House of Commons Environmental Audit Committee

The impact of UK overseas aid on environmental protection and climate change adaptation and mitigation

Fifth Report of Session 2010–11

Volume II Additional written evidence

Ordered by the House of Commons to be published 22 June 2011

Published on 29 June 2011 by authority of the House of Commons London: The Stationery Office Limited

Environmental Audit Committee

The Environmental Audit Committee is appointed by the House of Commons to consider to what extent the policies and programmes of government departments and non-departmental public bodies contribute to environmental protection and sustainable development; to audit their performance against such targets as may be set for them by Her Majesty’s Ministers; and to report thereon to the House.

Current membership Joan Walley MP (Labour, Stoke-on-Trent North) (Chair) Peter Aldous MP (Conservative, Waveney) Richard Benyon MP (Conservative, Newbury) [ex-officio] Neil Carmichael MP (Conservative, Stroud) Martin Caton MP (Labour, Gower) Katy Clark MP (Labour, North Ayrshire and Arran) Zac Goldsmith MP (Conservative, Richmond Park) Simon Kirby MP (Conservative, Brighton Kemptown) Mark Lazarowicz MP (Labour/Co-operative, Edinburgh North and Leith) Caroline Lucas MP (Green, Brighton Pavilion) Ian Murray MP (Labour, Edinburgh South) Sheryll Murray MP (Conservative, South East Cornwall) Caroline Nokes MP (Conservative, Romsey and Southampton North) Mr Mark Spencer MP (Conservative, Sherwood) Dr Alan Whitehead MP (Labour, Southampton Test) Simon Wright MP (Liberal Democrat, Norwich South)

Powers The constitution and powers are set out in House of Commons Standing Orders, principally in SO No 152A. These are available on the internet via www.parliament.uk.

Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/eacom. A list of Reports of the Committee in the present Parliament is at the back of this volume.

The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume.

Additional written evidence may be published on the internet only.

Committee staff The current staff of the Committee are Simon Fiander (Clerk), Edward White (Second Clerk), Lee Nicholson (Committee Specialist), Andrew Wallace (Senior Committee Assistant), Jill Herring (Committee Assistant), Emily Harrisson (Sandwich Student) and Nicholas Davies (Media Officer).

Contacts All correspondence should be addressed to the Clerk of the Environmental Audit Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6150; the Committee’s email address is [email protected]

List of additional written evidence

(published in Volume II on the Committee’s website www.parliament.uk/eacom)

1 Development Education Association (Think Global) Ev w1 2 The Co-operative Group Ev w2 3 Peter Taylor, Ethos Ev w5 4 Professor Harriet Bulkeley and Dr Vanesa Caston Broto, Department of Geography, Durham University Ev w8 5 Population and Sustainability Network Ev w14 6 Plan International UK Ev w18 7 UNICEF UK Ev w20 8 World Development Movement Ev w22 9 The Met Office Ev w27 10 CDC Group Ltd Ev w28 11 Progressio Ev w33 12 DFID Office Congo Ev w37 13 DFID Office Indonesia Ev w40 14 DFID Office Malawi Ev w46 15 DFID Office Mozambique Ev w53 16 Export Credits Guarantee Department Ev w59 17 Richard Whittell Ev w64 18 Agricultural Biotechnology Council Ev w68 19 LTS International Ltd Ev w69 20 Dr David Hall-Matthews, University of Leeds Ev w72 21 H M Treasury Ev w73

cobber Pack: U PL: CWE1 [SO] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w1

Written evidence

Written evidence submitted by the Development Education Association (Think Global) 1. About DEA 1.1 DEA is an education charity that promotes global learning. We work to ensure that people in the UK learn about global issues such as poverty and climate change and develop an open-minded, global outlook. DEA defines global learning as education that puts learning in a global context, fostering: — critical and creative thinking; — self-awareness and open-mindedness towards difference; — understanding of global issues and power relationships; and — optimism and action for a better world. 1.2 DEA is a membership body, with over 150 organisational members including subject associations, universities, local authorities and many development and environment NGOs in the UK.

2. Summary 2.1 In this response DEA highlights the positive impacts resulting from DFID’s investment in development education in the UK. We offer evidence that funding for development education in the past decade has helped to ensure that the UK public are able to take urgent action to tackle climate change. 2.2 We recommend that: — The Environmental Audit Committee inquiry highlights the positive impacts of DFID’s funding for development education in the UK, in particular on the UK public’s ability and willingness to take urgent action on climate change. — The Committee recommends to DFID that it continue to fund a programme of development education in the UK to meet both its international development and wider sustainability objectives.

3. Evidence 3.1 DEA’s evidence relates specifically to DFID’s focus over the past decade on development education amongst the UK public. 3.2 One of the coalition government’s priorities is to “drive urgent action to tackle climate change” and the inquiry is examining the extent to which environmental protection and climate change mitigation and adaptation are prioritised in DFID’s programmes. 3.3 In an interdependent world, climate change mitigation and adaptation must happen in the UK as well as overseas, and mitigation here will have an impact on international development. As a country with high per capita carbon emissions, the UK has a proportionately greater impact on climate change than many poorer countries. By mitigating climate change here in the UK, we will reduce global carbon emissions significantly, as well as developing technologies that can be implemented in poorer countries to allow low-carbon growth. In this way we will reduce the negative impacts of climate change on development, and so contribute to DFID’s international development aims. This gives us a reason to spend money to encourage action amongst our own population. 3.4 DFID funding for development education has made a strong contribution, particularly in schools, towards ensuring that people in the UK are more aware of interdependence and the need for sustainability, and are more willing and able to take urgent action to tackle climate change. 3.5 Examples of DFID’s funding for development education include: — Supporting Hampshire Development Education Centre to provide staff training to 420 teachers to teach about global citizenship in primary and secondary schools in Hampshire. — Funding BRAC UK to train young peer educators in Tower Hamlets. These peer educators will raise awareness of the Millennium Development Goals and the need for environmental sustainability amongst 2,000 18–25 year olds who are not in education, employment or training. 3.6 Recent research from Ipsos MORI highlights the impact of development education in the UK: amongst those who have learnt about the climate through development education in school, only one in six people feel it is pointless to take personal action to tackle climate change. By contrast, amongst those who have not learnt about any global issues at school, a third of people feel it is pointless to take personal action to tackle climate change.1 1 Hogg, Shah, 2010, The impact of global learning on public attitudes and behaviours towards international development and sustainability. DEA: London cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w2 Environmental Audit Committee: Evidence

3.7 Some of the funding streams from DFID for development education in the UK are now being cut (for example the Development Awareness Fund, and the Enabling Effective Support initiative). Nevertheless, there are strong arguments in favour of DFID spending a small proportion of its budget on educating people in the UK about international development and sustainability issues, to help meet both our international development and sustainable development priorities.

4. Recommendations 4.1 We therefore recommend that: — The Environmental Audit Committee inquiry highlights the positive impacts of DFID’s funding for development education in the UK, in particular on the UK public’s ability and willingness to take urgent action on climate change. — The Committee recommends to DFID that it continue to fund a programme of development education in the UK to meet both its international development and wider sustainability objectives. 7 December 2010

Written evidence submitted by The Co-operative Group Summary — This submission is a response from The Co-operative Group (The Co-operative) to the Environmental Audit Committee’s inquiry into the impact the UK’s aid programme has on environmental protection and climate change measures in developing countries. — The Committee has invited organisations to submit written evidence setting out their views on this issue, including on whether financing mechanisms under Government influence (such as the Export Credit Guarantee Department (ECGD)) fully support environmental protection and climate change action in the developing world. The Committee has also welcomed hearing about particular aid projects which tackle environmental/climate change issues successfully. To this end, this submission includes: — A brief overview of The Co-operative’s work to combat climate change and tackle global poverty; — Examples of The Co-operative’s own development projects which tackle environmental/ climate change issues successfully; — And The Co-operative’s public policy position in relation to the ECGD as a financing mechanism under Government influence, which has an impact on environmental protection and climate change in the developing world.

Introduction 1. The Co-operative is a unique family of businesses, jointly owned and democratically controlled by over six million members. We are the fifth largest food retailer, the third largest retail pharmacy chain, the number one provider of funeral services in the UK. We also have strong market positions in banking and insurance. The Co-operative employs 120,000 people, and has around 4,800 retail outlets and branches. 2. Taking a responsible approach to business has been a guiding principle of The Co-operative since its inception. We are proud to have led UK businesses both on our approach to climate change and through our initiatives to tackle global poverty. 3. The Co-operative’s approach to addressing the issue of climate change is five-fold, embracing: energy efficiency, support for renewable energy, carbon offsetting, the provision of finance, and influencing public policy. This begins with ensuring sustainable business operations such as: — In the last three years, we’ve achieved an absolute reduction of 21% in our operational greenhouse gas emissions. — By 2012, we will generate 15% of our energy requirements from sustainable sources, including from our wind farm at Coldham in Cambridgeshire. — During 2009, over 98% of our electricity was sourced from good quality renewable (or green) sources, such as wind and water power. — We’ve made combating climate change a community investment priority. For example we’ve invested £2 million in our Green Energy for Schools programme and we’re supporting the development of community owned renewables, such as the Torrs Hydro project in New Mills. 4. Strong business credentials in the UK have allowed The Co-operative to lead on initiatives to tackle climate and global poverty challenges: — Climate change campaigning, including the Big Ask in 2007, which resulted in the Climate Change Act 2008 becoming law. We are also currently campaigning against tar sands development in Alberta, Canada. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w3

— Tackling global poverty, through ethical trade, co-operative support, ethical finance and campaigning: — Becoming the first major retailer to champion Fairtrade, and maintaining consistently higher sales of Fairtrade products for the size of our business than our competitors, with Fairtrade products in every one of our 2,900 Food stores across the British Isles. This is made possible by strong links with overseas suppliers. — Investing £7 million a year into co-operative support initiatives, in overseas co-operative development; large-scale water, sanitation and green energy projects; and products and services that help our customers and members raise money for global poverty charities. — Pioneering ethical financial policies, meaning we’ve refused over £300 million of bank finance, to date, from organisations that exploit people in developing countries or undermine human rights. — Campaigning on global poverty issues, from trade justice, to human rights, to climate justice. We are currently campaigning to tackle the “unfinished business” of Third World debt, calling for reform of the Exports Credit Guarantee Department (ECGD). — Furthermore, in 2009 we supported The Wave campaign, mobilising 2,500 of our members to join the march in London to call on world leaders at the UN Copenhagen Summit to agree a safe and fair climate change deal for developing countries. 5. We also recognise the intrinsic link between climate change and global poverty: — We are committed to reducing the carbon footprint of products, but never at the expense of the world’s poorest. — We undertake carbon offset projects in developing countries, which not only reduce carbon dioxide emissions but offer significant social benefits to the communities involved. — We support large-scale projects in communities in our supply chain, which combine improved access to water, sanitation and green energy.

Evidence 6. In this submission we will provide two examples of The Co-operative’s Tackling Global Poverty work, relating to the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation.

Tackling Global Poverty initiatives with positive impacts on environmental sustainability and climate change 7. Millennium Development Goal (MDG) 7 is to “ensure environmental sustainability” and includes targets on reversing the loss of environmental resources, reducing biodiversity loss and improving access to safe drinking water and basic sanitation. Many of The Co-operative’s Tackling Global Poverty initiatives contribute to progress on MDG 7, with two specific examples given below.

Water, sanitation and green energy projects 8. The World Health Organisation has calculated that for every $1 invested in water and sanitation, $8 is typically returned in terms of money saved through improved health and productivity. 9. The Co-operative believes the combination of improving access to water, sanitation and green energy helps to improve basic conditions and hence provides an important platform for future successful development. We are therefore funding and delivering water pumps, toilets and either fuel-efficient cooking stoves or solar power solutions, to farmers and workers in our supply chain, including those in Malawi, Panama and Mozambique. For example: — We’re supporting our own-brand Fairtrade sugar and tea producers and their communities in Malawi; in total some 30,000 individuals. Over several years these projects will provide new boreholes, latrines and hygiene education to community members. Such improvements in sanitation and water access should help reduce the spread of disease and also help stimulate other positive developments, such as improved school attendance. In areas where over 90% of households typically use wood as their primary cooking fuel, tree planting and agroforestry is further helping address deforestation and environmental degradation, along with support to set up fuel-efficient stoves networks. These stoves, which typically retail at equivalent to around £1.40 each, substantially reduce both wood needed and time spent cooking compared with traditional open fires. Work on the ground is being led by Concern Universal (sugar) and Oxfam (tea) and involves a great deal of community sensitisation and participation to ensure longer-term sustainability and success. — In Mozambique, we are supporting a project, via Save the Children, to provide boreholes, latrines and sanitation education in an area where less than 10% of people have access to clean water and sanitation. Additionally, a solar-powered facility is being constructed to pump water for storage, provide power for lighting in schools and to charge mobile phones. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w4 Environmental Audit Committee: Evidence

In addition, The Co-operative Pharmacy is working in partnership with UNICEF, on a large-scale project in Togo to help deliver a step-change in sanitation. The project is helping to build toilets and handwashing facilities in 390 villages, benefiting over 190,000 people. 10. The success of these projects is already apparent. For example, during the first year of the Malawi sugar project, significant progress has been made, with thousands of community members and school pupils gaining access to clean water, improved sanitation and fuel-efficient cooking stoves. Networks have also been set up, such as water point management committees, school sanitation clubs, village natural resources management committees and stove manufacturing groups, which are engaging with the communities and schools to promote the project outputs, and which have also received training to help ensure the longer-term sustainability and success of the project. The projects demonstrate that targeted aid that enables people in developing nations to provide their own solutions is the most effective use of investment.

Carbon offset projects 11. The Co-operative offers carbon offsets with its mortgages, holidays and insurance policies, which fund projects in developing countries. These projects, delivered via Climate Care, not only reduce carbon dioxide emissions, but offer significant social benefits to the communities involved. The Co-operative is currently supporting the following carbon offset projects: — Energy-efficient cooking stoves in Cambodia Energy-efficient cooking stoves reduce the amount of wood needed for cooking, which means less CO2 is released. The reduced demand for wood helps protect Cambodia’s forests as well as reducing household spend on fuel by around 20% compared to standard stoves. The stoves also emit fewer airborne particles and so can improve indoor air quality, which has attendant health benefits. It is estimated that over 330,000 people will ultimately benefit from the installation of energy-efficient stoves in Cambodia derived from 2009 offsetting activity. — Treadle pumps in West Bengal and Uttar Pradesh in India These manual pumps are used to irrigate fields outside the monsoon season. They provide a more sustainable and affordable alternative to expensive diesel-powered pumps, increasing productivity and bringing much needed additional income to farming families throughout the year, which in turns reduces the need for long periods of migration for work. Improvement of land management also helps households to enrich their diet, through the increased variety of crops they are able to grow and increased opportunities to afford livestock. It is estimated that over 265,000 people will ultimately benefit from the installation of treadle pumps in India derived from 2009 offsetting activity. — Reforestation in the Kibale Forest National Park (KFNP), Uganda To date, over 370 hectares of forest have been reforested in the KFNP, as a result of The Co- operative’s carbon offsetting, and chimpanzees and forest elephants have begun to migrate into areas previously reforested by The Co-operative Bank. Reforestation licensing agreements have enabled local communities to extract resources at sustainable rates (and with permit revenues reinvested in, and controlled by, the local community). Each year the project provides employment for around 400 workers in high season, all of whom are employed from the local population.

Export Credits Guarantee Department (ECGD) 12. Over 10 years ago, The Co-operative campaigned for the cancellation of third world debt and significant progress was made. As the first corporate member of the Jubilee 2000 Coalition, our customers and members contributed to the first ever global petition on debt relief and helped prompt the commitment of G7 leaders to write off billions of poor country debts. To date, over $100 billion of debt has been cancelled, freeing some of the poorest countries in the world from the slavery of debt. 13. The British Government has led the world since the Gleneagles Summit in 2005, and cancelled billions of pounds of Third World debt. However, some £2 billion—or 96% of Third World debt owed to the UK—is still outstanding in Export Credit Guarantees. Furthermore, the ECGD is issuing new debts through insuring failed UK exports. The vast majority of companies receiving ECGD support are large arms manufacturers, aerospace companies, or those working in fossil fuel industries. The ECGD has supported projects that have, on occasion, not paid sufficient regard to environmental sustainability or climate change considerations, or have led to human rights violations. Initiatives that have been supported include: — An oil pipeline in the Caucasus which has been implicated in environmental damage and human rights violations; — A power plant which cost the Indian authorities hundreds of millions of dollars despite being shut down because the local government couldn’t afford to buy electricity from it; and — Arms sales to the regime of the brutal Indonesian dictator General Suharto, which were used to repress the people of that country and which the current Indonesian government is still paying for. 14. The Co-operative is concerned that many developing countries are still paying off large debts for ECGD- backed projects that were of no benefit to their people, or which fostered corruption. We are also concerned that unjust debts will continue to mount up in the future since some smaller ECGD projects (where the cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w5

repayment terms is two years or less, or the value of the British export is under SDR 10 million) are now exempt from environmental, social, and human rights (ESHR) assessments, meaning they are not even checked for forced or child labour. Moreover, there is evidence2 that projects previously approved by the ECGD with a value under SDR 10 million, and subject at that time to ESHR assessments, were linked to problems such as risks of child labour. These types of projects would now be approved without screening or assessment. 15. The Co-operative believes that there is an opportunity for a new approach and that the ECGD could be a force for good—for instance exporting green technology to help developing countries on their path towards low-carbon development. We are campaigning for the Government to: — Publicly audit all outstanding ECGD debts and cancel those found to be unjust, eg where the ability to repay never existed or corruption was evident; — Adopt and enforce much stronger standards to promote a green economy, human rights and the end of poverty eg stop big fossil fuels and instead support projects on renewables and energy efficiency; — Stop the conversion of failed exports into Third World debt. 15 December 2010

Written evidence submitted by Peter Taylor, Ethos Note: I work as a professional ecologist and policy analyst on issues ranging through renewable and conventional energy sources, landscape, community and biodiversity. I have also written a book on climate change, global warming theory and the nature of the IPCC consensus. This submission is based on an analysis of development aid carried out in May 2010 for a private foundation.

Summary ofMainPoints S1. In the course of my analysis of development aid I was concerned with the question of how resilient the poorest people were in developing countries in the face of climate change, rising fuel prices and shifts in development aid. I concluded that currently development aid does not reach the crux of the problem for the world’s poorest people: they need sustainable agricultural practices, clean water, good sanitation and strong community. S2. The idea that “economic development” can deliver these objectives requires reappraisal—it has not done so in the past two decades, and is unlikely to do so. Indeed, economic policy and climate mitigation strategies are likely to make these people more vulnerable rather than less. Furthermore, nobody has any real idea of how to provide “adaptation” and resilience to climate change, other than “more of the same” type of development under more difficult conditions. S3. There are powerful forces at work that will make community life more difficult. Economic drivers lead to migration of males to cities and industrialisation of agriculture to provide for global markets. Traditional forms of agriculture have stood the test of cyclic climate change, whereas industrial agriculture depletes soil and water resources as well as uprooting populations and destroying local culture. S4. There are examples of resilient systems—currently small scale schemes largely funded by foundations, trusts and NGOs, rather than governments. We have been interested in developing networks, funding portals and lateral communication channels for ecologically sustainable agriculture, water and sanitation (with conservation of biodiversity and local culture) such that finance can be channelled to grass-roots organisations. In this respect, we have been in talks with UK banks on the issues of both development policy and climate change. S5. We recommend that the Committee look at the above issues. We also recommend a more cautious attitude to strategies of climate mitigation. There is absolutely no chance that a global strategy of emission reduction can significantly affect what the climate does in the next three or four decades—during which time there will be another billion mouths to feed in countries already suffering food deficit. Indeed another billion will be born over the next 15 years. At the same time “peak oil” will have had greater impact and natural climate cycles will subject these populations to unavoidable changes. Adaptation—especially with regard to the robustness of food and water supplies is paramount. S6. Important Note: In my review of climate science I concluded that there was a strong likelihood that a natural cooling cycle would dominate for the next decade and possibly longer. This cycle affects food production in the key grain growing regions of the northern hemisphere and is likely to depress yields such that a major food crisis hits well before any energy crisis. Three years ago I predicted cold winters and reduced yields, compromised by high energy prices in transport and production, as well as competition from biofuels for growing land. All these have come to pass. In the last six months, two senior climate scientists, both members of the IPCC, have given figures for the percentage contribution of natural forces to the changes we 2 Referenced in 4(e) of The Corner House’s “Response to ECGD’s letter of 17 May 2010 and Interim Government Response to the Public Consultation on proposed revision to ECGD’s Business Principles and ancillary policies” available at: http://www.ecgd.gov.uk/responses_received_to_the_letter_of_17_march_2010_ecgd_business_principles_and_ancillary_ policies.pdf/ cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w6 Environmental Audit Committee: Evidence

have seen in global temperatures—at 75%. I reckoned CO2 would have contributed at most 20%. There is no real consensus within the IPCC and much less in the wider climate science community on the issue of causation. In brief, in answer to the key questions that the inquiry will examine:

1.01* Whether UK aid avoids exacerbating environmental degradation and worsening climate change The current UK aid programme scores very poorly on “environmental” criteria compared to some other nations. The focus on “economic” goals without criteria appropriate for the world’s poorest people is more likely to exacerbate environmental degradation (soil loss, water stress, rural depopulation) and vulnerability to climate change.

