently reside, but, equally, might it be fair to say that though conception is well‑advanced, execution is still some way off? If you will forgive me, I had a sense there was quite a lot going on but I did not have a huge sense of urgency about these important matters.
Mr Grainger‑Jones: From my perspective there is a great deal of urgency in terms of really ramping up the assistance that is being provided, as we set out in our memorandum. There has been a surge of activity especially over the last few years to step up the provision, for example by setting up the Clean Technology Funds, which was a brand new initiative which from design to concrete programming has been developed very quickly. It was a 6 billion commitment to provision of funding to that initiative at the G8 last year. We are already providing our first contribution. In addition, the fund that I was just talking about, GVEP, has been up and running for a few years. ESMAP is up and running. SREP from design to pledging, and one hopes to programming, will be pretty rapidly developed. It is not an overnight thing especially if we are going to work with developing country partners to design them. It is something that we will hope to see designed from its conception about six months ago. We hope to finalise that within the next few months and get some pledging actually to start the programme.
Q287 John Bercow: Right, that is intriguing, because there was I, probably misguided fool that I am, thinking that there are three phases here, one was the conceptualisation of the scheme, the second was the pledging and the third was the implementation. I had missed out the fourth spoke which you neatly introduced in programming, so it is actually conceptualisation, pledging and programming, and what I am tentatively inclined to ask you is: at what point when all the conceptualising, which is very important, all the pledging and all the programming has been done do we actually get to the point where some resources might hit the street? In other words, it was helpful for you to say what you did in elaborating timescales about the next few months et cetera, but would I be a Panglossian optimist if I expressed the hope that in 12 months' time you might be able to come to this Committee and to tell us, with all guns blazing so to speak, with great alacrity, the first X million pounds-worth of funds had actually been distributed?
Mr Grainger‑Jones: I think the CTF will start delivering projects this year. We are happy to provide the Committee with further information on what GVEP has been doing and, similarly, with ESMAP. I would just make the point that if we are spending taxpayers' money and that is being programmed in quite complex and difficult environments, designing those projects is not an overnight activity but, just to assure the Committee, certainly the urgency is there in the way that we are managing these funds and at an international level we are pushing for rapid deployment.
Q288 John Bercow: It literally occurred to me off the top of my head - and I really do not doubt the department's commitment and I do not think there is any difference on that between us - that it is broadly analogous to something that the late John Biffen once said in a different context. I remember John Biffen when he was Chief Secretary of the Treasury saying that in terms of dealing particularly with constraining or cutting or restricting public expenditure you have to run very fast to stand still, the point being that there are all sorts of statutory obligations and expenditures that have to be made whether the government likes it or not, so the scope for discretionary expenditure or restriction thereof is comparatively limited. You just have to work incredibly hard to stand still. I sometimes feel that in these multilateral initiatives where you are having to engage with some other governments and perhaps some private sector institutions, it is quite Kafkaesque. Every time you take a step forward and think you are nearer the castle you find that you are a step further away. In a sense, one has to remind oneself to go harder and faster. My final question, if I may, is this: we have been looking at it very much in terms of what we are doing for these chaps and chapesses in a slightly British imperialist model of how we must help these people, et cetera. There is no doubt something to be said for that but often the most appropriate low carbon technologies for poor countries are developed by the countries themselves, so the other element of the equation about which I would like briefly to ask you is how DFID supports South‑South knowledge transfer on such technologies?
Mr Grainger‑Jones: In terms of the South‑South
aspect, some of that South‑South transfer of technology does not need government
support or public subsidy. The progress
of
John Bercow: That is extremely helpful, thank you very much. I have to leave and there is no discourtesy is intended because I have rather enjoyed this session.
Chairman: We must finish and you cannot go because we would be inquorate.
John Bercow: We must hear the Prime Minister and the Rt Hon Member for Witney, I am all agog, beads of sweat on brow. We must see Prime Minister's questions!
Chairman: Thank you very much. You will appreciate that what we are looking at is practical identifiable measurable outcomes that will actually deliver. I also would say that you have offered a number of information follow‑ups. Can I point out that we are working and our staff are working now to produce the report to a very tight timetable to conform to the White Paper, so anything you give us as quickly as possible, we would appreciate it. Thank you and thank you, in his absence, to Lord Hunt.