1.02* How well the Aid programme manages the tensions between boosting economic growth and environmental protection The UK scores badly compared to Sweden, Germany and Japan WHERE 50% OF AID QUALIFIES AS ENVIRONMENTAL.....UK SCORES ABOUT 5%.

1.03* The extent to which UK Aid programmes address the environmental causes of poverty, and the extent to which environmental protection and climate change mitigation and adaptation are prioritised in those programmes There is evidence that less than 5% of UK aid contributes significantly to these goals. Adaptation to climate change (which is at least partly natural and unlikely to be mitigated within the next fifty years) should be a priority, yet funding is directed by mitigation strategies which are more easily to implement and impossible to quantify in their stated objective—and many of the mitigation technologies have serious environmental impacts of their own society and biodiversity. These impacts have not been adequately quantified.

1.04* The extent to which environmental protection and climate change mitigation and adaptation have been mainstreamed in the Government’s Aid programmes, including how well DfID’s systems take account of DEFRA’s policies on Biodiversity and DECC’s policies on climate change Government must prioritise adaptation rather than mitigation. By simply allocating several billion of funds already designated for aid, the danger is that only those schemes that can be readily implemented will be actioned and counted as “mainstreamed” and these will almost certainly be mitigation technologies of unproven value to the poorest people (eg wind turbines, biofuel plantations, hydro-schemes, coastal defences). Our impression is that virtually no studies on the impact of mitigation have been made. It should also be noted that studies of the impact of climate change on a regional level are in their infancy— rainfall is the most important factor and this depends upon unquantifiable changes in wind patterns as much as on temperature. Computer models give a spurious sense of prediction.

1.05* Whether there are differences in the environmental impact of DfID’s bilateral work compared with UK- funded multilateral aid or with other programmes which assist developing countries From our review, we would suggest that government should cooperate more with International NGOs, private foundations and trusts that seem to have a better relationship with grass-roots ecological programmes of resilience.

1.06* How the UK’s contributions to the International Climate Finance Fund will be managed, and prospective plans for managing the Biodiversity funding post-Nagoya There needs to be a focus upon practical grass-roots resilience for community and biodiversity—and to learn the lessons of direct project management that exist within the international aid community that is non- governmental.

1.07 The Committee invites organisations and members of the public to submit written evidence, setting out their views on these issues. More wide ranging responses are also welcome. And the Committee would welcome hearing about particular aid projects/programmes which: * specifically aimed to tackle environmental/climate change issues, and did so successfully; * specifically aimed to tackle environmental/climate change issues, but failed to meet such objectives; and * harmed the environment and/or exacerbated climate change mitigation/adaptation Ethos made some recommendation in the accompanying book—please refer to sections on pages 57–65. We are of the opinion that much more needs to be done on identifying successful best-practice at grass-roots level and what is really needed at that level. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w7

Summary: Questionsof Resilience

Background to this publication

In April 2010, Peter Taylor was engaged by the Lifeworks Foundation to investigate and comment upon the structure and trends of international humanitarian aid. The Foundation has an interest in several innovative eco-agricultural technologies as well as social tools for visioning within developing organisations.

Ethos is publishing an edited version of this report for wider circulation in order to stimulate discussion around the nature of resilience in a changing physical, social and economic climate. Our focus is upon global communities currently in receipt of development aid and questions that arise as to the effectiveness of that aid.

2.01 The key conclusions of the report to Lifeworks were:

Regarding the structure of aid: — there has been significant growth in development aid, both official and private, over the last decade—in most sectors by a factor of three and in some sectors a fourfold increase (Annex 1, tables 1–2); — nearly all official aid goes to in-country government programmes with some cross-over aid to International NGOs; — the private sector, though small in the UK and Europe, plays a significant role in helping in-country NGOs and community initiatives directly; private aid flows from the USA are much greater than other OECD countries (for example, about 30 times the UK figure); — however only about 10% of this aid is directed at the most basic level of human needs: food, water and sanitation; most aid is directed at general elements of social progress and is based on the assumption that the best way to help people in poverty and ill-health is to improve the economy; — an even smaller proportion, 2–5% is directed at sustainable agricultural practices; — there is a wide divergence in the amount of aid that is described as “environmental” with the UK performing badly in this regard at less that 5% of official aid compared to Japan, Germany and Sweden at around 50%; there are conflicting indications showing both recent growth of environmental funding and a decline—depending upon definitions; — there is a marked tendency for “climate change” issues of mitigation and adaptation to take over priorities for funding—the former likely to detract from basic livelihoods and the latter with a potential for considerable increases in aid, though currently without a clear appreciation of priorities; and — the programmes that are most advanced in terms of eco-agriculture, sanitation, small-scale energy, micro-finance and integrated development are funded by private foundations.

2.02 Regarding potential global programmes of best practice: — there has been a significant shift toward evaluating the “effectiveness” of aid and a rise in awareness relating to the importance of in-country knowledge and partnerships; — several private foundations in the UK already have programmes in operation which illustrate some best practices with networks of management and analysis, some in collaboration with other foundations or International NGOs (for example in sustainable agriculture and forestry). The key projects are mostly in Africa and India, but there are also some in South America and South- East Asia; — In the UK there are networks of funding foundations that meet regularly on a peer-to-peer basis and discuss priorities and collaboration; there are also professional networks within the realm of eco-sustainable development with regular workshops and conferences—these appear to be better developed in the USA.

2.03 Unknown Factors: — The current global economic and financial crisis is far from over and this has major implications for aid streams and the promised funding both for the Millennium Goals and for Climate Change programmes; — Short-term commitments for climate change funding have already usurped funds from the main development aid streams in the UK; and a great deal of this funding is aimed at “mitigation” of the perceived threat, rather than adaptation—there is ample evidence that where vulnerable communities are concerned, adaptation should be a priority; — However, the future for long-term climate change funding is extremely uncertain both because of the large size of the commitment and recent uncertainty in the basic science of climate prediction— this uncertainty is unlikely to be resolved before December 2010, in the COP16 meeting in Cancun, Mexico. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w8 Environmental Audit Committee: Evidence

2.04 Recommendations: — Ethos recommended Lifeworks pursue ideas of micro-cluster development techniques and technologies for soil treatment and eco-sanitation, combined with its interest in small-scale energy supply, water, health and education—with the aim of developing a package that could be tested in a variety of situations; new and innovative technologies need to be tested in many different ecological and social settings—particularly revolutionary soil treatment systems using microbial balancing technology (MBT). Such integrated development packages appear to be unusual—at least with respect to the issues of sanitation, soil, nutrition, energy and small-scale businesses. — An integrated package would have access to a wide spectrum of funding streams both within the private sector but also potentially from government: it would register on issues relating to health and education, water and sanitation and capacity building in the social-capital sector; — Such an aid—project could be initiated as “trial and evaluation” with several pilots in varying conditions in Africa, Asia and South America—perhaps over a three year period. (Ethos notes that Lifeworks intends to raise finance from a commercial roll-out of MBT technologies in a global fund which would enable poorer communities to build their own facilities and run their own trials). — At a village and local school level the projects could include modern internet communications, “twinning” with UK schools, developing the concept of “mirror communities” and a global outreach, particularly of shared experience; — Innovative funding “aggregators” have developed “portals” to giving as exemplified by Global Giving and these represent an advanced form of communications and access to public donors— these technologies could be made more specific and used to create a focus for eco-sustainable agricultural projects.

Questions of resilience: — In our research on the Lifeworks project we have been struck by how little aid is directed at the populations most vulnerable to climate change, economic instability and rising costs of oil; — The development strategies currently in place are widely acknowledged as failing these most vulnerable populations; — Future development strategies appear firstly, not to have taken on board the implications of ever rising costs of transport and the instabilities of the global economy; and secondly, not to be addressing the expected population rises in these vulnerable communities, with attendant stresses on water, food supply and biodiversity; — The continual promises to raise the profile of climate-change adaptation have yet to produce a coherent strategy beyond the same development model that has so far failed these most vulnerable people; — We recommend that a new approach is developed within the development aid community that focuses upon resilience—this would entail developing a no-regrets strategy with regard to the directions of climate change, enhancing robustness to change at a systems level; — Such an approach would gather practical examples of best practice in various countries under differing ecological and social regimes and identify their needs—whether of further development aid, or protection from the development process; — We recommend that a network of best practice is developed and maximum use made of modern media and communications to empower lateral community-to-community connections in developing countries as well as with mirror communities in developed countries; — We also recommend that a joint approach is sought with the global financial community to bring more ecologically sound investment to the world’s poorest peoples, making use of the lessons of micro-credit, global giving portals, and ecologically sound banking. 15 December 2010

Written evidence submitted by Professor Harriet Bulkeley and Dr Vanesa Castan Broto, Department of Geography, Durham University

Summary — Global cities are important sites within which to address climate change. Emerging policies, especially the World Bank WDR and recent work at UN-Habitat, signal a growing interest in engaging with cities in the Global South and climate change. — A survey of 628 climate change experiments (or initiatives to provoke social and technological transformations) found that climate change action is being taken in cities around the world. These experiments emerge in different sectors such as water, energy and waste management infrastructure, urban form, transport, housing and urban greening. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w9

— Most of these actions are led by local authorities. However, other actors intervene in the urban sphere, including state or national authorities, private actors, NGOs and community-based organisations. — Within the database, 254 experiments are found in the Global South. Of these, only a small percentage is funded by international or bilateral donors (10%). Another 6% are funded by private foundations or non-governmental originations operating internationally (such as for example, the Clinton Foundation, the Shell Foundation or WWF). — The data suggests that there is currently limited involvement by both international organisations and bi-lateral donors in transformative action for climate change within global cities. The data, however, should be read with care as it is possible that international aid is not reported at the level of the city. Nonetheless, our evidence suggests that cities are not on the agenda as a critical site for addressing climate change. — Our recommendation is that DFID examines its policies of investment in urban areas regarding climate change and explores the potential for focusing on urban areas as sites within which to address climate change. If DFID is to have greater impact on climate change action in the city, we suggest that there are opportunities for collaboration with local governments and, when these are absent or inoperative, with community-based organisations, NGOs and private actors who intervene in the provision of sustainable housing, infrastructure and mobility.

1. Introduction 1.1 This memorandum presents data from an ESRC project on Urban Transitions: global cities, climate change and the transformation of socio-technical systems and explains the relevance of its findings for the inquiry on The impact of UK overseas aid on environmental protection and climate change adaptation and mitigation. Urban Transitions is a three-year project examining the ways in which cities around the world are responding to climate change. This project analyses how cities are addressing climate change through their energy and housing systems, and the social and technical factors that are shaping the possibilities for urban transitions in the face of a changing climate. The project is based at the Geography Department at the University of Durham. 1.2 The project focuses on global cities as sites where climate change can be addressed. Cities are vulnerable to the impacts of climate change. They are also sites where emissions of greenhouse gases are concentrated. This means that urban responses are critical for successful strategies for adaptation and mitigation. 1.3 Vulnerability is particularly acute in cities, especially those with exposure to core climatic hazards including flooding, drought, water-borne disease, and where levels of informality are high (IPCC 2007). The impacts of climate change within cities will be uneven, and it is important to note that in particular “vulnerability to [climate-related] disaster and to the impacts of gradual GEC [global environmental change] erodes the rights and opportunities of the urban poor” (Parnell et al. 2007: 358). 1.4 As the global population urbanizes, cities are increasingly concentrating activities that lead to the production of greenhouse gases, with some estimates suggesting that cities are responsible for over 70% of the carbon dioxide related emissions from energy use (IEA 2008). The International Energy Agency predicts that by 2030, 80% of the increase in global annual energy demand above 2006 levels will be from cities in non- OECD countries (IEA 2008). 1.5 While cities are a critical dimension of the climate change problem, they also present numerous opportunities to address climate change, in particular (adapted from Bulkeley and Castán Broto, 2011): — Municipal authorities have responsibility for many processes that effect GHG emissions at the local level and for many process related to risk and disaster management. — Municipalities can act as a “laboratory” for testing innovative approaches. — Municipal authorities can act in partnership with private and civil society sectors. — Cities represent high concentrations of private sector actors with growing commitment to act on climate change. — Cities provide arenas within which civil society is mobilising to address climate change. 1.6 However, until now, it appears that there has not been enough emphasis on the importance of cities and the urban agenda in climate change adaptation and mitigation, especially in terms of overseas aid. This reflects a legacy where the climate change challenge in the Global South has been equated with adaptation and the focus has been on poor rural communities, regarded as particularly vulnerable. As the evidence concerning the vulnerability of urban communities and the imperative of the low carbon transition in these cities gather strength, it is imperative that development organisations tackle the urban climate change agenda. 1.7 There is evidence globally that this picture is now changing. The importance of cities in climate change mitigation is being recognised by international development organisations. For example, according to the World Bank’s World Development Report 2010 (WDR) on Development and Climate Change cities open up opportunities to build a low carbon future. Dealing now with urbanisation, the WDR argues, may contribute to both managing climate change associated risks and reducing carbon emissions (World Bank 2009). cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w10 Environmental Audit Committee: Evidence

1.8 In the next sections we outline the evidence for how cities in the Global South are responding to climate change and the role that development aid has so far played in this critical transformation. We present a survey of climate change experiments in 100 global cities, focusing on the donors behind some of these initiatives in the global South. We conclude that there is a need for an analysis of the impact of overseas aid in terms of its role in encouraging city-based actions for climate change, and suggest that DFID should consider an explicit urban focus in their future work on climate change adaptation and mitigation.

2. Climate Change Experiments in 100 Global Cities 2.1 The Urban Transitions project has developed a database of climate change experiments in 100 global cities. By experiments we mean initiatives that attempt to create a significant or systemic change towards low carbon and resilient societies. The scoping study focused on a sample of 100 global cities around the world. The cities were selected according to six indicators: population, density, role in the world economy, total GDP, recognised vulnerability to climate change and active participation in climate change city networks. 2.2 The database was designed to record the aims and governance of projects or experiments that are explicitly seeking to address climate change, to catalogue the technologies being deployed, the institutional arrangements and policy instruments being developed, and the impacts of projects to date. Data was collected from the Internet, relying on self-reported information about each project and additional published sources where this was available. The search explored initiatives taken by local authorities and regional and national governments as well as by private and civil society organisations. However, the initiatives selected were limited to those having an explicit urban rationale and specifically designed to address climate change. 2.3 In total the database contains records for 628 experiments. From this sample, 254 experiments are in cities in either developing or middle-income countries. Contrary to expectation, experiments were not concentrated in developed countries but emerged in many parts of the World. Most experiments were found in urban infrastructure (especially energy), the built environment (including housing, public and commercial buildings) and transport (see Figure 1).

Figure 1 PERCENTAGE OF INITIATIVES IN EACH URBAN SECTORS CONSIDERED IN THE DATABASE

2.4 Most of these climate change experiments were led by local governments, highlighting the important role of local governments in leading climate change action (Figure 2). However, a number of other actors can also influence climate change action in the city. For example, adaptation actions are often led by the national government, probably under the influence of National Adaptation Plans. NGOs, community-based organisations and the private sector are also increasing influence in leading climate change action. In particular, the private sector has an important role in developing sustainable urban infrastructure in global cities in East Asia in countries such as China or India. The presence of international organisations in leading climate change experiments within global cities appears to be marginal. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w11

Figure 2 Leading Actors In Each Sector Of Climate Change Experimentation

2.5 This data suggests that there is a lot of climate change experimentation in global cities around the world, North and South and led by a variety of actors. The presence of aid agencies in urban climate change experiments, however, is limited.

3. Urban Climate Change Experiments and Donors’ Agendas 3.1 In compiling the information for the database we attempted to compile data about the donors for the initiatives in each case, although this information was not always readily available. In the cases in which the information about who funded the initiative was not clearly stated, we have inferred the source of funding from the data available. 3.2 Municipalities continue to be the main source of funding for climate change experiments (they appear to be funding 47% of the urban climate change experiments in cities in the global South) (Figure 3). We tracked three types of actors linked to the international aid development establishment: international organisations (such as the World Bank, International Banks and the UN); bilateral organisations; and international NGOs and Private Foundations (Table 1). Together they fund a mere 16% of all initiatives. International organisations contribute 6% of the projects, and 4% can be attributed to bi-lateral cooperation (of the type that DFID contributes). Private foundations such as the Clinton Foundation, have had a big influence in promoting climate change action in global cities; also, some international NGOs such as WWF and Friends of the Earth are also working with cities. Together they have contributed to fund about 6% of urban climate change experiments in our database. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w12 Environmental Audit Committee: Evidence

Figure 3 MAIN DONORS FOR URBAN CLIMATE CHANGE EXPERIMENTS IN THE GLOBAL SOUTH

3.3 Overall, this data suggests the intervention of international aid donors in climate change experiments in cities in the global South is marginal, compared with the intervention of other actors whether this is leading initiatives or providing resources to complete them. It is important to consider, however, that there may be important aid projects which influence urban infrastructure development and housing projects in relation to climate change but which are not reported as being city-based projects. 3.4 This suggests that although the theme of cities and climate change has risen in the international development policy agenda, its impact on the city itself is still limited. Germany’s GTZ has launched research program called Future Mega-Cities (http://www.future-megacities.org/ ) to research the sustainable mega-cities of tomorrow. However, the impact of these projects is limited. Firstly, they concentrate on developing new knowledge and processes rather than in implemented specific actions that can bring about a palpable reduction of GHGs emissions and adaptation. Secondly, there is a time lag between the development of research and the implementation of sustainable practices. Table 1 DONORS THAT CAN BE LINKED TO OVERSEAS DEVELOPMENT AID FOR URBAN CLIMATE CHANGE EXPERIMENTS Number of experiments Donor type and name in the database Bilateral Cooperation 11 British Embassy in Jakarta 1 Denmark and Norway Cooperation 1 Future megacities programme of the German government 1 Govt of Japan, loan repayable in 40 yrs 1 Shell Foundation and Dutch Ministry of Foreign Affairs in the first phase (later 1 Municipality and EMBARQ to pay each 50%, looking now for resources from WB, GEF and UNEP) Spanish cooperation agency 1 Swiss Agency for Cooperation and Development 1 US Army 1 USAID 2 USAID and German cooperation 1

Foundation 14 Climate Bridge 2 Clinton Foundation 5 cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w13

Number of experiments Donor type and name in the database Friends of Nature 1 Prince Salman Charity Housing Trust 1 SouthSouthNorth 3 Sustainable Energy Africa 1 WWF 1

International Organisation 15 Asian Development Bank 2 European Union 1 Global Environmental Fund and WB 1 Institute IHE-Unesco 1 Interamerican Development Bank 5 International Bank for Reconstruction and Development 3 Netherlands-Interamerican Development Bank (Partnership for the Environment) 2

3.5 In contrast, cities such as Mexico City (Mexico) or Cape Town (South Africa) are moving forward with climate change action plans that contain adaptation and mitigation actions aligned with municipal priorities and feasible, so that they can already show some of the results of these measures. In some cases, however, it has to be noted that many of the actions taken by local government for climate change constitute a mere repackaging of existing sustainable development practices or easy attainable actions often referred to as “low hanging fruit”.

4. Recommendations 4.1 We believe that cities are key sites to address climate change mitigation and adaptation and thus, we think that overseas aid should reflect this as one of its priorities. In this case, we have reviewed the emergence of climate change experiments in global cities. However, this contributes to an established literature on climate change action in medium-sized cities which also needs to be taken into consideration (eg Bulkeley 2010). 4.2 In order to maximise impact, means of cooperation should be developed with the organisations able to lead a systemic change towards low carbon and resilient cities. Often, municipal authorities are best placed to deliver climate change action in transport and urban infrastructure. However, opportunities for collaboration may emerge with other actors who may deliver climate change action in specific sectors. For example, there is an established record of community-based organisations led housing projects (see examples in http:// www.bshf.org/wha/housing-projects.cfm?lang=00). Also, non-government actors may be better placed to act in places where the local government is under-resourced or not institutionally developed. 4.3 We conclude that cities are an increasingly important site in which the possibilities for adapting to and mitigating climate change needs to be addressed. Further evidence is needed concerning the role of international development aid and policy on shaping urban capacity to respond to this “urgent agenda” (The International Bank for Reconstruction and Development/The World Bank2010). Nonetheless, our initial findings suggest that there is significant potential for development agencies, including DFID, to work with other partners in addressing climate change in cities in the Global South. 4.4 For further information, please see: http://www.geography.dur.ac.uk/Projects/urbantransitions

References Bulkeley, H (2010). Cities and the Governing of Climate Change, Annual Review of Environment and Resources, Vol. 35: 229–253. Bulkeley, H and Castán Broto, V (2011). Chapter 5: Cities and Climate Change Mitigation, in UN-Habitat, Cities and Climate Change—Global Report on Human Settlements 2011, London: Earthscan. IEA (2008) World Energy Outlook 2008 Paris, International Energy Agency. IPCC (2007) IPCC Fourth Assessment Report: Climate Change 2007 (AR4)—Synthesis Report, Geneva: IPCC Parnell, S, Simon, D, and Vogel, C (2007). Global environmental change: conceptualising the growing challenge for cities in poor countries, Area, 39(3): 357–369. World Bank (2009) World Development Report 2010: Development and Climate Change, Washington DC: World Bank. The International Bank for Reconstruction and Development/The World Bank (2010) Cities and Climate Change: An Urgent Agenda, Washington DC: World Bank. 16 December 2010 cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w14 Environmental Audit Committee: Evidence

Written evidence submitted by the Population and Sustainability Network

Introduction

1. The Population and Sustainability Network (PSN) welcomes the Environmental Audit Committee’s enquiry and fully supports this work to ensure that UK aid promotes environmental sustainability and climate change adaptation and mitigation. In our submission we would like to bring to your attention the opportunities that exist to advance environmental protection and climate change adaptation in developing countries, through integrating a focus on population issues into UK environmental and climate change aid programmes. We believe that the EAC is well-placed to promote work of this kind across the environmental, health and development sectors and is grateful for this opportunity to contribute to this consultation.

2. This submission outlines briefly how advancing voluntary, rights-based family planning in countries where there is a vast unmet need for contraception would contribute to environmental protection, climate change adaptation, poverty reduction and protection of biodiversity, and in doing so increase the effectiveness of UK aid by addressing multiple key development priorities. Through discussion of programmes that have successfully integrated population, health and environmental goals and outcomes, we seek to provide good practice case studies which serve as potential models for this integrated approach.

3. Summary — There is strong evidence to show that high rates of population growth in developing countries are linked to environmental degradation, loss of biodiversity, heightened vulnerability to climate change and sustained poverty. — Many least developing countries impacted by climate change have identified that population growth is increasing their vulnerability to the impacts of climate change and undermining their capacity to adapt. As such, developing countries characterised by high population growth and high vulnerability to climate change should be supported to integrate voluntary family planning into the climate change adaptation strategies.3 — Advancing voluntary family planning in countries with a high unmet need for contraception can promote environmental protection, support adaptation to climate change and contribute to poverty alleviation. — Increasing access to family planning is a cost-effective way of achieving progress towards the Millennium Development goals, and offers opportunities to increase the overall effectiveness of UK overseas aid. — Integrated population, health and environmental programmes have the capacity to contribute to sustainable development, by promoting conservation of the natural environment at the same time as advancing the health, rights and development of local communities. We recommend that integrated, cross-sector projects of this kind are promoted via overseas aid, to support conservation and wider sustainable development goals, as well as to increase the capacity of developing countries to adapt to climate change. We have include examples of these in paragraphs 22 and 23, including a programme in Madagascar combining marine conservation with community-based family planning services, and mobile health clinics serving nomadic communities in remote and fragile environments in Kenya.

Population and theUnmetNeed forFamilyPlanning

4. According to the 2008 UN population projections, the world population will reach seven billion in 2012, up from the current 6.8 billion, and surpass nine billion people by 2050. Most of the additional 2.3 billion people will enlarge the population of developing countries, from 5.6 billion in 2009 to 7.9 billion in 2050.4 Overall 97% of population growth between 2009 and 2050 will be in developing countries.5 Currently the population of the less developed regions as a whole is still young, with children under age 15 accounting for 30% of the population and young persons aged 15 to 24 accounting for a further 19%.6 In the least developed countries the average population growth rate between 2005 and 2010 was 2.3%, and with an annual growth rate of 2% a will double in 30 years.7 3 Bryant, L, Carver, L, Butler, C D and Anage, A (2009). Climate Change and family planning: least-developed countries define the agenda. Bulletin of the World Health Organization, 87, pp. 852–857. 4 United Nations (2009). World Population Prospects: The 2008 Revision. New York, United Nations, Department of Economic and Social Affairs, Population Division. 5 Population Reference Bureau (2009). World Population Highlights: Key Findings from PRB’s 2008 World Population Data Sheet. Washington: PRB. 6 United Nations (2009). World Population Prospects: The 2008 Revision. New York, United Nations, Department of Economic and Social Affairs, Population Division. 7 UNFPA (2010). State of the World Population 2010: From Conflict and Crisis to Renewal: Generation of Change. New York: UNFPA. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w15

5. Worldwide there is a vast unmet need for family planning, with an estimated 215 million women worldwide who want to avoid pregnancy but do not have access to contraception.8 An estimated 41% of all pregnancies worldwide are unplanned.9 In many West African countries, including Niger and Nigeria, less than 10% of all married women are using modern contraception.10 The longer birth intervals and lower fertility that would result from addressing this unmet need and preventing unplanned births would have significant cost saving effects for other development goals. For every dollar spent in family planning, between 2 and 6 dollars can be saved in interventions aimed at achieving other development goals.11 This contributes to poverty alleviation by reducing population growth, which for example reduces the costs of public service delivery and eases pressure upon natural resources. Prioritising family planning is therefore an extremely cost effective intervention, with wide-ranging benefits, including contributions to environmental sustainability. 6. Lack of access to family planning and the resultant rapid population growth in developing countries is undermining development and is associated with high levels of poverty, poor health and education outcomes, environmental degradation and loss of biodiversity.12 Population growth and density place extreme pressures upon the natural environment in many developing countries, leading to depletion of natural resources, including land, water and biodiversity, and heightening vulnerability to climate change.13

Population,EnvironmentalDegradation andLoss ofBiodiversity 7. Rapid population growth and high population density in developing countries is strongly correlated with environmental degradation and increasing scarcity of natural resources. Acting in tandem with climate change in some countries, rapid population growth increases demand for natural resources, often combined with poor environmental management and results in intensified agriculture and use of land and water supplies. This in turn depletes the natural resource base, including water, fuel, soil fertility and biodiversity.14 8. As a result of rapid population growth, overcrowding and increasingly climate change, poor individuals are forced to inhabit or migrate to, the most ecologically fragile areas. These areas are unable to sustain high population densities and are particularly vulnerable to degradation and depletion of the natural resource base. Population growth in Ethiopia for example, is resulting in soil degradation, the decreasing size of land holdings and declining agricultural productivity. This is causing poor people to move to more environmentally marginal areas, or to urban areas, causing unsustainable use and exploitation of natural resources and leading to a vicious cycle of poverty and environmental degradation.15 9. In recent years evidence has grown of the links between high rates of population growth and loss of biodiversity. A study of population dynamics in 25 areas of the world identified as “biodiversity hotspots”, found that population growth rates in these areas are significantly higher than the population growth rate of the world as a whole, and above the average for developing countries. The study concludes therefore that; “substantial human-induced environmental changes are likely to continue in the hotspots and that demographic change remains an important factor in global biodiversity conservation.” This points to the potential conservation gains that could be made by increasing access to voluntary family planning in areas with high levels of biodiversity and an unmet need for contraception.16

LinksBetweenPopulation andClimateChange 10. The interaction between climate change and population dynamics, and the associated implications for the poorest countries of the world, is complex but highly significant for climate change adaptation and mitigation. 11. Climate change makes discussion of population and consumption difficult, because it is consumption in the North that is driving climate change, while it is the countries of the South that will be most affected. PSN contends, however, that the connection between population dynamics and climate change will be a critical flashpoint of the future; the connection is complex and controversial, but it is critically important—in a world where one third of the world’s population lives within 60 miles of a coast, and 13 of the world’s 20 largest cities are on a coast, moving people away from the sea will become important, and a task far easier to achieve if families have the number of children they want, and not a few or even many additional ones because contraceptive services were not available. 8 Singh, S, J E Darroch, L S Ashford, and M Vlassoff (2009). Adding it Up: The Costs and Benefits of Investing in Family Planning and Maternal and Newborn Health. New York: The Guttmacher Institute. 9 Guttmacher Institute (2009). Abortion Worldwide: A Decade of Uneven Progress. New York: The Guttmacher Institute. 10 Population Division, UN. World Contraceptive Use (Wallchart) 2007. 11 Moreland, S & Talibard, S (2006). Achieving the Millennium Development Goals: The contribution of fulfilling the unmet need for family planning. Washington D. C: USAID. 12 Population and Sustainability Network (2010) Population Dynamics and Poverty Reduction: A PSN Briefing Paper. Available at: http://www.populationandsustainability.org/293/articles-and-reports/articles-and-reports.html 13 Stephenson, J, Newman, K and Mayhew, S (2010). “Population dynamics and climate change: what are the links?” Journal of Public Health, 32, 2, pp. 150–156. 14 Stephenson, J, Newman, K and Mayhew, S (2010). “Population dynamics and climate change: what are the links?” Journal of Public Health, 32, 2, pp. 150–156. 15 Stephenson, J, Newman, K and Mayhew, S (2010). “Population dynamics and climate change: what are the links?” Journal of Public Health, 32, 2, pp. 150–156. 16 Richard P Cincotta, Jennifer Wisnewski & Robert Engelman (2000). “Human population in the biodiversity hotspots”Nature 404, pp.990–992. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w16 Environmental Audit Committee: Evidence

12. Interestingly, while Northern countries wonder whether it is ethical to link population growth with climate change, developing countries are themselves open about the links; a recently published study undertaken by PSN and MSI, which analysed 40 National Adaptation Programmes of Action (NAPA), and found that no fewer than 37 identified population growth as one of the factors confounding their attempts to adapt to the effects of climate change.17 13. In the NAPAs the most frequently mentioned climate change adaptation issues that are exacerbated by population growth are: soil degradation and erosion, fresh water scarcity, migration, deforestation and shortages of farm land. Additional vulnerabilities linked to population growth include loss of biodiversity and natural habitat, desertification and diminishing fish stocks. 14. Increasing access to voluntary, rights-based family planning offers opportunities to reduce vulnerability to climate change, and we therefore encourage the EAC to promote and increase awareness of this potential strategy as part of the UK overseas aid, as well as within the wider international response to climate change. With population growth identified by many developing countries as a factor contributing to their vulnerability to climate change, developing countries that are characterised by rapid population growth and high vulnerability to climate change should be supported to integrate family planning into their adaptation programmes.18

LinksBetweenPopulationDynamics,Poverty andEconomicGrowth 15. Given the enquiry’s focus on “the tensions between boosting economic growth and environmental protection”, it is relevant to consider the role that high rates of population growth in developing countries play in inhibiting economic growth and poverty alleviation. Population dynamics are linked to key determinants of poverty including health, nutrition, education, gender, and significantly, economic development. Over the past few decades, rapid population growth has been associated with high levels of poverty.19 Countries with rapid population growth tend to have the highest incidence of poverty and lowest levels of human development. In countries with low levels of economic development, high populations grow rates place increasing pressure on national resources and public services, reducing the government’s capacity to meet the basic needs of its citizens and undermining development.20 16. In countries with rapid population growth the age structure is disproportionately young, which has implications for economic growth. A large proportion of the population made up of dependents under the age of 15, relying on those of working age and requiring a large share of the available resources, constricts income and economic opportunities at the household and societal level, inhibiting economic growth.21 Countries with a larger proportion of the population of working and saving age can enhance income growth as a result of capital accumulation. Less income is spent on dependents because a large share of the population is economically active. Known as the “demographic dividend”, this can fuel economic growth if supported by effective policies. A crucial means of accelerating demographic transition is investment in effective family planning programmes, which can enhance economic gains and “lift nations out of a cycle of poverty”.22 17. The significant cost savings that can be made for meeting other development goals, as a result of the longer birth intervals and lower fertility that would result from investments in family planning to address this unmet need for family planning have already been outlined in paragraph 5. With every dollar spent in family planning saving between 2 and 6 dollars in interventions aimed at achieving other development goals.23 An increased focus within UK overseas aid on increasing access to family planning would therefore not only contribute to environmental protection, but also increase the overall effectiveness of aid, by contributing to the achievement of wider development goals. 18. While consideration of population issues and increased access to voluntary family planning is imperative for poverty reduction, environmental protection and sustainable development, the complexity and sensitivity of these issues mean that they are often ignored. This is partly due to the historical legacy of the mistakes of the coercive “population control” programmes in the 1960s. It is also due to the fact that 95% of global population growth is taking place in the global South, and yet it is countries of the global North that consume the vast majority of the world’s resources. These complexities and sensitivities are only increased by those associated with population and climate change issues. Yet as the enquiry sets out, the burden of the impacts of climate change are falling disproportionately upon developing countries, and given that developing countries 17 Bryant, L, Carver, L, Butler, C D and Anage, A (2009). Climate Change and family planning: least-developed countries define the agenda. Bulletin of the World Health Organization, 87, pp. 852–857. 18 Population and Sustainability Network (2010) Population Dynamics and Climate Change: A PSN Briefing Paper. Available at: http://www.populationandsustainability.org/293/articles-and-reports/articles-and-reports.html 19 De Souza, R-M (2006). Reducing Poverty by Integrating Poverty, Health and the Environment. Washington, DC: The Population Reference Bureau. 20 Population and Sustainability Network (2010) Population Dynamics and Poverty Reduction: A PSN Briefing Paper. Available at: http://www.populationandsustainability.org/293/articles-and-reports/articles-and-reports.html 21 Bloom, D, D Canning, J Sevilla (2002). “Banking the ‘Demographic Dividend’: How Population Dynamics Can Affect Economic Growth”, Population Matters Policy Brief. 22 Bloom, D, D Canning, J Sevilla (2002). “Banking the ‘Demographic Dividend’: How Population Dynamics Can Affect Economic Growth”, Population Matters Policy Brief. 23 Moreland, S & Talibard, S (2006). Achieving the Millennium Development Goals: The contribution of fulfilling the unmet need for family planning. Washington D. C: USAID. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w17

themselves are identifying population growth as a factor heightening their vulnerability to climate change24 there is an urgent need to address the silence over population issues. 19. In the next section we focus on the potential that integrated population, health and environment (PHE) approaches have for promoting sustainable development, while overcoming the sensitive issue of population growth through the promotion of reproductive health and choice and providing communities with access to the health services that they want and need.

Integrated Population, Health and Environment Approaches 20. In recent years specific collaborative projects between the environment, development and reproductive health sectors have demonstrated the benefits that can be achieved for conservation and communities through integrated Population, Health and Environment (PHE) approaches, addressing the complex interactions between people, their health and the natural environment. These projects seek to improve access to health services, including access to voluntary family planning services, while helping communities to manage natural resources in ways that improve their health, livelihoods and conserve the ecosystems that they depend upon. Projects of this kind are being undertaken, sometimes with support from USAID, in regions critically important to the conservation of biologically diverse ecosystems, yet where high rates of population growth and low access to family planning are undermining environmental sustainability. Many of these projects operate in remote areas, and bringing family planning to these communities has helped couples to achieve the family size they desire, simultaneously contributing to more sustainable use of natural resources, and contributing to the well-being of families and the community at large.25 21. Integrated PHE programmes can include a wide variety of interventions, according to community needs and local capacity. Some examples include:26 — sustainable agriculture for improved child nutrition and food security; — community-based distribution of family planning commodities; — reduction of indoor air pollution and logging through promotion of fuel-efficient stoves; — improved access to safe water for household use; and — improved management of protected areas. 22. To demonstrate the links between population, development and environmental protection, and to provide good practice models for this integrated approach, PSN is supporting several programmes of this kind: (a) The island state of Madagascar has one of the fastest growing populations in the world, high rates of maternal mortality, and only one in five women in a sexual relationship have access to contraception. Population growth is exacerbating depletion of the natural marine environment upon which the population depends for livelihoods and food security. It is also heightening vulnerability to climate change. A PHE programme in Madagascar is addressing the unmet need for family planning at the same time as promoting management of the natural marine environment, thereby reducing poverty and vulnerability to climate change. (b) In Kenya, women have on average five children each and 25% of married women of reproductive age want to space or limit births but don’t have access to family planning. A PHE programme to address this need, at the time as reducing the pressures that population growth is placing on the natural environment consists of Mobile Health Clinics serving nomadic and isolated rural communities. Providing reproductive health and HIV/AIDS services, immunisation and basic curative health care and education, health teams travel by four-wheel drive, bicycle, camel and foot. Each year they are able to make over 60,000 visits and provide family planning to over 2,000 women annually. The health teams are run with two African organisations, the Nomadic Community Trust & Community Health Africa Trust, working in partnership with community-based representatives, the Ministry of Health and other NGOs.27 Further information about these projects is available on our website at: http:// www.populationandsustainability.org/46/model-projects/model-projects.html 23. We strongly encourage EAC to encourage the integration of environmental, sustainable development and population issues. DFID and UK overseas aid is well placed to promote integrated projects and multi-sectoral collaboration of this kind, which offer scope to increase aid effectiveness by linking a range of connected issues. DFID, for example could promote this work through flexible funding streams, and play an important leadership role in ensuring that climate change adaptation funding mechanisms identify family planning as being among a range of eligible strategies facilitating country efforts to adapt to the effects of climate change. 24 Bryant, L, Carver, L, Butler, C D and Anage, A (2009). Climate Change and family planning: least-developed countries define the agenda. Bulletin of the World Health Organization, 87, pp. 852–857. 25 USAID (2010). “Population, Health and Environment”, Population Health and Environment Project, available at: http:// www.ehproject.org/phe/phe.html 26 USAID (2010). “Population, Health and Environment”, Population Health and Environment Project, available at: http:// www.ehproject.org/phe/phe.html 27 Mobile Clinics Africa, see: http://www.mobileclinicsafrica.org/ cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w18 Environmental Audit Committee: Evidence

24. Integrated Population, Health and Environment projects strongly demonstrate that addressing concern about global population growth is not incompatible with respecting and protecting human rights; indeed intensifying efforts to secure universal access to sexual and reproductive health and rights is an effective way to advance and uphold these rights, provided that they are respected in the way that services are designed and offered.

25. About Population and Sustainability Network The Network is an international advocacy group which aims to bring together development, environment and reproductive health NGOs, government departments, academics, policy makers and others, to increase leverage on population issues. It endeavours to provide a “space” in which different constituencies can learn from each other. The intention is that such increases in understanding of the issues will inform the strategies and activities of Network members, and bring population issues higher up the policy agenda in a range of other organisations. A central aim of the Network is to increase public and professional understanding of the inter-relationship of the key issues and their importance in addressing sustainable development, poverty reduction and climate change both in the rich minority world and in the majority world. In addition, the Network aims to explore the barriers that inhibit discussion about and action on these issues and, finally, to promote processes that increase participation and exchange between the various stakeholders. The Network is predominantly UK based, but it encompasses an increasingly broad range of overseas organisations. It was launched as a United Nations Commission for Sustainable Development Partnership at CSD 12 in New York in April 2004. Our guiding principles are: — The rights of women and men to choose to plan their families must be safe-guarded where they already exist and promoted where they do not; — Coercive family planning practices should not be tolerated. 16 December 2010

Written evidence submitted by Plan International UK UK Aid in the past five years has significantly contributed towards reducing impacts of environmental degradation and climate change for those who suffer them most. The focus of DFID on Disaster Risk Reduction is one strong example of this. With DFID’s support, communities around the world have strengthened their resilience to environmental shocks and stresses, and in turn been able to continue making progress with development. Moving towards a focus on economic growth in development does not require this trend to change. On the contrary, part of ensuring sustainable economic growth is building-in principles of sustainable development and climate and disaster resilience. For the long term, this will equip growing economies—and importantly their citizens—with the capacity they need for coping with the escalating frequency, intensity and unpredictability of environmental shocks and stresses. Plan’s work with children and young people in disaster risk reduction and climate change adaptation, funded by DFID, further strengthens the long term view of sustainable, resilient development. Girls and boys represent a large proportion of the population in countries most vulnerable in the face of environmental shocks and stresses. With support, they have shown themselves to be strong actors for building capacities to cope with disasters and develop sustainably, in school, in their communities, and at national and international levels as advocates for change. Through Plan’s programmes, children consistently bring added value as agents of change for reducing risk today, and ensuring a sustainable and resilient future: Firstly, children and young people bring immediate value to resilience-building. Children are accomplished communicators and enthusiastically embrace new technologies for communicating and managing risk. In identifying risks and vulnerabilities children’s views are unbiased, unadulterated by social norms, honest and perceptive. Children keenly monitor the environmental impact of development interventions and are often enthusiastic to ensure that attention to environmental protection shapes the planning and implementation of measures to reduce poverty and develop sustainably. Where parents and teachers may feel bound by priorities which do not allow for “additional” considerations of resilience and sustainability, children learn about these at school or with youth groups and share this new information with their families. Children identify closely with medium and long term perceptions of development and have greater appreciation that resilience and sustainability must be built into existing activities rather than “adding another item” to parents’ lists of priorities. We have found that in this respect many adults trust the voices of their children more than they do those of other adults. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w19

The frequency and intensity of environmental shocks and stresses is increasing worldwide. For development—economic or otherwise—to last, it is crucial that risk reduction is integrated into development practices today; and that the most marginalised and vulnerable are a part of it. DFID’s support for disaster risk reduction work has helped ensure that all stakeholders, including the most vulnerable girls, boys, women and men are involved in decision-making and action to reduce their own risk, cope with disasters, and retain levels of development progress which they are achieving. Prioritising the education and the agency of young people is a fundamental factor in building any society’s capacity to develop sustainably, including adapting to the environmental uncertainties and weather extremes which climate change is bringing. Other environmental shocks and stresses further emphasise the need to understand and address risks in order to develop sustainably. DFID-sponsored disaster risk reduction interventions, including education about risk reduction and environmental awareness, are therefore central to starting children and communities on the road to long term economic growth, and continued sustainable, resilient development. Case Study: Children in the PhilippinesRestore Mangroves Mangroves protect coastal areas from erosion, storm surge during hurricanes and tsunamis, with the ability to absorb up to 90% of the force of wind during a storm. They are also one of the fastest absorbers of carbon dioxide; one tree can absorb 0.35kg of the gas a year. Mangroves are also a great spawning ground for fish and therefore offer aquatic livelihood opportunities. When children in the Camotes Islands took part in a vulnerability risk assessment, one of the first things they saw was that mangroves were being cut down by adults in their community, posing a huge risk for their community’s development resilience. The children decided to act on this by spearheading a community-wide mangrove rehabilitation campaign. With Plan’s support, children and young people initiated a project in which they raised awareness of the effect of mangrove degradation amongst their community and formed teams to replant mangrove trees behind protective barriers. Every week the children would wade into saltwater swamps to plant mangrove seedlings in the mud. In just seven months, the children planted 100,000 mangrove trees covering 10 hectares of land. Secondly, investing in children’s knowledge and capacities28 today will yield significant benefits in the future: through increasing awareness and knowledge about risk, sharing best practice for resilience and sustainable development, and teaching new generations the skills needed to protect and adapt to a changing environment. Integrating principles of resilience and sustainability into education practices today will ensure that innovations and planning by tomorrow’s entrepreneurs and decision makers will be climate smart and appropriate to the different environmental contexts in which they come about. Informed, equipped and supported children today will tomorrow be leaders, teachers, civil servants, parents, corporate workers and pastoralists who understand the principles of sustainable economic growth, and thrive on the outcomes of the implementation of those principles. DFID is increasingly aware of the value for money of investing in a great untapped resource—children and young people, who constitute the largest cohort of the population of most developing countries. These young people will go on to ensure that basic services including healthcare, education, water and sanitation, social protection and transport and communications services, are planned, established and run appropriately for their environmental context and as sustainably as possible. For this to happen, it is crucial that DFID continue its efforts towards climate change adaptation and environmental management, and invest in the increased awareness among children and young people about how to reduce risk and shape economic growth through means which do not threaten to undermine development elsewhere. Disaster risk reduction should be the cornerstone of efforts to manage the tensions between economic growth and environmental protection. It bridges the gap between good development and the need for protection in the face of environmental shocks. As a leading agency in promoting disaster risk reduction, DFID is in a prime position to take advantage of risk reduction measures to build resilience throughout its development work. Plan’s extensive work on child-centred disaster risk reduction,29 further demonstrates the cost benefit of empowering young people today, to enhance resilience and environmental sustainability, and to safeguard progress towards the millennium development goals.

PlanUK Recommends thatDFID 1. Ensure that children and young people are an integral part of the resilience-building process which manages the tension between economic growth and environmental protection, by ensuring young people are systematically included in the design, implementation and monitoring of all DFID programmes and interventions—for building their own resilience, and sustainable futures for everyone. 2. Prioritise access to formal and informal education programmes for communicating the value of sustainable development and resilience-building, for children in all countries where DFID operates, promoting systematic dissemination of knowledge on how to reduce risk, build resilience and adaptive capacity 28 As per Article 6 of the United Nations Framework Convention on Climate Change 29 http://www.plan-uk.org/action/issues/reducingchildrensvulnerability/ cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w20 Environmental Audit Committee: Evidence

to develop sustainably, especially among children and young people, through structures which already exist, particularly within the education sector and public information campaigns. 3. Advocate for, and support civil society to advocate for, cross-sectoral institutional support for children’s agency in sustainable development and resilience building, at both national level in developing countries (including NAPAs) and internationally (including adaptation funding)—through encouraging research, evidence-based advocacy, the two-way transfer of appropriate technology and indigenous knowledge, and the sharing and documentation of practical experience of effective environmental protection and climate change adaptation and mitigation. 17 December 2010

Written evidence submitted by UNICEF UK 1. Introduction 1.1 The UK National Committee for UNICEF welcomes the opportunity to submit evidence to the Environmental Audit Committee Inquiry into the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation. 1.2 UNICEF, the United Nations Children’s Fund, is mandated by the United Nations General Assembly to advocate for the protection of children’s rights, to help meet their basic needs and to expand their opportunities to reach their full potential. UNICEF is guided by the United Nations Convention on the Rights of the Child (CRC) and strives to establish children’s rights as enduring ethical principles and international standards of behaviour towards children. 1.3 This submission will focus on the following questions: — The extent to which UK Aid programmes address the environmental causes of poverty, and the extent to which environmental protection and climate change mitigation and adaptation are prioritised in those programmes. — The extent to which environmental protection and climate change mitigation and adaptation have been mainstreamed in the Government’s Aid programmes. — How the UK’s contributions to the International Climate Finance Fund will be managed. KeyRecommendations — DFID should continue to support resilience and sustainable futures through investing in child focussed climate change adaptation and disaster risk reduction (DRR) programmes. — Climate change adaptation and mitigation activities must be prioritised by the UK government and additional funds provided to support them. — DFID should ensure that all appropriate development activities mainstream climate change. However at the same time, they also must accept that there are new and additional challenges presented by climate change that will require scaled up funding for adaptation and disaster risk reduction. — The UK should make clear its commitment to long term climate finance in late 2011. This should be sourced from innovative sources such as new taxes on the financial sector and be additional to ODA.

2. (a) The extent to which UK Aid programmes address the environmental causes of poverty, and the extent to which environmental protection and climate change mitigation and adaptation are prioritised in those programmes (b) The extent to which environmental protection and climate change mitigation and adaptation have been mainstreamed in the Government’s Aid programmes 2.1 Climate change is a key issue for all development activities. On current trajectories, its impacts will increase even if global emissions are limited. The UK government must ensure an adequate response to it be fit for purpose in the 21st century. 2.2 Climate change disproportionately affects the most vulnerable people in the poorest countries, who are often children, despite the fact that they are the least to blame for the problem. Recent research for UNICEF UK demonstrates the real and growing impact of climate change on children in countries such as Kenya.30 Children are highly vulnerable to these changes, which have the potential to affect many aspects of their lives, including education, health and welfare. 2.3 Climate change also will lead to an increase in the frequency and uncertainty of natural disasters. Investing in effective disaster risk reduction programmes is and will continue to be a key adaptation response to this to ensure the impact of these disasters do not undo or hinder progress in development in vulnerable countries. 30 UNICEF UK, Climate Change in Kenya: Focus on Children, 2010 cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w21

2.4 Spending money on climate change adaptation and mitigation is therefore an effective investment. Without this, the impacts of climate change will undo progress made toward other development goals. For example, the recent UNDP Stocktaking report on the MDGs states that without funding and action on climate change none of the MDGs will be met. We therefore believe that UK government should lead the way in providing support to long term programming to address the causes and impacts of climate change. This will prevent funding for other key development goals being diverted as the impacts of climate change become more urgent, through an increase in natural disasters.

2.5 UNICEF UK welcomes DFID’s recent commitments in their Business Plan to both prioritise climate change as a key element in all their work and seek to ensure “climate compatible development”—minimising harm from the impacts of climate change and harnessing opportunities presented by the transition to a low carbon future whilst promoting poverty reduction and human development. We recommend that DFID now specifies what steps they will be taking to put this into practice.

2.6 Providing support to adaptation projects in countries vulnerable to climate change and mainstreaming adaptive strategies in countries that are likely to be affected by climate change will be a critical component of this. For example, an increased risk of flooding can lead to an increased risk of contaminated water, which in turn could lead to the spread of waterborne diseases such as cholera and diarrhoea. However, adapting projects aimed at increasing access to water and sanitation facilities by raising them above the ground (“step latrines”) can help prevent contamination by dirty floodwater.

2.7 Programmes by UNICEF in the Philippines have found these flood proof sanitation facilities can prevent the spread of diseases and halt potential epidemics during extreme flooding in the region.31 DFID must therefore maintain their support for such adaptation programmes as it will minimize the impacts of disasters, such as through the spread of disease. This could lead to reduced vulnerability in periods of natural disasters, minimizing the need for humanitarian aid.

2.8 With increasing disparities being seen in progress toward the Millennium Development Goals32 it is critical that we seek to minimise the impact of climate change and climate related natural disasters, particularly on the most vulnerable. Adaptation, mitigation and disaster risk reduction play a key role in promoting equitable outcomes for all children by both protecting the most vulnerable communities against the potential risks they face as well as reducing the impact of disasters and climatic impacts when they occur. This is critical in ensuring children have their rights fulfilled and allows communities to be prepared in the face of increasing disaster uncertainty.

2.9 UNICEF UK welcomes the moves the UK government is making to mainstream climate change responses in international aid and prioritise climate change as an international development issue. We recommend they now make clear what this shift in policy will mean for UK development aid programming.

3. How the UK’s contributions to the International Climate Finance Fund will be managed

3.1 International climate finance is a key investment for current and future generations. Financing for climate adaptation and mitigation will ensure that children are able to enjoy a safe, clean environment and are protected from climate challenges. Climate finance will be key to ensuring that there are resources available for children to survive and thrive in a changing climate

3.2 UNICEF UK welcomes the recent establishment of the Green Fund at COP 16 in Cancun. The Green Fund will be critical for mobilising and distributing the flows of climate finance from developed to developing countries.

3.3 UNICEF UK supports the split of climate finance between DEFRA, DFID and DECC. We support the establishment of a cross department board to manage international climate finance.

3.4 After the Fast Start Funding for climate finance period is over, the UK should ensure that it delivers an ambitious level of climate finance that is sufficiently additional to ODA and is derived from innovative sources such as new taxes on the financial sector and private sector contributions. The UK should make clear its long term climate finance commitment in 2011.

3.5 The UK’s climate finance contributions should have balanced allocation between adaptation and mitigation in vulnerable countries.

3.6 The UK’s contribution to the international climate finance funds must take an equity approach, to ensure that those most vulnerable to the impacts of climate change receive priority in allocation. 17 December 2010

31 Pg 7,UNICEF UK, Climate Change in Kenya: Focus on Children, 2010 32 UNICEF, Progress for Children: Achieving the MDGs with Equity, September 2010 cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w22 Environmental Audit Committee: Evidence

Written evidence submitted by the World Development Movement

Summary — This submission focuses on UK aid in the context of its contribution towards efforts to tackle global climate change. — The UK is providing finance for climate change adaptation as loans, rather than as grants. This increases the debt burden on poor countries, reduces resources available for other development goals such as health and education, while achieving little to reduce the impacts of climate change. — The significant majority of the UK’s adaptation finance has been delivered through the Pilot Program for Climate Resilience. This fund has a donor dominated governance and selection process, is not structured to meet the demands of those most affected and does not encourage strong local ownership of adaptation projects. — The UK’s finance for climate change mitigation through REDD is achieving questionable results in reducing deforestation or emissions, can involve the transfer of land rights to major financial institutions or multinational corporations, risk countries replacing forests with plantations and risk undermining the UN Framework Convention on Climate Change (UNFCCC) discussions. — The Green Climate Fund established at Cancun does not go far enough to meet the financial costs of tackling climate change. The UK should push to ensure the fund provides a balanced allocation of adaptation and mitigation finance, is demand led and that a significant proportion of finance comes from public sources. — All of the UK’s current and planned contributions to climate finance is not additional to the aid budget. The UK should consider the introduction of new finance raising mechanisms such as the removal of subsidies for fossil fuel based electricity generation, taxes on aviation and shipping or a financial transactions tax to cover the costs of climate finance above the UK’s existing aid commitments.

1. Introduction

1.1 The World Development Movement (WDM) campaigns to tackle the root causes of poverty. With our partners around the world, we win positive change for the world’s poorest people. We lobby governments and companies to change policies that keep people poor. WDM is a democratic membership organisation of 15,000 individuals and 60 local groups.

1.2 WDM welcomes the Environmental Audit Select Committee Inquiry into the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation. In particular we welcome the Committee’s recognition that the burden of climate change will fall disproportionately on developing countries and that targeted investment in environmental protection can make a valuable contribution to sustainable development.

2. UK provision of climate change adaptation finance as loans

2.1 At the UNFCCC COP15 summit in Copenhagen the UK government pledged £1.5 billion in “Fast Start” finance from 2010 to 2012.1 The Copenhagen Accord set out that this finance was to be “new and additional resources”, with “balanced allocation between adaptation and mitigation” through a fund whose governance provides “equal representation of developed and developing countries”.2

2.2 To date £568 million has been committed to specific programmes, £234 million of which is being put towards finance for climate change adaptation.3 The vast majority of this, £202 million, has been allocated to the Pilot Programme for Climate Resilience (PPCR), part of the Climate Investment Funds administered by the World Bank.4

2.3 All of the money allocated to the PPCR by the UK government has been provided in the form of a “capital grant” which means that it can only be provided to recipient nations in the form of loans. The UK government is the only donor not to provide the PPCR with grant finance.5

2.4 The only justification for loans can be if they generate revenue to the loan recipient above the interest and principal costs of the loan. The UNFCCC & IPCC define adaptation as “adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities”.6,7 However, given current estimates of the expected devastating impact of climate change on developing countries it is likely that adaptation will predominantly, if not entirely, address “moderating harm” rather than “exploiting beneficial opportunities”. Given this situation adaptation activities will aim to maintain revenue at the same rate as before; funding for climate change adaptation will not lead to increased revenue to repay a loan. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w23

2.5 In addition, looking at data on cumulative emissions since 1850, the UK is the sixth largest emitter of CO2.8 The UK has benefitted from the economic advantages of this high carbon development and now developing countries are suffering the negative impacts of the resulting climate change. It can therefore be seen that finance for climate change adaptation is compensation for the negative effects of our high carbon development, and as such should be given as grants not as loans. This concept of historic responsibility is enshrined in the principle of “common but differentiated responsibilities” in the UNFCCC Kyoto Protocol. 2.6 DfID and DECC have publicly stated that these loans are made at concessional rates and as such 77% of this loan finance can be considered as grant finance.9 However this ambitious accounting can only be applied if such loans are compared against commercial rates. As the money lent must be paid back in full there is no net flow of capital to developing countries when compared to providing this finance as grants. In addition, by providing this finance as capital the UK aims to reinvest this money in future, implicitly recognising that there will not be a net transfer of wealth to countries affected by climate change. 2.7 As well as directly providing loans to countries to fund climate change adaptation, the first three projects approved by the PPCR have leveraged significant additional external debt. Bangladesh received a total finance package of $625 million, of this 92% ($575 million) came in the form of loans.10 The fact that this adaptation finance is provided as loans compounds Bangladesh’s high external debt. Bangladesh’s foreign debt stood at $21.9 billion in 2007, rising to $23.8 billion in 2008 despite paying over $1 billion in debt servicing in both 2007 and 2008. 2.8 Many of the countries most affected by climate change are already highly indebted. Finance for climate change adaptation should not be used to add further debt to these countries, forcing them to pay twice for climate change. 2.9 Though providing climate change adaptation finance as loans, rather than grants, the UK government is reducing the finance available domestically within developing countries for other development needs such as health, education or sanitation. 2.10 It should be noted that these policies stand in stark contrast to the pre-election policies of the coalition government. Liberal Democrat party policy is to provide “grants for communities vulnerable to the impact of climate change without increasing the burden on indebted countries”.11 Conservative party pre-election policies were “to continue, as far as possible, to give aid as grants not loans” and to “encourage other donors such as the World Bank to give aid for social objectives, whenever possible, as grants”.12 2.11 The UK should transfer the current “capital grant” contribution to the PPCR to a full grant; give no further finance to the PPCR while it remains committed to providing adaptation finance as loans and instead provide finance through the UN Adaptation Fund (see below).

3. UK provision of climate change adaptation finance through the PPCR 3.1 The PPCR was set up as part of the Climate Investment Funds in 2008 by the World Bank. These funds were set up and operate outside of the UNFCCC process and are ultimately accountable to the Board of the World Bank, not to the member states that constitute the UNFCCC process. The Funds are therefore strongly donor led and are likely to reflect the priorities of donor, rather than beneficiary states. 3.2 Bernaditas Muller, coordinator of the G77 and China, speaking in April 2008 after the announcement of the climate investment funds said: “The governance of these funds is donor-driven. There is clearly money for climate actions, which is the good news, but the bad news is it is in the hands of institutions that do not necessarily serve the objectives of the Convention.”13 3.3 The dominance of the interests of donor states can be seen in the decision making process. During the discussions for the approval of the first three projects from the PPCR, members of the PPCR Board noted that the scoping for the Tajikistan project had not been completed, that budgets appeared incomplete and that issues relating to gender and consultation had not been fully addressed. The PPCR Board however, approved the financial package as the US stated that “We need things to move forwards so we can get more money. Congress needs to see results”.14 Decision making for the allocation of adaptation finance should be based on the needs of those affected, not the political needs of donor countries. 3.4 Developing countries cannot apply to the PPCR for funds. Instead, the PPCR Board appointed an expert group to recommend recipient countries. This perpetuates the donor dominated governance model of the PPCR and undermines local ownership of adaptation projects. The expert panel appointed to make recommendations to the Board complained about the process noting that hand-picking countries was arbitrary and would lead to less country ownership than countries choosing to apply for funds: “Doing a top-down (or even expert judgment-based) selection as opposed to a demand led selection process poses problems of inclusion / exclusion of countries that will seem arbitrary and open to challenge [...] The delay of demand driven activities until after the country selection also opens the process up to the danger of a lack of sufficient country ownership and buy-in.”15 3.5 The donor-dominated model of the PPCR stands in contrast to the UN Adaptation Fund, formed under the auspices of the UNFCCC. Any member state can apply for funding and the Adaptation Fund Board is made up of representatives of all of the parties of the UNFCCC. Funding through the PPCR can only be cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w24 Environmental Audit Committee: Evidence

delivered through the World Bank, whereas the Adaptation Fund can be delivered by multilateral agencies or national bodies. These organisations are likely to have stronger local engagement than the World Bank and will build stronger local ownership of climate change adaptation projects. Through this model the Adaptation Fund is demand, not donor led, meeting the needs of those most affected. 3.6 Andrew Mitchell, Secretary of State for International Development, has stated that the UK government is “supportive of the Adaptation Fund”,16 however to date the UK government has given no climate finance to it. Members of the UK public have now donated over £1,400 towards the Fund and have called on the government to channel the UK’s “Fast Start” finance through this fund. 3.7 The UK government should ensure that future finance for climate change adaptation is given through the UN Adaptation Fund until at least until 2014, the current confirmed period covered by the Fund.

4. Climate change mitigation finance for clean technologies 4.1 £155 million of the UK’s “Fast Start” finance has been committed to the Climate Investment Fund’s “Clean Technology Fund” (CTF).17 The CTF promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings. 4.2 In a study by WDM of four projects funded through the CTF a key part of the programmes is the removal of energy subsidies, which are claimed to distort the market and increase demand for energy, contributing to climate change. These blanket bans prevent poorer people increasing their access to affordable energy. Projects undertaken to mitigate climate change should ensure that they continue to meet the needs of the world’s poor, and not just provide electricity to private sector industries or the wealthy within developing countries. 4.3 One of the projects undertaken through the CTF in Egypt explicitly aims to export renewable electricity to Europe. Such a project can be seen to be beneficial as it will help meet the EU’s renewable energy and emissions reductions targets. The finance for this project should however not be counted as finance to the developing world for climate change mitigation as it is not providing clean energy to the local society and economy, but producing a new export commodity.

5. Climate change mitigation finance for REDD 5.1 £111 million of the UK’s “Fast Start” finance has been committed to support REDD (Reducing Emissions from Deforestation and forest Degradation).18 This finance is being used for capacity development, piloting payment systems and supporting institutions with the aim of tackling the 17% of current greenhouse gas emissions resulting from deforestation. 5.2 REDD projects have come under intense criticism from groups in the global south and environmental NGOs relating to a wide range of issues. Analysis by Friends of the Earth International has identified that the REDD projects already undertaken have had a questionable effectiveness in reducing deforestation or emissions, do not effectively engage or respect the rights of indigenous communities and can involve the transfer of land rights to major financial institutions or multinational corporations.19 5.3 Documents from the Indonesian government go significantly further than this and indicate that the government aims to exploit weak legal definitions to class forests as “degraded” and “rehabilitate” the land with palm trees and biofuel crops.20 5.4 In addition the framework for REDD projects has not yet been agreed in the UNFCCC process and there is a danger that the negotiations could be overtaken by the projects already underway. This could force the negotiators to implement an agreement based on the reality “on-the-ground” rather than an agreed consensus between countries. Additionally, many of the REDD projects underway are being driven by high carbon emitting multinational companies who are aiming to use REDD as a mechanism for carbon offsets through carbon trading. This could allow these companies a de facto role in setting the framework for REDD through the pilot projects. 5.5 While not yet agreed, many proponents of REDD aim to provide long term funding through carbon markets. Previous analyses have highlighted the failures of carbon trading to effectively reduce emissions, due to difficulty in verifying emission reductions and the unstable and persistently low price of carbon. In addition offsetting in this way would negate the mitigation purpose of these projects and instead only counterbalance significant emissions in developed countries.

6. Green Climate Fund 6.1 A new “Green Climate Fund” was established at the COP16 summit in Cancun. This Fund is to provide long term climate finance from developed countries from 2012 onwards with a goal of “mobilizing jointly $100 billion per year by 2020 to address the needs of developing countries”.21 6.2 This target of $100 billion per year falls significantly short of the $300 billion cost of adaptation and mitigation estimated by Yvo de Boer, former head of the UN Climate Change Secretariat.22 The UK should ensure that its contributions towards international climate finance are not constrained by the $100 billion commitment and seek to provide a fair contribution to the total costs identified. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w25

6.3 The Cancun agreement states that funds “may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources”, noting the report of the High-level Advisory Group on Climate Change Financing. It should be noted that some within the Advisory Group argued that carbon offsets should not count towards the $100 billion goal “since these are mechanisms that are designed to reduce the cost of mitigation in developed countries”.23 WDM fully supports this view and believes that the UK should not include any finance transferred through carbon offsets in its accounting of contributions towards climate finance. 6.4 Public finance must play a major role in contributing towards the achievement of the $100 billion target. Many of the sources of finance identified in the report are dependent upon reaching a price for carbon of $20–$25 / ton, which may be reliant on volatile and unpredictable carbon markets. Private sources of finance may have a role to play, however it is highly likely that private finance will prioritise projects with strong developmental outcomes over those with high expected returns. Public finance is the most reliable and predictable source of climate finance which can be targeted at the poorest and most vulnerable. 6.5 The Cancun Agreement did not include the commitment attached to “Fast Start” finance that it would be balanced between adaptation and mitigation. There is a risk that without a strong commitment to a balance between adaptation and mitigation the majority of this finance will be provided for mitigation where there is likely to be the strongest return on investment. It is vital that a significant proportion of international climate finance supports developing countries adaptation to the impacts of climate change, especially projects protecting the poor and vulnerable. 6.6 Furthermore the UK government should advocate for the new Green Climate Fund to allow direct access through a range of international, regional and national implementing agencies, be demand led, promote local ownership of adaptation projects and provide all adaptation finance as grants; building on the successes of the UN Adaptation Fund.

7. Additionality of UK climate finance 7.1 The Copenhagen Accord set out that “Fast Start” finance was to be “new”, in that it was to be money that had not been announced before, and “additional” to developed countries pre-existing aid commitments.24 7.2 None of the UK’s budget for climate finance of £2.9 billion set in the Comprehensive Spending Review is additional to aid commitments. It is a vital component of the Accord, and an underlying principle of the UNFCCC process, that climate finance is not aid. By using the UK’s aid budget to achieve climate finance objectives it seriously reduces the availability of aid for wider development objectives, such as supporting the provision of education or healthcare. 7.3 The UK government has a range of innovative options which could be implemented to provide new sources of finance for developing countries to tackle climate change. Increasing taxation on aviation fuel to bring it in line with road or train transport could raise £6.5 billion each year and removing the VAT exemption for aviation could raise a further £2.3 billion.25 Introducing a tax on shipping fuel or the removal of subsidies for fossil fuel based electricity generation could also help to encourage emission reductions while providing a significant additional source of climate finance. A Financial Transactions Tax, currently a key component of France’s presidency of the G20 could also make a significant contribution to climate finance. A tax of 0.005% on currency transactions could raise an additional $40 billion a year.26

References 1 Department for International Development & Department for Energy & Climate Change (2010). UK Fast Start Climate Change Finance. Available at http://www.dfid.gov.uk/Documents/BROCHURE%20UK%20FAST%20START.pdf 2 UNFCCC (2010). Report of the Conference of the Parties on its fifteenth session, held in Copenhagen from 7 to 19 December 2009. Addendum. Part Two: Action taken by the Conference of the Parties at its fifteenth session. Available at http://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf 3 Department for International Development & Department for Energy & Climate Change (2010). UK Fast Start Climate Change Finance. Available at http://www.dfid.gov.uk/Documents/BROCHURE%20UK%20FAST%20START.pdf 4 Ibid. 5 Climate Funds Update (2010). Pilot Program for Climate Resilience. Available at http://www.climatefundsupdate.org/listing/pilot-program-for-climate-resilience. Accessed 09/12/2010. 6 UNFCCC (2010). Glossary of climate change acronyms. Available at http://unfccc.int/essential_background/ glossary/items/3666.php. Accessed 13/12/2010. 7 IPCC (2001). Working Group II: Impacts, Adaptation and Vulnerability. IPCC Third Assessment Report: Climate Change 2001 (TAR). Cambridge University Press. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w26 Environmental Audit Committee: Evidence

8 World Resources Institute (2010). CAIT—Cumulative Emissions. Available at http://cait.wri.org/cait.php?page=cumul&mode=view. Accessed 10/12/2010.

9 Department for International Development & Department for Energy & Climate Change (2010). UK Fast Start Climate Change Finance. Available at http://www.dfid.gov.uk/Documents/BROCHURE%20UK%20FAST%20START.pdf

10 Climate Investment Funds (2010). Strategic Program for Climate Resilience: Bangladesh. 25 October 2010. Available at http://www.climateinvestmentfunds.org/cif/sites/climateinvestmentfunds.org/files/ PPCR%205%20SPCR%20Bangladesh%20nov2010.pdf. The financial package includes a $60 million loan from the PPCR, $300 million loan from the International Development Association and a $215 million loan from the Asian Development Fund.

11 Liberal Democrats (2010). Self-assessment against BOND vote global manifesto. Liberal Democrats. And Liberal Democrats (2009) Policy Motion: Energy and Climate Change. September 2009.

12 Conservative Party (2010). One world Conservatism: A Conservative agenda for international development.

13 Khor, M (2008). World Bank climate funds under fire from G77 and China. TWN Info Service on Finance and Development. Bangkok. 03/04/2008.

14 Notes of Civil Society Observer, Ilana Solomon of Action Aid, to the PPCR Meeting of 10 November 2010.

15 Expert group to the subcommittee of the PPCR. (2009). The selection of countries to participate in the Pilot Programme for Climate Resilience. Report of the expert group to the subcommittee of the PPCR Climate Investment Funds. January 2009.

16 Mitchell A (2010). Letter to the World Development Movement and Jubilee Debt Campaign re. “No New Debt Send a Pound” campaign. (Official correspondence, 11/11/2010).

17 Department for International Development & Department for Energy & Climate Change (2010). UK Fast Start Climate Change Finance. Available at http://www.dfid.gov.uk/Documents/BROCHURE%20UK%20FAST%20START.pdf

18 Ibid.

19 Friends of the Earth International (2010). REDD: The Realities in Black and White. Available at http://www.foei.org/redd-realities.

20 Vidal, J (2010). Indonesia eyeing $1 billion climate aid to cut down forests, says Greenpeace. The Guardian. 23/11/2010.

21 UNFCCC (2010). Outcome of the work of the Ad Hoc Working Group on long-term Cooperative Action under the Convention—Advance unedited version. Available at http://unfccc.int/files/meetings/cop_16/application/pdf/ cop16_lca.pdf

22 Doyle, A (2009). Climate change fight seen costing $300 billion a year. Reuters. 11/08/2009. Available at http://uk.reuters.com/article/idUKTRE57A3NO20090811

23 UN (2010). Report of the Secretary-General’s High-level Advisory Group on Climate Change Financing. Available at http://www.un.org/wcm/webdav/site/climatechange/shared/Documents/AGF_reports/AGF_Final_ Report.pdf

24 UNFCCC (2010). Report of the Conference of the Parties on its fifteenth session, held in Copenhagen from 7 to 19 December 2009. Addendum. Part Two: Action taken by the Conference of the Parties at its fifteenth session. Available at http://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf

25 Green Alliance (2010). Making aviation pay its way—the case for raising more revenue from plane journeys. Available at http://www.green-alliance.org.uk/uploadedFiles/Themes/Sustainable_Economy/ Making%20aviation%20pay%20its%20way%20-%20final%20%282%29.pdf

26 Spratt, S (2009). Assessing the alternatives: Financing climate change mitigation and adaptation in developing countries. New Economics Foundation and Stamp Out Poverty. 17 December 2010 cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w27

Written evidence submitted by the Met Office 1. The environmental stresses of climate change will be felt worldwide, but most severely in developing countries. These areas are already more vulnerable (to flood and drought in particular) especially where a large share of the economy and livelihood is dependant on weather sensitive activities such as agriculture. 2. Food, water and energy—essential for human survival—are already in short supply in many parts of the world and population growth and changing weather patterns may exacerbate the problem. The impacts of climate change are likely to widen the poverty gap with developed countries by worsening inequalities in health systems, as well as access to adequate food, clean water and other resources. The change in availability of water in particular will have far-reaching socio-economic consequences: — Countries least well-equipped to deal with flooding, water shortages and valuable agricultural land turning to desert could be major flashpoints for conflict; — Long-term drought could cause huge migration leading to subsequent security issues; — Changing weather patterns will force a change in agricultural practices; — The largest coastal agricultural land areas at risk of flooding from sea level rise lie on the world’s major river deltas, particularly on the Asian sub-continent; — More than 17 million Bangladeshis live in areas that could be flooded by rising sea levels; — There could be large decreases in water availability across west Asia, the Middle-East, Central America and the Mediterranean and Amazon basins; — Climate change may already be a contributory factor to conflicts in Africa. 3. Climate science expertise, however, is concentrated mainly in developed countries. Although expertise in many developing countries is now starting up, often through collaboration with developed countries, climate science and climate modelling is complex and good training is therefore essential, especially in awareness of uncertainties in climate predictions. The Met Office Hadley Centre’s PRECIS and RCOF programmes and the UK Voluntary Cooperation Programme are examples of developed country expertise and tools being transferred to developing countries:

Regional Climate Outlook Forums (RCOF) 4. Predictions of the quality of the upcoming rainy season are a key component in preparing food security outlooks, particularly in Africa where rain-fed agriculture predominates. The Dfid funded Regional Climate Outlook Forums have been running for around ten years and are held in advance of the main rainy seasons in Africa and other countries. They are key mechanisms for producing and disseminating seasonal outlooks. 5. At the RCOFs, climate experts from countries in the region and experts from international prediction centres convene to compile a range of prediction information into a single agreed outlook for the region. The Met Office was instrumental in the setting up of RCOFs in Africa in the late 1990s, and in the last two years, with funding, has increased its contribution to the preparation of the consensus forecasts. In particular we have provided training in understanding and using climate-model-based seasonal forecasts. Notable successes resulting from this project include: — The International Federation of the Red Cross and Red Crescent were able to make timely interventions based upon predictions of an elevated risk of flooding, significantly alleviating the impact of floods during the 2008 West Africa rainy season. — The Kenya Red Cross purchased and distributed additional maize seed based on a prediction of higher than average rainfall during the 2009 East Africa short rains season which resulted in a bumper harvest for the many areas. 6. Statistical prediction methods—currently the main method used at RCOFs—are however becoming less reliable because the historical information on which they are based is becoming unrepresentative of current climate. One advantage of using a model-based forecast is that they are climate change “proof”—they take account of natural and man-made influences on climate variability and change. There are therefore large potential benefits to be reaped from continued development and application of model-based seasonal forecasts and, although a relatively new area of science, they have already been successful in many parts of Africa.

Climate Science Research Partnership (CSRP) 7. The Climate Science Research Partnership (CSRP) is an ongoing three-year, £3.2 million, DfID funded programme supporting 8.5 Met Office Hadley Centre scientists and facilitating capacity building activities with African scientists to conduct and use climate science. Through its consultation process and knowledge management activities the CSRP responds to the need for much closer and sustained partnerships between producers and users of climate information. A steering committee including DfID, Met Office and external (non-executive) directors has been established to guide and monitor the CSRP programme. 8. The CSRP’s overarching purpose is to advance capabilities for sustainable poverty reduction in Africa through: improved understanding of the drivers of African climate variability and change; improved prediction on monthly-to-decadal timescales; and strengthened capacity for use of climate science in Africa. The specific cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w28 Environmental Audit Committee: Evidence

objectives have been shaped through a consultation process with African stakeholders to determine the climate variables and parameters for which improved prediction is most urgent, and to identify priority requirements for capacity building. Stakeholders included the main regional climate organisations, National Meteorological Services, universities, NGOs, government ministries and boundary organisations acting on climate information to aid vulnerable communities. 9. There was wide recognition that there is an urgent need to improve understanding and modelling of African climate to provide reliable seasonal early warning systems. There was a very strong signal that development of capability to predict the onset of the season, its duration and frequency of dry spells were the greatest needs for the agricultural sector. The need for decadal-range information for adaptation was also recognised. 10. In response to the consultation, work has started to assess model performance for rainy season onset. It was found that the average onset date for the West African Monsoon in the Met Office model closely matches the observed average onset date. This is an encouraging result, suggesting that model representation of the driving processes is not unduly biased. There is also emerging evidence that we are able to predict interannual variations in onset date.

PRECIS 11. The Met Office Hadley Centre’s regional climate modelling system, PRECIS, was developed in order to help generate high-resolution (50km or 25km) climate change information for as many regions of the world as possible. The system has recently been extended to enable users to explore the implications of uncertainties in the large-scale patterns of climate change. This is an important step in moving towards risk-based climate predictions. The intention is to make PRECIS freely available to groups of developing countries in order that they may develop climate change scenarios at national centres of excellence, simultaneously building capacity and drawing on local climatological expertise.

UK Voluntary Cooperation Programme (VCP) 12. In addition to building capacity in climate science, it is important to consider the entire meteorological value chain, including the provision of equipment, services and training to the local National Meteorological and Hydrological Services. 13. The Met Office is involved in the World Meteorological Organization’s Voluntary Cooperation Programme (VCP). The main purpose of the VCP—run in cooperation with other donor National Meteorological and Hydrological Services across the world—is to help improve local capacity to forecast weather and climate to enable better mitigation and response to natural hazards, and, ultimately, aid sustainable development. The UK VCP covers a range of projects from supporting the collection and effective management of weather and climate observations, to assisting with the dissemination of weather forecasts and warnings to the public. 14. Delivery of climate services requires effective national Climate Data Management Systems with skilled people able to manage these and able to use and apply the data to problems in food security and climate risk analysis. These are also essential as the evidence base for local climate change studies and for analysis of impacts. 15. We have helped develop a Climate Database Management System called Climsoft, in conjunction with experts from Zimbabwe, Kenya and Guinea, which is designed to be simple to use and economical. This system has already been installed in over 20 countries in Africa, the South Pacific, the Caribbean and south- east Asia. Climsoft can be used to record and manage ongoing weather/climate observations as well as digitising historical data. 16. The SIAC course, run by the Statistical Services Department at the University of Reading, provides training in the use of climate observations for practical applications, such as agriculture, health and emergency/ disaster planning. Since 2000 we have been involved in supporting this training—mainly in Africa—both the e-learning course as well as face-to-face courses in statistics. 23 December 2010

Written evidence submitted by CDC Group plc Key Questions 1. CDC’s policy regarding the environmental impact of its investments. 2. The extent to which and how CDC seeks to safeguard against degrading the environment. 3. CDC’s policy on whether CDC investments address climate change mitigation/adaptation. 4. Any environmental or climate-change focussed restrictions on the investments that CDC can make, eg regarding fossil-fuel power stations. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w29

Background CDC is the UK’s development finance institution, owned by the Department for International Development (DFID). CDC’s mandate is to provide patient capital to invest in promising businesses, typically in South Asia and sub-Saharan Africa. CDC believes that developing the private sector in these regions is key to long-term poverty relief. CDC typically provides capital for private equity fund managers to invest in new and growing businesses within CDC’s investment universe. All CDC’s fund managers are asked to sign up to CDC’s Investment Code which sets out the principles, objectives, policies and management systems for sustainable and responsible investment with respect to environmental, social and governance (ESG) matters. Fund managers are asked to implement these principles and objectives in their operations and also in the portfolio companies in which they invest.

CDC’s Investment Code CDC’s Investment Code, effective for all capital committed to new funds and co-investments by CDC, was updated in 2008 and replaced CDC’s prior Business Principles and Exclusion List in line with developing international best practice on Environment, Social and Governance (ESG) standards. All capital committed by CDC must be invested in accordance with CDC’s Investment Code. The core principle of CDC’s Investment Code is that businesses in which CDC’s capital is invested should work on improving their practices on ESG in line with international good practices over the duration of the investment by CDC’s fund managers. The Investment Code makes reference to a leading number of international standards and legal frameworks in the area of ESG. CDC’s Investment Code also includes CDC’s Exclusion List which sets out the activities and businesses in which CDC capital should not be invested for ethical reasons. Where CDC’s fund managers have effective control or significant influence over portfolio companies,33 CDC requires that fund managers procure that their portfolio companies sign an undertaking confirming that they will operate in line with the Investment Code. The full investment code is available for download from CDC’s website: www.cdcgroup.com/CDC-Publications.aspx

33 A Fund Manager will be deemed to have significant influence over a portfolio company where its fund has (i) an ownership interest in the portfolio company in excess of 20%, which is presumed to be a level that allows for participation in the financial and operating policies of a portfolio company (if the percentage is lower but gives rise to the same participation, this will also meet the definition of significant influence); or (ii) board representation to a level that allows for participation in determining the financial and operating policies of the portfolio company; or (iii) rights to influence the financial and operating policy decisions of the portfolio company pursuant to a shareholders’ or similar agreement. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w30 Environmental Audit Committee: Evidence

Summary of CDC’sPolicy and monitoring

Applying CDC’s policies on environmental matters and climate change

Obligatory for all fund Monitoring and evaluation of managers all fund managers

CDC’s CDC support Investment Fund Exclusion list investment fInovr efustnmdent monitoring evaluation code managers

• Exclusion for • Principles and • CDC Toolkit on • Annual ESG • Two broader certain policy to which a adding value report on impact businesses and fund manager through effective economic evaluations of activities where must agree in management of performance and fund performance CDC’s capital order to receive a ESG ESG performance • Environmental may not be financial • CDC Climate • Serious incidents performance of invested commitment from Change Toolkit at portfolio portfolio CDC for fund managers companies, companies is • Includes specific including material considered in • CDC led ESG environmental environmental detail workshops policies effect, requires • One-to-One immediate • Investment support as reporting to CDC Undertakings for required portfolio • Site visits of companies with portfolio significant companies influence

1. CDC’s policy regarding the environmental impact of its investments

CDC’s Investment Code requires fund managers and their investee companies to apply the following general principles that they will: — comply with all applicable laws; — as appropriate, minimise adverse impacts and enhance positive effects on the environment, workers, and all stakeholders; — commit to continuous improvements with respect to management of the environment, social matters and governance; — work over time to apply relevant international best practice standards,34 with appropriate targets and timetables for achieving them; and — employ management systems which effectively address ESG risks and realise ESG opportunities as a fundamental part of a company’s value.

Environmental impact

On environmental matters specifically, CDC’s Investment Code includes the following principles and policies:

Objectives — to minimise adverse impacts and enhance positive effects on the environment, as relevant and appropriate, from the businesses in which CDC’s capital is invested; — to encourage the businesses in which CDC’s capital is invested to make efficient use of natural resources and to protect the environment wherever possible; and — to support the reduction of greenhouse gas emissions which contribute to climate change from the businesses in which CDC’s capital is invested.35 34 As referenced in this Investment Code and as may develop over time. 35 In line with the 1994 United Nation Framework Convention on Climate Change and the associated 2005 Kyoto Protocol (“UN Framework Convention”), see www.unfccc.int/2860.php as may be amended from time to time. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w31

Policy

Businesses in which CDC’s capital is invested will: — operate in compliance with applicable local and national laws (as a minimum); and — assess the environmental impact of their operations as follows: — identify potential risks and appropriate mitigating measures through an environmental impact assessment where business operations could involve loss of biodiversity or habitat, emission of significant quantities of greenhouse gases, severe degradation of water or air quality, substantial solid waste or other significant negative environmental impacts;36 and — consider the potential for positive environmental impacts from business activities; and — take appropriate actions to mitigate environmental risks, ameliorate environmental damage, and enhance positive effects as follows: — where an activity is assessed to present significant environmental risks, work over time to apply the relevant IFC policies and guidelines,37 if these are more stringent than local legislation, with appropriate targets and timetable for improvements; and — as appropriate, work over time towards international environmental best practice standards.38

2. The extent to which and how CDC seeks to safeguard against degrading the environment

In order to obtain a financial commitment from CDC, CDC requires that its fund managers sign the Investment Code containing the above objectives and policies on environmental matters. Where CDC’s fund managers have obtained significant influence over a portfolio company (as defined above), CDC also requires an undertaking that the portfolio company will also comply with CDC’s Investment Code. All CDC’s fund managers agree to apply CDC’s exclusion list when considering prospective investments.

CDC Exclusion List

CDC’s Investment Code contains an exclusion list of businesses and activities in which CDC’s capital will not be invested. This includes: — production of or trade in any product or activity deemed illegal under applicable local or national laws or regulations, or banned by global conventions and agreements, such as certain: — hazardous chemicals, pesticides and wastes;39 — ozone depleting substances;40 and — endangered or protected wildlife or wildlife products;41 — production of or trade in arms, ie, weapons, munitions or nuclear products, primarily designed or primarily designated for military purposes; or — production of, use of or trade in, unbonded asbestos fibres.42

CDC’s capital will not be invested in businesses for which the following activities or products are, or are intended to be, a significant source of revenue: — gambling; — pornography; or — tobacco or tobacco related products.43 36 Activities with potential significant adverse environmental impacts that are diverse, irreversible or unprecedented; mindful of potential cumulative, secondary or synergistic impacts that may occur as a consequence. 37 The IFC Performance Standards and the 2007 IFC Environmental, Health and Safety Guidelines (“IFC EHS Guidelines”), as may be amended from time to time and adopted by CDC. IFC EHS Guidelines include general guidelines and industry sector guidelines for forestry, agribusiness / food production (including fisheries), general manufacturing, oil and gas, infrastructure, chemicals (including pharmaceuticals), mining and power. See www.ifc.org/ifcext/enviro.nsf/Content/PerformanceStandards and www.ifc.org/ifcext/policyreview.nsf/Content/EHSGuidelinesUpdate. 38 Including the range of internationally certifiable environmental standards issued by the International Organization for Standardization (“ISO”), the ISO 14000 series, notably including standards for environmental management systems (ISO 14001) and greenhouse gas emissions (ISO 14064–65), as may be amended from time to time. See www.iso.org. 39 Including those specified in the 2004 Stockholm Convention on Persistent Organic Pollutants (“POPs”), see www.pops.int; the 2004 Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, see www.pic.int; and the 1992 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, see www.basel.int; as may be amended from time to time. 40 As covered in the 1999 Montreal Protocol on Substances that Deplete the Ozone Layer, see www.ozone.unep.org, as may be amended from time to time. 41 As covered in the 1975 Convention on International Trade in Endangered Species or Wild Flora and Fauna (“CITES”), see www.cites.org, as may be amended from time to time. 42 This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%. 43 Except, in the case of tobacco production only, with an appropriate timeframe for phase-out. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w32 Environmental Audit Committee: Evidence

CDC’s monitoring of compliance with the Investment Code

In addition to CDC’s exclusion list and obtaining investment undertakings where fund managers have obtained significant influence, CDC has various checks on its investments to ensure against breaches of its Investment Code. These include: — the right to perform site visits of portfolio companies; — the requirement to produce an annual ESG report, part of which requires fund managers to list environmental issues and opportunities faced by their portfolio companies, what improvements have been achieved and what further actions remain to be taken; — the requirement to report serious breaches of CDC’s Investment Code, including incidents of material environmental effect to CDC as soon as they arise. A full report with a description of actions to prevent re-occurrence is then required within a reasonable timeframe; and — the completion of two development impact evaluations over the life of a fund. The impact that the fund has had on environmental matters and the consideration it has paid to climate change issues is considered within these.

CDC’s support for fund managers on environmental and climate change topics

CDC has produced various documents to support its fund managers in implementing sound ESG practices and reducing negative environmental and climate change impact. This support has included: — in situ workshops and capacity building; — guidance material in the form of a (free of charge) 190-page Toolkit on ESG for fund managers, available in English and Chinese. The Toolkit was updated in 2010 and has to date been used in training sessions for 45 of CDC’s 71 fund managers in Shanghai, Mumbai, Lagos, Johannesburg, Sao Paulo, Bogota and London; — specific climate change guidance material on assessing, managing and mitigating the risks posed by climate change in emerging markets; and — one-to-one support as required.

CDC’s Toolkit on ESG and CDC’s climate change guidance can be downloaded from CDC’s website: www.cdcgroup.com/CDC-Publications.aspx

3. CDC’s policy on whether CDC investments address climate change mitigation/adaptation

CDC’s Investment Code is explicit in its objective to support the reduction of greenhouse gas emissions at businesses where CDC’s capital is invested. CDC expects fund managers to perform an environmental impact assessment at businesses at which operations might result in significant greenhouse gas emissions and to consider appropriate action to mitigate against such emissions.

To help fund managers perform this, CDC offers various support on environmental and climate change matters as outlined above.

4. Any environmental or climate-change focussed restrictions on the investments that CDC can make, eg regarding fossil-fuel power stations

CDC’s Investment Code contains an exclusion list (outlined in full above) which contains all businesses and activities in which CDC capital must not be invested. This exclusion list contains various businesses excluded on the grounds of the nature of their environmental impacts and specifically, all businesses prohibited by major international conventions.

CDC’s Investment Code does not make specific exclusions on grounds of potential contributions to climate change and greenhouse gas emissions. CDC would expect however any such investments would carry out an environmental impact assessment and seek to mitigate and reduce climate change impacts over time.

In addition, CDC recognises the shortage of companies, in sub-Saharan Africa in particular, who have been able to access the carbon markets. CDC plans to work with fund managers and portfolio companies over the course of 2011 and 2012 to develop strategies for more portfolio companies to access the carbon market and engage in carbon trading. CDC’s Toolkit on Climate Change for Fund Managers is the first step in this project. 24 January 2011 cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w33

Written evidence submitted by Progressio 1. Summary Progressio welcomes the opportunity to submit evidence, testimonies and recommendations to the Environmental Audit Committee on the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation. Our key points are: — Water scarcity affects a large proportion of the world’s population. Climate change is expected to make this worse with significant impact on people and ecosystems. — Sustainable and equitable water resources management must be a core priority for aid policy. It should include clear poverty objectives, including a gender approach, as women are often particularly affected. — Illegal logging contributes to environmental degradation and is a driver of climate change, has a negative effect on rights and poverty levels, undermines good governance and accountability, and encourages corruption. — Any forestry-related initiatives including the recent EU legislation on timber prohibiting the entry of illegally obtained wood in the EU market are encouraging; but policy coherence between trade, development and environmental protection needs to be in place.

2. Introduction 2.1 Progressio is an international charity that enables poor communities to solve their own problems through support from skilled workers. We lobby decision-makers to change policies that keep people poor and work in partnership with civil society organisations in 11 countries around the world. Our work is guided by three themes: Participation and effective governance, Sustainable environment; and HIV and AIDS. Progressio is the working name of the Catholic Institute for International Relations (CIIR). Progressio has a longstanding relationship with DFID and is a current PPA holder. 2.2 Progressio aims at drawing attention to the significance of water and forestry as a way of enhancing the beneficial impacts of UK overseas aid on poor and marginalised communities in regards to environmental protection and climate change adaptation and mitigation. For this purpose, in this document, we bring examples from Progressio partners and beneficiaries on these areas.

3. Water1 3.1 Water is essential for both life and livelihoods, but the water system stands to be severely affected by climate change.2 Today, one third of the world’s population face water shortages, a figure that is expected to rise to two thirds by 2025.3,4 Climate change is expected to account for about 20% of the global increase in water scarcity this century.5 Even with a moderate 1˚C increase in temperature it is estimated that the small glaciers in the Andes will disappear, threatening water supplies for 50 million people. With a 2˚C increase there could be a 20 to 30% decrease in water availability in some vulnerable regions.6 Climate change is also likely to cause an increased frequency and intensity of floods and deteriorating water quality, such as salt-water intrusion.7 In addition, ecosystems suffer wide and often irreversible changes when water is in short supply or of poor quality, conditions which may aggravate the problem by reducing the ecosystem’s ability to function as a water purifier, water storage and water generator.8 3.2 Only 3% of the world’s water is freshwater, and more than 70% of this water is used for agriculture, leading to direct linkages with food security. Water should be seen as a cross border issue affecting regional, national and international levels, which can lead to trans-border tensions and conflict. Furthermore, an increasing body of evidence is highlighting the issue of the “water footprint” of products and “virtual water”— which refers to the full amount of water that is needed to produce a good. In our report “Drop by drop” (2010), Progressio, CEPES and Water Witness International highlight the negative impact on local communities of water usage for asparagus production in Peru, where the asparagus is primarily produced for the export market, including the UK.9

Gender and water 3.3. Women are commonly the family’s primary caretakers and often the first to become aware of environmental changes. As resources become scarce, their workload increases leading to problems with sustaining their families.10 The traditional gender roles that prevail in many developing countries drives women to search for water for household needs, such as cooking, washing, hygiene and raising small livestock. In Africa, women do 90% of the work of gathering water and wood, for the household and for food preparation.11 Children, in particular girls, often share these responsibilities. In contrast, men are primarily in charge of water for irrigation or livestock farming, but they are also the primary decision makers about water resource management and development at both the local and national level.12 cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w34 Environmental Audit Committee: Evidence

3.4 In developing countries, women and girls spend an estimated 40 billion hours every year hauling up water. This can mean spending as much as eight hours a day carrying up to 40kg of water on their heads or hips.13 Girls are often given the task of collecting water, carrying 15 to 20 litres of water from the water point to their home.14 The strain of water collection already causes ill health in women, and often their children, since mothers often take their children with them, feeling it is unsafe to leave them while they travel long distances for water.15

3.5 During increased water stress, women and girls may have to walk further to collect water, leaving even less time for other activities, such as gaining an education and earning an income. 41 million girls worldwide do not attend school, one of the key reasons is that they are responsible for collecting wood and water.16 Failure to collect sufficient water, or complete other household tasks, sometimes results in verbal or physical abuse from other family members.17 Longer walks can increase the risk of harassment or sexual assault, particularly in conflict zones. In urban areas, time commitments can increase through long hours waiting at communal water points. Furthermore, increased water stress can result in collection of water from sources that are more susceptible to pathogens and bacteria, increasing the risk of spreading of diseases, and further increasing the workload for women in caring for the sick.18 Four million people a year die from water-related diseases, most of whom are children, suffer debilitation from water-borne diseases.19

3.6 70% of farmers worldwide are women, but they often have little access to decision making structures and their needs can be different to men as they are more likely to rely on rain fed agriculture, supplemented by small-scale or hand irrigation. Legal constraints can limit women further. In most countries water allocation for agriculture is linked with land ownership, yet in many places women have little or no rights to own land.20 Globally, women only hold title to less than 2% of private land.21 Similarly, resources that are available may not be suitable for women. For example, water pumps can have handles that women cannot reach or manipulate or that they haven’t been trained to repair. Due to these limitations, women are often the first to be affected in times of water shortages for productive use, too.22,23

Recommendations

3.7 As water resources become increasingly unreliable and scarce, sustainable and equitable water resources management must be a core priority for aid policy. Governance is key as decisions about water resources, who makes them and how they are made, are often at the core of problems around water availability and access, problems that are likely to escalate significantly under climate change.24 In addition, Integrated Water Resources Management (IWRM) is a key component for building social, economic and ecological resilience to climate change, as it is designed to build resilience by balancing increasing and often competing demands for water with the need to guarantee environmental flows.25

3.8 It is important that these elements are guided by a sustainable and equitable approach, ensuring that they cater for those most vulnerable with clear poverty objectives, including a gender approach. This should recognise that men and women have particular needs, knowledge, interests and aspirations, and thus contribute to the management of water resources in different but equally important ways.26 Women’s “hidden” role in water management incorporates considerable knowledge about water resources, including water quality and reliability, but it is often ignored as they rarely participate in decision-making structures.27,28 As a result women’s adaptive capacity to climate change is likely to be reduced.

Testimony: Women protecting the páramo in Ecuador29

3.9 Indigenous farmer Fabiola Quishpe lives in the páramo, a sensitive area of grassland high up in the Andes, that acts like a giant sponge, soaking up water and gently releasing it into the valley below. In recent years, up to an estimated 30% of it has been destroyed, which means that water resources for agriculture and consumption, as well as a vital ecosystem, are at risk. Fabiola, along with other villagers in her community, has been working with Progressio-partner the Institute of Ecuadorian Studies (IEE). As a result, a women’s association was set up and 150 women across the region have become involved in the scheme. Already they’ve seen a significant change. Fabiola says: “Water is a very important liquid and it is necessary for all human beings, and for all who live and exist as part of this pachamama (mother earth). […] The women are the ones who work here. The men, the husbands, they go away to work down there [in towns], they migrate, often to the coast. They come back here when we have festivities and for the harvest seasons. But the people who mainly live here are women. […] In our community we are 17 women working together to recover our native seeds and protect our water resources. We have noticed that when women work together the family benefits. [...] People don’t even think about damaging the grasslands anymore, instead, they see it as a source of water and know that it’s important for conserving water. If we don’t have water how are we going to survive?” cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w35

4. IllegalLogging The eradication of illegal logging is crucial to Progressio’s development goals because: — Illegal logging has a negative effect on people’s rights and poverty levels, brings about environmental degradation and affects water supplies, exposing communities to environment vulnerability. — Illegal logging erodes sovereignty and good governance, and encourages corrupt practices at all levels of the supply chain. — Illegal logging is a strong driver of climate change, through the release into the atmosphere of billions of tonnes of carbon dioxide (CO2) and other greenhouse gases. — Illegal logging has a detrimental effect on accountability and unwittingly forces consumers to purchase timber obtained from illegal sources. — Illegal logging contributes to the loss of biodiversity and reduces the opportunities for sustainable management and good management of the world’s forests.

Forestry 4.1 In 2008, the World Bank reported that the world’s total forest area in 2010 is estimated to be just over 4 billion hectares of 31% of total land area. However, the area of forest is unevenly distributed. The five most forest-rich countries (the Russian Federation, Brazil, Canada, the United States of America and China) account for more than half of the total forest area (53%), while 64 countries with a combined population of two billion people have forest on no more than 10% of their land area. These include a number of fairly large countries in arid zones, as well as many small island developing states (SIDS) and dependent territories. Ten of these have no forests at all.30 4.2 Agriculture is the major competitor to forest areas. According to the World Bank, around 13 million hectares of forest were converted to other uses—largely agriculture—or lost through natural causes each year in the last decade. The World Bank has estimated that 90% of the 1.2 billion people in the world living in extreme poverty are affected by deforestation. Forest destruction damages food and water supplies, causes loss of bio-diversity, increases vulnerability to natural disasters, and contributes to the denial of indigenous communities’ rights. 4.3 The World Bank has outlined that the problem of sustainable forest management (SFM) is highly complex and can only be addressed by a range of actions targeted at (i) the policy framework, (ii) strengthening of governance, (iii) removal of market distortions and engaging market actors, (iv) full valuation and sharing of forest benefits through market and other mechanisms, (v) capacity building, and (vi) mobilization of adequate financial resources. 4.4 All of these elements are relevant for sustainable forest management, but it is also important to acknowledge that trade and consumption patterns may negatively impact on rights and governance issues. For example, the problem of deforestation and illegal logging, until very recently, was been perceived as a failure to manage the forestry sector. This is regardless of the fact that there is high demand for cheap wood products in the developed and developing world. Moreover, most of the efforts made by the developed countries have been avoiding putting too many constraints to market demands despite of the heavy social and environmental costs in the livelihood of poor people from developing countries. 4.5 Governments and businesses have commonly seen forests as a source of income, growth and employment. The Organisation for Economic Cooperation and Development (OECD) stated “the forestry sector contributes more than 10% to GDP and provides formal and informal employment in developing countries for an estimated 40 to 60 million people”.31 The World Bank estimates that “90% of people living in extreme poverty depend on forests for some part of their livelihoods” (World Bank, 2004a). 4.6 The commoditisation of natural resources has contributed to the narrow scope of the benefits of forests in the world. The reality is that forests have always represented more than just an income or employment provider to communities living in forest areas in developing nations. For indigenous people, the forest traditionally provides them with food, medicine, and wood for housing and energy consumption. Its destruction affects their customs and traditions because it transforms the relationship they have with the forest.32 4.7 The detrimental effect of climate change and the impact of deforestation on poverty and livelihoods have forced us to revisit our perception and relationship with forests. This is a great achievement because grave human rights abuses against environmental activists, and community and indigenous leaders did not manage to spin this around. However, the thirst for consumption of the world’s natural resources continues but there is now more awareness about a common sense approach to natural resource management. 4.8 This newly found awareness need to be supported by policy coherence between development, trade and social policies to avoid unintended results or unwanted consequences. The purpose should be achieving sustainability, which represents a fine balance between our own preservation and the preservation of the world’s rich bio-diversity. The International Development Fund (IFAD) describes that one of the guiding principles of the “Sustainability Approach”33 is being people centred integrating a “holistic component within these principles”. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w36 Environmental Audit Committee: Evidence

4.9 It is important to put natural resources within a new context: the human population has roughly tripled; and new sectors such as urban development (to accommodate the growing population), the growth on livestock and large scale agriculture have become new competitors for land and space. Consequently without a pragmatic recognition that forests and other natural resources might also be finite and threatened as a result of human influence, there will be a lack of responsibility for our surroundings. The unequal distribution of food and conflict over control of the world’s dwindling natural resources presents a major political and social challenge to governments, likely to reach crisis status as climate change advances and world population expands from 6.7 billion to 9.2 billion by 2050.34

Recommendations 4.10 New legislative initiatives in the EU prohibiting the entry of illegally obtained wood in the EU market are encouraging; but without (a) the political willingness to enforce it (b) changing the minds and operations of the timber sector (c) consumer awareness and responsibility to their own consumption (d) new relationship between us (humans) and our natural resources, it will be very unlikely that forests will survive for long. This policy coherence between trade, development and environmental protection needs to be in place before forests disappear forever.

Testimonies from community leaders in Honduras 4.11 David Amador, from the “La Libertad” community in Honduras35 “Illegal logging here is unmerciful. Illegal loggers take the wood away with no permits, leaving our area deserted, deforested. 100,000 feet of wood are taken every year in our community and in the ‘El Diamante’ community, located next to ours. This is especially grave as water sources are in ‘El Diamante’. Illegal logging has an impact on water and air. Fires are heavier because illegal loggers leave branches and wood behind, which along with the heat, means the likelihood of fires will increase. In the summer (dry) season, the rivers’ water levels lower; as a result, we do not get enough water in the winter (rainy) season. Water sources are suffering.” “The message I would send to the European Parliament is that if wood continues to be taken, this area will end up being a desert. Europeans should be aware of what’s happening in here, in the community and stop buying illegal timber. It is ok that they buy good quality timber but always timber that is legal.” 4.12 Javier Rosales, president of the Paya river agroforestry cooperative—Paya community, Sico Valley, Honduras36 “As a community, we strive to stop illegal logging. For forests are a heritage we all in the community share. We protect forests not only because of the timber, but because we need to preserve our water sources. If we do not prevent the destruction of the forests we will end up with no water. Since we have a forest management plan in our community, the situation has improved. Thanks to the income from the cooperative, we own two cows and a few chickens, which help us to alleviate poverty.”

References 1 This is an edited extract from Progressio’s contribution to Women’s Environmental Network (2010). Gender and the Climate Change Agenda 2 See for example Bates, B, Kundzewicz, Z, Wu, S, Palutikof, J (eds.) (2008). Climate Change and Water. Technical Paper of the Intergovernmental Panel on Climate Change. Geneva: IPCC 3 UN Water and FAO (2007). Coping with water scarcity: Challenge of the twenty-first century, http:// www.fao.org/nr/water/docs/escarcity.pdf (accessed 31 July 09) 4 UN-FAO (2007). Press release: Making Every Drop Count. Rome: FAO. 14 February 2007 5 UN Water and FAO (2007). Coping with water scarcity: Challenge of the twenty-first century, http:// www.fao.org/nr/water/docs/escarcity.pdf (accessed 31 July 09) 6 Stern, N (2006). Stern Review: The Economics of Climate Change. London: HM Treasury 7 Reid, H, Simms, A, Johnson, V (2007). Up in smoke? Asia and the Pacific. The threat of climate change to human development and the environment. London: New Economics Foundation 8 Cap-Net, GWA and UNDP (2006). Why Gender Matters. A tutorial for water managers, Cap-Net and GWA 9 Progressio, CEPES, Water Witness International (2010). Drop by drop: Understanding the impacts of the UK’s water footprint through a case study of Peruvian asparagus, London: Progressio 10 BRIDGE (2008). Gender and climate change: mapping the linkages, Institute of Development Studies, University of Sussex, Brighton 11 Hemmati, M, Gardiner, R (2002). Gender and Sustainable Development, Heinrich Böll Foundation 12 BRIDGE (2008). Gender and climate change: mapping the linkages. Brighton: Institute of Development Studies cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w37

13 Cap-Net, GWA and UNDP (2006). Why Gender Matters. A tutorial for water managers, Cap-Net and GWA 14 Interagency Task Force on Gender and Water (2004). A Gender Perspective on Water Resources and Sanitation. Commission on Sustainable Development, 2004. United Nations Department of Economic and Social Affairs 15 Reid, H, Simms, A, Johnson, V (2007). Up in smoke? Asia and the Pacific. The threat of climate change to human development and the environment. London: New Economics Foundation 16 UNDP (2009). Resource Guide on Gender and Climate Change 17 Centre for Global Change in Reid, H, Simms, A, Johnson, V (2007). Up in smoke? Asia and the Pacific. The threat of climate change to human development and the environment. London: New Economics Foundation 18 Thaxton, M (2004). Gender Makes the Difference: Water, IUCN 19 Cap-Net, GWA and UNDP (2006). Why Gender Matters. A tutorial for water managers, Cap-Net and GWA 20 Cap-Net, GWA and UNDP (2006). Why Gender Matters. A tutorial for water managers, Cap-Net and GWA 21 Interagency Task Force on Gender and Water (2004). A Gender Perspective on Water Resources and Sanitation. Commission on Sustainable Development, 2004. United Nations Department of Economic and Social Affairs 22 Cap-Net, GWA and UNDP (2006). Why Gender Matters. A tutorial for water managers, Cap-Net and GWA 23 Thaxton, M (2004). Gender Makes the Difference: Water, IUCN 24 See for example recommendations for DFID in Mayers, J et al (2009). Water ecosystem services and poverty under climate change: Key issuesand research priorities, London: IIED 25 Water and Climate Coalition (2010). Water and Climate Roadmap 26 Siles J (2004). Gender Makes the Difference: Watershed Management, IUCN 27 Hemmati M and Gardiner R (2002). Gender and Sustainable Development, Heinrich Böll Foundation 28 Thaxton M (2004). Gender Makes the Difference: Water. IUCN 29 Interview by Brie O’Keefe and Jo Barrett, Progressio, 2009 30 2008 “Practical Guidance for Sustaining Forests in Developing Cooperation” World Bank (ISBN: 978–0- 8213–7163–3) http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTARD/EXTFORESTS/ EXTFORSOUBOOK/0,,menuPK:3745501~pagePK:64168427~piPK:64168435~theSitePK:3745443,00.html 31 2009—“Natural Resources and Pro-poor Growth: The Economics and Politics—A good practice paper” DAC Guidelines and Reference Series OECD (Revised Version) 32 2010—Forest and Agriculture Organisation (FAO) Global Forest Resources Assessment 2010 No.163 Main Report 33 IFAD: The Sustainable Livelihoods Approach: http://www.ifad.org/sla/index.htm 34 http://www.guardian.co.uk/environment/2008/apr/16/food.biofuels?intcmp=239 35 Interview by Keith Ewing, Progressio, 2010 36 Interview by Lizzette Robleto, Progressio, 2010 25 January 2011

Written evidence submitted by DfID office Congo 1. Please outline the specific developmental challenges the DRC faces (both environmental and non- environmental) and DFID’s country office approach and priorities The Democratic Republic of the Congo (DRC) is off track on all the MDGs and despite being the world’s second poorest country is significantly under-aided.44 What happens in DRC matters for the country itself, but is also of regional and global importance. Instability in DRC has already led to Africa’s first major inter- state war, and continues to pose a threat to the region. It has vast natural resources, but decades of conflict and corruption have left it chronically unstable, lacking infrastructure and social services, and made it one of the world’s most dangerous places to be a woman. At the same time, DRC has vast potential. Its mineral reserves, major new oil discoveries, the world’s second largest tropical rainforest and the world’s third largest hydropower potential should have turned the country into an engine for African growth. 44 In 2008, aid per capita was $25 compared with $96 in Rwanda and a Sub Saharan African average of $49. DFID has recently become the largest bilateral donor to the DRC. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w38 Environmental Audit Committee: Evidence

The DRC ranks first in Africa from the standpoint of the size of its forests and, more importantly, in the contribution that these can make to the stability of the global environment, biodiversity and climate. Pressure on the DRC to protect its forests to help mitigate global climate change is growing. With the return of relative peace and security, the DRC’s forest resources are under mounting pressure from vested interests and market forces. Currently, the poor state of transport infrastructure is the main bottleneck to logging expansion, but this situation is changing. The implications of a resurgent logging industry, and the opening up of forest areas for agriculture and other uses, are that the previously low rates of deforestation in the DRC could significantly increase. The UK mission in DRC is to build peace and reduce poverty. DFID contributes to this by working with partners to help: (i) build a capable and accountable state; (ii) deliver a peace dividend by improving access to basic services and improving economic growth; (iii) reduce remaining conflict and its impacts. Our largest programmes are in humanitarian assistance, road construction & rehabilitation, community development and governance reform. Our programme budget in 2010–11 is £138 million. We are currently in the process of setting our strategy for 2011–15 which is likely to prioritise governance & security, wealth creation (incl. roads), health and humanitarian assistance.

2. Has DFID DRC undergone the Strategic Climate Programme Review yet? If so, what were the outcomes? If not, when is your Strategic Programme Review scheduled? DFID DRC has not undergone a Strategic Climate Programme Review, yet. In line with all other DFID country programmes we expect to carry out such a review by December 2013.

3. How does DFID DRC manage the tensions between development and environmental protection? DFID DRC is keenly aware of these tensions. Our resident infrastructure and environment adviser is constantly engaged in discussion with GoDRC, donors and other stakeholders to stay on top of developments in this area and identify opportunities for DFID to contribute constructively (eg through the Thematic Group on the Environment led by the Minister of Environment, Nature Conservation and Tourism). All our projects above £1 million go through an environmental screening process and interventions with a potential to cause detrimental environmental impacts (eg roads and mining) generally go through additional, more in-depth assessments (see below). While these tensions clearly exist, there are also opportunities for promoting development through environmental protection. The UK is strongly supporting the development of mechanisms to ensure that the DRC and its people benefit from the protection of the country’s forests and other precious ecosystems, most notably through the UK’s £50 million contribution to the Congo Basin Forest Fund (CBFF). Established in 2008 by the Governments of the UK and Norway, the CBFF provides “grant” funding to government, civil society and the private sector organisations for projects aimed at reducing the rate of deforestation and alleviating poverty in the Congo Basin.45 The Fund is managed on behalf of its two donors by the African Development Bank (AfDB), in Tunis, with regional representation in DRC and Cameroon. To date projects operating in DRC have been significant recipients of the Fund’s resources, seven of the fourteen that are fully approved are operating in DRC alone. Three further projects are trans-boundary with neighbouring Congo Basin countries. Projects include: — Support for the development and generation of accurate forest monitoring data, methods and strategies for monitoring national forest carbon. — Developing a resource base for biomass and wood energy and examining and developing markets for non-timber forest products. — Phasing out slash-and-burn agriculture and piloting the use of biochar to enhance soil fertility and increase (sedentary) agricultural production.

4. What is DFID’s environmental impact in the DRC? How do you ensure DFID DRC does not have a detrimental environmental impact? DFID DRC is taking the environmental impact of our development programme extremely seriously. Over the past few years we have developed a framework for assessing and managing environmental risks in the roads sector which is now widely regarded as exemplary by our partners. In general terms, the most important measure is the environmental screening process which is part of the design phase of each project. It identifies the most important environmental risks and recommends how these should be managed during implementation. For initiatives that are most likely to produce adverse environmental impacts, we have put in place special measures to mitigate these risks as much as possible. For example for our mining sector reform project, a 45 Congo Basin countries eligible for funding are: Cameroon, DRC, Republic of Congo, Gabon, Central African Republic, Equatorial Guinea, Sao Tome and Principe, Rwanda, Burundi cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w39

Strategic Environment and Social Assessment (SESA) will be carried to identify the environmental and social impacts related to mining growth and to recommend priority actions for mitigation.

The sector that represents the biggest risk to the environment is roads construction and rehabilitation which is also vital for economic and social development. Our approach in this sector has evolved significantly over the last five years and is now regarded as best practice by national and international partners. All our current roads projects have substantial components for the assessment and management of environmental risks (up to 15% of project budgets), well above what other funders are currently providing (although there is increasing interest from other donors to follow our example).

For example, for the ProRoutes roads rehabilitation programme a Strategic Environmental and Social Assessment framework was developed prior to project start. Using this framework, detailed environmental and social impact assessments are carried out for all road axes. These assessments set out the actions required to mitigate the most important likely direct and indirect environmental and social impacts (including Environmental and Social Management Plans, Relocation Action Plans, and Indigenous People Development Plans). For example for the Route Nationale 5 between Uvira in South Kivu and Kasomeno in Katanga, the assessment, which was carried out in 2010, recommended support to the DRC Institute for Nature Conservation to strengthen the management of protected areas along ProRoutes roads as well as HIV awareness activities for workers and local communities. These measures will be taken forward through a specialist unit associated with the project and run by an international firm of experts. Our roads sector environmental policy paper (attached) explains DFID DRC’s strategy for the road sector.

5. Please could you provide details of the major projects funded by multilateral donors in the DRC

The United Nations (UN) have a significant presence in the DRC, including the world’s largest peacekeeping mission (MONUSCO), large-scale humanitarian assistance (through OCHA, WFP, UNICEF etc), human rights monitoring and promotion programmes and a development programme through the United Nations Development Programme (UNDP) which focuses on governance and poverty reduction. The UN’s Environment Programme (UNEP) is very active in the DRC, supporting several national parks and helping the country generate public revenues in return for carbon storage in forests (through the UN-REDD—Reducing Emissions from Deforestation and Forest Degradation in Developing Countries—initiative).

The World Bank’s Country Assistance Strategy for 2008–11 focuses mainly on three pillars: — Promotion of good governance and consolidation of peace. This includes support for natural resources management, public financial management, and public administration reform. — Achievement of sustained and shared economic growth through infrastructure rehabilitation and expansion; and private sector development to foster economic diversification. — Improved implementation of poverty alleviation programs, with emphasis on health, education and HIV/AIDS; underserved communities, including indigenous communities; and the rural sector.

The World Bank’s main entry point for the environment is its forestry programme. There are also plans to contribute to Inga rehabilitation.

The European Union’s current programme (EDF 10, 2008–13) has three strategic priorities: (i) good governance, (ii) transport and infrastructure and (iii) health. Environment and forestry is a cross-cutting priority together with regional integration and the promotion of commercial ties.

The African Development Bank’s current Strategy Paper for the period 2008–12 focuses on two pillars: (i) support for good governance, and (ii) promotion of pro-poor growth. The first pillar is targeting the following objectives: (i) improvement of public finance management through enhanced monitoring of expenditures and mobilization of government revenues, (ii) transparency in the management of public and natural resources, and (iii) improvement of the business. Under the second pillar, the Bank will promote: (i) the reinforcement of basic infrastructures, particularly in the urban and rural road network, (ii) sanitation and greater access to drinking water in urban and rural areas, and (iii) electrification.46 Both pillars aim to mainstream gender and the environment as priority cross-cutting issues.

In addition to traditional multilateral and bilateral development assistance, the recent entry of China is likely to have a major impact on the DRC environment. A $6 billion “minerals for infrastructure” deal, completed in 2009, is expected to reconstruct and rehabilitate thousands of kilometres of roads throughout the country. In a partnership that is the first of its kind in Africa, DFID is currently working with GoDRC and China to ensure that the environmental impact of these investments are properly assessed and mitigated. We are supporting GoDRC to develop environmental and social standards for large-scale road projects which are currently turned into a law that will apply to all new investments. 31 January 2011

46 This includes lending to support the rehabilitation of the Inga hydroelectric dam. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w40 Environmental Audit Committee: Evidence

Written evidence submitted by DfID office Indonesia 1. Please outline the specific developmental challenges Indonesia faces (both environmental and non- environmental) and DFID’s country office approach and priorities A: Indonesia: Key Facts — Population: 240 million. — GNI per capita: $3830. — People living on less than $1 per day: 13 million. — People living on less than $2 per day: 105 million. — Life expectancy: 68.6 years. — Net enrolment in primary education: 85%. — People living with HIV and AIDS: 293,000. — Children dying before the age of five: 1 in 22. — Mother dying in childbirth: 1 in 438 births.

B: The context and development challenges in Indonesia In the last 10 years Indonesia has moved swiftly from an autocratic regime to an open, vibrant and decentralised democracy, with over 530 local governments. It is a member of the G20 and increasingly aims to spread its influence beyond its pivotal role in ASEAN. Indonesia is the sixth largest country in the world. It has huge oil, gas and coal resources, the world’s third largest area of tropical forest, 12% of the world's mammals, 16% of the world's reptiles and amphibians, 25% of the world’s fish and it is the richest country in the world in terms of biological wealth. Indonesia is one of the most disaster-prone countries in the world, in terms of incident and loss of life only behind Bangladesh. Its topography and geographical position mean that it experiences daily earthquakes and volcanic eruptions with dangerous impacts on densely-populated areas. Indonesia survived the economic crisis incredibly well, averaging over 5% growth throughout, with predictions for 6.5% growth in 2010–11. The economy is driven by the export of primary commodities and domestic consumption. Main constraints on growth are a continuing lack of quality infrastructure, the high cost of capital and a poor business climate, precluding direct investment in real sectors: the 2009 Doing Business Report of the World Bank ranks Indonesia 122nd of the 183 countries. The President confirmed in his 2011 New Year’s Day speech that equity remains the basic principle in the government’s long-term economic policy. Governance and market failures mean the economy under-performs on poverty reduction and investment in well-being for the poor. Although Indonesia has made progress against MDGs, 33 million people or 14% of all Indonesians, live below the national poverty line of $1.55 per day whilst 105 million people live on less than $2 a day. Indonesia is the sixth largest contributor to maternal deaths worldwide and 20,000 women die as a result of childbirth each year in Indonesia. The maternal mortality rate is three times that of Vietnam and six times that of China. Over a quarter of all children under five in Indonesia are undernourished. Less than 1% of Indonesians have access to piped sewerage services. Only one in two households has access to clean water. Only 63% of all households have access to sanitation.

As the world’s 3rd largest CO2 emitter and 2nd largest contributor to deforestation, Indonesia presents both a global problem and a global opportunity. Emissions are predicted to rise above 3,500 million tonnes of CO2e by 2020, at least 2/3 originating from forests and peat lands. Genuine saving rates—the amount of national revenue gained from natural resource extraction reinvested in human development—have dropped from 12% to less than 3%, suggesting the current pattern of growth is unsustainable.47 Economic consequences of climate change could amount to annual losses between 2.5 and 7.0% GDP by 2100. Indonesia's GHG emission mix is driven by a complex set of economic and governance factors and is characterised by the fact that its 75% is from land use, land-use change and forestry. In relative terms, the energy sector is the fastest growing emitter. Energy capacity is expected to grow five-fold by 2025 and resulting emissions are expected to grow seven-fold due to an increase of coal in the national energy mix under business- as-usual (BAU). National policies on energy aim for a 17% share of renewables in the national energy mix by 2025. The Government of Indonesia, in particular the Office of the President, is well aware of the above issues and made a strong political commitment to combating climate change: a 26% reduction of GHG emission through national action or a 41% reduction with international assistance against business as usual by 2020. Indonesia has the opportunity to craft an increasingly green economy, that protects and invests in biodiversity and that delivers sustainable and equitable growth for its citizens. 47 A Strategic Assessment of Indonesia’s Prospects for Growth, Equity and Democratic Governance, Harvard Kennedy School Indonesia Programme, 2010. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w41

C: Country Office Approach and Priorities DFID is in the final few months of its country strategy for 2008–11. The attached country plan sets outs the three main priorities for DFID Indonesia: the development of stronger and more accountable institutions; greater progress against off-track MDGs, in particular maternal health; and progress on climate change in Indonesia. In December 2009 DFID exchanged letters with the Government of Indonesia agreeing to a five year programme focusing on climate change over 2010–15, with a budget of £50 million. This commitment and the future direction for DFID Indonesia have been part of DFID’s Bilateral Aid Review. The intention is that from 2011 onwards DFID focuses exclusively on issues of climate change in Indonesia, and delivers this by forming a joint UK Climate Change Unit with other government departments located in the British Embassy and withdraws from development work in other areas. Conclusions of the Review have not yet been announced by the Secretary of State.

D: DFID Results in Indonesia — DFID provided £38 million over five years for post-tsunami reconstruction of Aceh and Nias, helping to make possible the rapid rebuilding of 140,000 new and rehabilitated houses, 3,500 km roads, 100 health facilities and 1,488 schools. — A DFID grant to a UK-based NGO and its Indonesian counterpart helped them train local NGOs to record illegal logging and log smuggling from Papua to China, enabling them to report this to law enforcers who acted to bring this to an end. — In 24 districts, DFID support helped train 5,500 midwives to provide emergency care to mothers and babies immediately after birth. — Innovative analytical work funded by DFID on decentralised service delivery led the Government to introduce its flagship $1.5 billion annual national community empowerment and social protection programme—the world’s largest. — DFID support for the Extractive Industries Transparency Initiative has led to the drafting of a Presidential Regulation which will mean that large oil, gas and mining firms will report the revenues they pay to the government, the government will publicise the revenues received from those firms, and both sets of information will be independently verified. — DFID support to local government has led to 14 districts, covering five million people, adopting poverty reduction strategies integrated into the district development plans. — A DFID-funded study on Indonesian peat lands has shown that significant reductions in carbon emissions can be made through: prevention of uncontrolled fires on peat land; conservation of natural forest; better management of plantations on peat; and revisions of local land use plans.

2. Has DFID Indonesia undergone the Strategic Climate Programme Review yet? If so, what were the outcomes? If not, when is your Strategic Programme Review scheduled? Due to the intention to focus exclusively on climate change from 2011 onwards it was judged that a Strategic Climate Programme Review was unnecessary.

3. How does DFID Indonesia manage the tensions between development and environmental protection? DFID Indonesia has never treated development and environmental protection as being automatically in tension. Our current focus is to help build the economic and political cases for sustainable growth: that is growth that treats Indonesia’s vast environmental wealth as a long-term asset rather than the short-termism that dominates economic and political thinking currently. Our current work includes economic analysis on how best to protect Indonesia’s peatlands, technical assistance to develop green investment funding mechanisms with the Ministry of Finance and analysis of the political economy of natural resource management at local and central levels with a view to influencing it to a more sustainable footing. At provincial level DFID-funded technical assistance is helping the Governor of Papua to develop a plan that seeks to save 5.1 million ha of forest currently legally designated for conversion to other use, and avoid up to 1 gigatonne of carbon emissions at the same time it focuses on increasing returns to local small-holders and reducing the high levels of poverty in Papua. The long-running Indonesia Multi-Stakeholder Forestry Programme from 2001 onwards has focused on supporting local stakeholders to both protect their environment through community management of local resources and sustainable forest management and to increase their well-being and incomes. It has also had an impact on illegal logging itself part of the environmental damage being done in Indonesia. See http:// www.mfp.or.id/. We have also sought to include environmental work in broader development programmes so for example the Decentralisation Support Facility that we have established and funded to deliver better services and improve the quality of Indonesia’s governance has included work to build local government capacity on sustainable management of their natural resources and on spatial planning. Similarly within our support to Indonesia’s National Community Empowerment Scheme we specifically earmarked £1 million of funding for green projects on waste and energy production at community levels. Where we have seen tensions, such as the allegations in 2009 that the post-tsunami rehabilitation programme in Aceh had led to high rates of deforestation we have ensured that our implementing partners, in this case the World Bank, have investigated these cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w42 Environmental Audit Committee: Evidence

thoroughly and taken action to address greater sustainability in their programming. It is worth noting that also under the MDF programme projects for forestry conservation have been approved. For existing projects, environmental issues have been addressed as necessary through Environmental Screening Note.

4. What is DFID’s environmental impact in Indonesia? How do you ensure DFID Indonesia does not have a detrimental environmental impact?

It is impossible to say exactly what DFID Indonesia’s environmental impact is. We aim to have a positive impact by producing analysis and action that helps conserve environmental resources, particularly those related to land use and forestry whilst achieving poverty reduction but this is un-quantifiable. At an overall strategy level we consider environmental protection as an important part of impact analysis. At project and programme level environmental screening notes provide a “first line” of analysis on environmental impact. DFID Indonesia has just recruited its first Sustainable Development Adviser from the Environment cadre who will offer advice on environmental impact. We also work closely with Indonesian and international organisations to help inform us on potential environmental risks, including WWF. At office level we monitor air miles and utility bills with a view to year-on-year reductions.

5. Please provide details of the major projects funded by multilateral donors in Indonesia Please see attached Excel sheet, drawn from the Government of Indonesia’s own reporting systems.

6. Please could you provide details on the projects listed below: 1. Indonesia Tsunami: Multi Donor Trust Fund for Aceh and Mias (107149). 2. Support for the Indonesia climate change trust fund (201672). 3. CCAP mobilising actions in Indonesia (220494). 4. EITI Senior Advisor to Indonesia (201052). 5. Support to climate change programme in Indonesia (114437).

6.1 Indonesia Tsunami: Multi Donor Trust Fund for Aceh and Nias (107149) The project’s rationale and objectives

The areas of Aceh and Nias were hit by a tsunami in December 2004. DFID has been a major contributor to the reconstruction of Aceh and Nias: DFID Ministers allocated £55 million for emergency assistance to Indonesia in the immediate aftermath of the tsunami, which was managed by CHASE and then allcated a further £59 million for longer term reconstruction. The great majority of this, ie £38.5 million, is channelled through the Multi Donor Fund for Aceh and Nias (MDF), where UK is the third largest contributor. The contribution to MDF was managed by DFID Indonesia staffs and closed under DFID system in January 2010.

Project goal

The reconstruction of Aceh and Nias results in improved economic and social welfare of the entire population.

Project’s purposes

To respond effectively and efficiently to the immediate and longer-term needs of the population in Aceh and Nias affected by the tsunami and earthquakes that have been identified through the GoI Agency for Reconstruction and Rehabilitation of Aceh and Nias (BRR), local governments and the population

The project’s environmental impact

All infrastructure-related projects in the MDF conduct appropriate impact assessments and meet adequate environmental standards (as determined at design stage) after completion. One of the project outputs of the MDF is “To contribute to sustained environment in the recovery process”. The impact weighting of this output was 15%. This output scored 2—“Likely to be largely achieved”—in DFID’s Project Completion Report. The output covers indicators on solid waste management, forest conservation and management (one is example: Percentage of natural forest cover in existing designated conservation and protection forests in the target area retained at end of project). In 2009 there was criticism about the tsunami response causing deforestation. This criticism was levelled at the National Agency for Reconstruction, the BRR. DFID along with other partners contributing to the MDF raised this issue at the MDF Steering Committee and asked for further analysis and a response from the MDF. This analysis showed that MDF projects filled the critical need to protect the environment from the impacts of the US$7 billion reconstruction program. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w43

Whether these environmental impacts were deliberate or unplanned: Deliberate as part of the project

A breakdown of the project’s funding Total DFID’s contribution to MDF was £38,511,571, which is around 10% of total MDF budget. The fund has been used for projects under MDF, including AFEP (Aceh Forest and Environment Project), IREP (Infrastructure Reconstruction Enabling Program), IRFF (Infrastructure Reconstruction Financing Facility), RALAS (land titling project), REKOMPAK (housing project).

Any requirements placed upon/standards required of the government of Indonesia or other aid recipient agencies: There was no conditionality attached to this project.

Who is implementing the project: Multi Donor Trust Fund (MDF) managed by the World Bank.

Environmental screening note: QUEST Doc. No. 807226

6.2 Support for the Indonesia climate change trust fund (201672) The project’s rationale and objectives In September 2009 the Ministers of Finance and Development Planning launched the Indonesia Climate Change Trust Fund (ICCTF), nominating UNDP as an interim trustee until a national institution is ready to take on this role in 2011. DFID has worked with other donors to establish a common set of objectives for the way the Fund will operate i.e. it should: — be a strategic tool to reduce emissions and build resilience; — support priority actions agreed across government within a coherent framework; — focus on catalytic, transformational, demonstration or analytic products; — have convening power and provide development partners with an opportunity for high-level policy dialogue and influence on climate change (unavailable through bilateral programmes alone); — have a strong results framework that can demonstrate impact. It must include local government and civil society; — have an effective and transparent governance mechanism; and — have strong political backing from senior ministers in government.

Project goal: Indonesia achieves low carbon, equitable and climate resilient development.

Project purpose: To ensure the GoI can provide more effective leadership and management of climate change programming to deliver emissions reduction and poverty reduction outcomes/

The project’s environmental impact: Being a project related with climate change, its proper and effective implementation will make it able to achieve the project’s goal and purpose, which will create positive impact to environment.

Whether these environmental impacts were deliberate or unplanned: Part of the project.

Project funding: DFID has contributed £4.7 million, pooled with the AusAid’s AUD 2 million and the Swedish Embassy’s SEK 2 million. ICCTF has approved a programme on peat land management for reduced emissions by Ministry of Agriculture, an energy efficiency programme by Ministry of Industry and public awareness raising programme by Meteorological and Climatology Agency. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w44 Environmental Audit Committee: Evidence

Any requirements placed upon/standards required of the government of Indonesia or other aid recipient agencies: There was no conditionality attached to this project.

Who is implementing the projects: UNDP (interim fund manager).

Environmental screening note: QUEST Doc. No. 2554674

6.3 CCAP mobilising actions in Indonesia (200494) The project’s rationale and objectives: Indonesia is the fourth most populous country in the world and possesses an ecologically diverse and fragile ecosystem, including about 10% of the world’s remaining tropical rainforests. Indonesia is among the top three GHG emitters in the world, in large part due to land-use change and deforestation (LUCF). While GHG emissions in other sectors in Indonesia are much lower than the LUCF emissions, their contribution is significant and increasing. The country’s GHG emissions from non-LUCF sources in 2000 were 500 Mt CO2e, equal to one-fourth of India’s total, with about 60% from fossil-fuel combustion CO2. The electricity sector is very important in terms of climate change strategies in Indonesia. With more than 80% of Indonesia’s electric power capacity being fossil-fuel fired (and two-fifths of its annual generation from coal) and a large renewable energy potential, there is significant promise for achieving emissions reductions in this sector. In cement and other minerals, process CO2 emissions in Indonesia totaled 11 Mt in 1994. Other important sectors in Indonesia are iron and steel, pulp and paper, and transportation. With a population over 200 million, rising per capita incomes and rapidly expanding consumption of fossil fuels, Indonesia’s importance in global efforts to combat climate change will continue to increase in the coming years. The objective of this study is to explore the possibilities of developing and applying a sectoral approach for GHG mitigation in key industries in Indonesia, to encourage climate actions in this country, and to facilitate their participation in potential international climate change frameworks under consideration. The project will also aim to propose appropriate types of sectoral actions and approaches under two defined timeframes: (i) Present to 2012, and (ii) Post-2012 at the national and international levels. This approach, based on reducing emissions in one or more individual strategic sectors, offer a promising way forward for Indonesia.

The project’s environmental impact: Being a project related with climate change, its proper and effective implementation will make it able to achieve the project’s goal and purpose, which will create positive impact to environment.

Whether these environmental impacts were deliberate or unplanned: Planned.

A breakdown of the project’s funding: Accountable Grant, £450,000.

Any requirements placed upon/standards required of the government of Indonesia or other aid recipient agencies: Nil. There is no conditionality attached to this project.

Who is implementing the projects: Center for Clean Air Policy (CCAP).

Environmental screening note: ESN is not required for project up to £1 million

6.3 EITI Senior Advisor to Indonesia (201052) The project’s rationale and objectives: EITI provides an outstanding opportunity for Indonesia to raise the standard of reporting and transparency of its extractive industries to international levels, in an effort to strengthen governance and the investment climate. In 2006 the IMF mission recommended that the adoption of EITI would help Indonesia tackle the lack of transparency and risk around extractive industry revenues. The purpose of this project is to support initial cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w45

stages of implementation of the Extractive Industries Transparency Initiative (EITI) in Indonesia. The project has been successful in that Indonesia has now met the criteria to become an EITI Candidate country. In October 2010, Joseph Stiglitz a Nobel laureate in economics said, “Indonesia is to be congratulated on joining the EITI. It has special significance given the importance of natural resources in Indonesia's economy and the example Indonesia will set for other countries in their struggle to ensure that the fruits of their natural resources are enjoyed by all citizens”.

The project’s environmental impact:

Extractive industries in Indonesia clearly have massive environmental impact, more responsible companies seek to limit and/or mitigate against those impacts, and less responsible companies do not. If EITI is fully successful Indonesians will be able to track the revenues paid by companies to government alongside the revenues received by government from those extractive industries. This will reduce the amount of corruption in the industry and it will also make fully clear for the first time the revenues that Indonesia is receiving in return for both the resources and the environmental impact of the extraction of those resources. NGOs have been strongly supportive of EITI because they believe that knowing the scale of resources paid and received enables them to be more successful in arguing for those resources to be re-invested in environmental protection. It is also the case that generally the least responsible and therefore most environmentally damaging companies are also those where corruption is most present. By making revenues more transparent some of those companies may be forced to leave the sector.

Whether these environmental impacts were deliberate or unplanned:

Deliberate.

A breakdown of the project’s funding:

Total of DFID funds is £700,000 for the period of 2006–10.

Any requirements placed upon/standards required of the government of Indonesia or other aid recipient agencies:

Nil. There is no conditionality attached to this project.

Who is implementing the project:

An EITI consultant/Adviser was appointed and funded by DFID to implement this project in close collaboration with the World Bank which hosted him in the Indonesia Resident Mission.

The environmental screening notes:

Nil. Since this project budget is below £1m an environmental screening note is not required.

6.4 Support to climate change programme in Indonesia (114437)

The project’s rationale and objectives:

In December 2008 DFID signed a Letter of Agreement (LoA) with the Government of Indonesia to support poverty reduction through national responses to climate change. DFID committed up to £10 million until 2011, and around £1.2 million has been allocated to Project No. 114437, which includes: — the provision of in-house expertise (a DFID adviser seconded to the Government Investment Centre and to the Fiscal Policy Unit in the Ministry of Finance. He focuses on “green” investments through Indonesia’s sovereign wealth fund while seeking to generate evidence-based advice on fiscal policy); — specialist consultancy inputs to: BAPPENAS to help define approaches to mitigate emissions from peat lands; Min. of Finance on legal analysis of the finance for climate change; and the National Climate Change Council (DNPI) to develop their capacity to plan for adaptation to climate change; — consultancy on Indonesia Low Carbon Planning; and — study on LULUCF. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w46 Environmental Audit Committee: Evidence

Project’s goal: Improve Indonesia's investment and policy framework for climate change adaptation and mitigation.

Project’s purpose: BAPPENAS/DFID committee receive high quality technical support to achieve project goal.

The project’s environmental impact: Being a project related with climate change, its proper and effective implementation will make it able to achieve the project’s goal and purpose, which will create positive impact to environment.

Whether these environmental impacts were deliberate or unplanned: Part of the project.

Breakdown of the project’s funding 114437–101 Special Technical Personnel for Climate Change Programme 74,169.64 114437–102 Accountable Grant for British Council 1,031,982.31 114437–104 Support to Indonesia Low Carbon Planning 83,162.00 114437–105 AG for TAF on LULUCF study 38,000.00 TOTAL 1,227,313.95

Any requirements placed upon/standards required of the government of Indonesia or other aid recipient agencies: Nil. There is no conditionality attached to this project.

Who is implementing the project: British Council, The Asia Foundation, consultants.

The environmental screening note: QUEST Doc. No. 1922179 31 January 2011 A Strategic Assessment of Indonesia’s Prospects for Growth, Equity and Democratic Governance, Harvard Kennedy School Indonesia Programme, 2010.

Written evidence submitted by DfID office Malawi Question 1 Please outline the specific developmental challenges Malawi faces (both environmental and non- environmental) and DFID’s country office approach and priorities Malawi is one of the poorest countries in the world, with GDP per capita of $280. The economy is dominated by agriculture which contributes a third of GDP and 80% of exports. It faces a number of inherent challenges: landlocked, densely populated and growing fast, poor access to international markets, limited resource endowment, high HIV/AIDS prevalence and low levels of education and skills. Despite this the Malawian economy has grown by an impressive 7% a year over the last five years, which has mainly been driven by exports (mainly tobacco) and good harvests. To maintain this progress Malawi will need to identify new sources of growth, and tackle the binding constraints to private sector investment: an uncompetitive exchange rate, lack of access to finance, unreliable power supply, and poor access to markets. Malawi has also made impressive progress on many MDGs in the past six years (poverty and hunger, under five and infant mortality, HIV treatment, access to water, even maternal mortality although this remains high). But this is from a low base and gains are fragile to the weather, external price shocks, rapid population growth and changes in donor plans. 90% of the poor are small or medium scale famers, and their crops (and hence food and incomes) are heavily dependent on the single unreliable rainy season. As a result the recent gains in growth and poverty reduction remain fragile. The main current environmental challenges are the loss of forest cover (the de-forestation rate is currently estimated to be between 1% and 2.8%) (FAO 2010) and land erosion and degradation. Forests are primarily being lost through the widespread reliance on firewood for cooking and heat (and, particularly when crops fail, income), and increasing use of land for settlements and agricultural. The risk of land erosion and degradation comes from unsustainable farming practices, deforestation and weather variability (with Malawi regularly facing droughts or floods in isolated areas—which are likely to increase with climate change). More positively Malawi has the lowest carbon footprint in the world, with almost all its production of power coming from hydro-stations. A challenge for the future will be to support Malawi to continue to develop in a way which cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w47

doesn’t significantly increase its impact on the environment—particularly given the pressures to produce more power and identify new sources of growth (such as mining). DFID is one of the largest donors in Malawi, with a programme of up to £80m in 2010/2011, supporting the Malawian Government’s Growth and Development Strategy (MGDS). Our Country Plan focuses on three areas: — Good Governance, including access to justice and public financial management; — Growth and Resilience including agriculture, water and sanitation, access to finance, energy efficiency and private sector development; and — Human Development especially health, HIV/AIDS and education. As with all DFID programmes, DFID Malawi’s programme is being reviewed as part of the Bilateral Aid Review, with a new Operational Plan being drafted for the four years 2011–15. DFID Ministers will be communicating the details of future plans shortly.

Question 2 Has DFID Malawi undergone the Strategic Climate Programme Review yet? If so, what were the outcomes? If not, when is your Strategic Programme Review scheduled? Malawi was not targeted as one of the Strategic Climate Programme Review (SCPR) pilot countries, and is therefore yet to implement a SCPR. We plan to implement a SCPR during the four year (2011–15) timeframe of our new Operational Plan. The date will be confirmed as part of finalising our Operational Plan, but our intention is to implement the SCPR as early as possible in the four year cycle to maximise its impact on our programmes. We are closely following the ongoing pilots in other countries to ensure we learn lessons for our own Review.

Question 3 How does DFID Malawi manage the tensions between development and environmental protection? The answer to Question 4 below, covers both Questions 3 and 4.

Question 4 What is DFID’s environmental impact in Malawi? How do you ensure DFID Malawi does not have a detrimental environmental impact? DFID Malawi manages the tensions between development and environmental protection by ensuring that all its development projects are subjected to serious environmental screening. Up until December 2010, all projects over £1m were required to complete formal environmental impact assessments. An example of this—the Environmental Screening Note for the Input and Maize Markets Interventions 2007–11 project—is attached. Since January 2011, all new DFID projects, regardless of value, have to complete a Business Case based on HM Treasury’s ‘five case’ model. The second of these five cases, the Appraisal Case, includes an explicit consideration of the project’s likely impact on the environment and on climate change. For all interventions the focus is on a) minimising and mitigating negative impacts on the environment or on climate change, and b) maximising positive impacts on climate change or the environment offered by the intervention. Our aim is to pursue development without compromising the environment and natural resources, so that the future wellbeing of Malawians is not sacrificed for today’s development. We therefore assess DFID’s environmental impact in Malawi on a project by project basis at the planning stage. Examples of this are given in the answer to Question 6. We aim to use our programme to help the Government of Malawi tackle some of the major environmental challenges. Malawi’s agricultural based economy depends heavily on natural resources, and particularly soil. Agricultural productivity has been declining due to severe soil degradation, and particularly declining soil fertility. DFID supports the Government of Malawi’s Farm Input Subsidy Programme, which provides affordable fertiliser and seeds to 1.6 million households. The programme has been responsible for reversing the declining soil fertility and improving agricultural productivity. DFID has also been a key player in the development of the Agriculture Sector Wide Approach (ASWAp). This is the Government’s investment plan for agriculture. One of its five pillars is on sustainable land and water resource management. The ASWAp should help ensure that the development of Malawian agriculture is sensitive to the sustainable use and management of the environment and natural resources. DFID Malawi has recently approved a new five year Enhancing Community Resilience Programme. This will help communities manage their natural resources better, adapt to current climate variability and cope with future climate change. The programme includes support to communities on conservation agriculture, forest management and tree planting, flood defences, irrigation, renewable energy and water harvesting. We are also supporting the Government of Malawi to develop a comprehensive climate change strategy to help them effectively respond to future impacts of climate change in a coordinated way. Another key challenge is Malawi’s limited availability of power. We are supporting the Government to roll out an energy efficient lighting programme to help address problems with power shortages while putting Malawi on a low-carbon growth path. This aims to transform the market for light bulbs in Malawi from energy inefficient Incandescent Bulbs to energy efficient Compact Fluorescent Lights, which is estimated to reduce current peak demand by 20%. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w48 Environmental Audit Committee: Evidence

We also aim to ensure that we and our partners are aware of positive and negative environmental impacts of major programmes which may have an impact on the environment, and how to manage these. For example, we are working closely with other Development Partners to convince the Government of Malawi of the need to conduct a comprehensive Environmental Impact Assessment of the Farm Input Subsidy Programme—work which is currently being tendered in anticipation that it will go ahead. On climate change, DFID, the British High Commission and the British Council have a Joint UK Action Plan and active Green Team. DFID’s bilateral work focuses on local adaptation and energy efficiency. We have provided seed funding to the United Nations Development Programme (UNDP) to lead on national strategic / voice work, and the World Bank on carbon finance mechanisms which have significant potential to leverage resources to protect Malawi’s dwindling forests.

Question 5 Please could you provide details of the major projects funded by multilateral donors in Malawi A comprehensive list of ongoing projects, from the Government’s donor database, is attached.

Question 6 Details for the requested projects follow 3. Input and maize markets interventions 2007–11 (113415)—FINANCIAL AID COMPONENT 8. Input and Maize Markets Interventions 2007–11 (113456)—TECHNICAL ASSISTANCE COMPONENT Rationale and objectives The DFID Input and Maize Markets Interventions project provides support to the Government of Malawi’s Farm Input Subsidy Programme (FISP). The FISP provides subsidised fertiliser and seeds to 1.6 million vulnerable Malawian farmers each year. This flagship Government Programme, along with good rains, has helped enable Malawi to be food self sufficient for the five years since the programme began, after decades of reliance on external food aid. The FISP has increased Malawi’s maize harvest by around 750,000 tonnes a year, and the use of high yielding maize varieties by at least a third. The DFID project provides funding for the seeds element of the programme (providing 2.5 million people with affordable seeds in 2010/11) and for management, monitoring and evaluation of the whole programme. The purpose of the project is to increase agricultural production and the development of Malawi’s fertiliser, seed and maize markets. The objectives are to: — Promote the use of high quality seeds, and uptake of legumes, through the seed subsidy. — Increase the participation of the private sector in the procurement and distribution of seeds in order to strengthen the agricultural input market. — Generate monitoring and evaluation evidence to inform programme development, including evidence on efficiency, effectiveness, impact and value for money. — Develop a variety of market based risk management tools (such as macro weather insurance).

Environmental impacts — Increased yields are likely to lead to reduced pressure to open up additional land for cultivation, which will have a positive impact on the rate of loss of forest cover. — Chopping trees to sell for firewood and charcoal is a common coping strategy for households when their crops fail. Increased food security should reduce the need for households to resort to this strategy. — Soil mining is a critical environmental problem facing Malawi. Increased fertilizer use replenishes some of the nutrients being mined. — A more specific environmental threat from increased fertilizer use is the possibility of fertilizer run-off and contamination of drinking water sources. This threat has not been assessed to date, but will be included in the forthcoming Environmental Impact Assessment. One of the aims of the DFID technical assistance is to ensure the Government and donors fully understand the environmental threats and opportunities, and are able to maximise the opportunities and minimise the threats. DFID is currently finalising a contract to conduct a comprehensive Environmental Impact Assessment of the FISP, on behalf of the Government and development partners. This will inform our future support.

Deliberate or unplanned? Most environmental impacts were foreseen (and in that sense deliberate).

Project funding breakdown — Financial Aid: £18.4 million (Ministry of Agriculture and Food Security Logistics Unit; weather insurance; improved seed subsidy; Global Positioning Systems to improve crop estimates (GPS)). cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w49

— Technical Cooperation: £1.6 million (external monitoring and evaluation; independent monitoring of subsidized fertiliser sales and stocks; Environmental Impact Assessment; Civil Society monitoring of the programme).

Requirements/standards required of recipient The project is subject to the Government of Malawi’s environmental policies and requirements. The Government has verbally agreed to carry out a specific, comprehensive Environmental Impact Assessment of the Programme, which should be completed during 2011. We await Government confirmation of this in writing, and in anticipation of that are tendering for the work.

Implementer Government of Malawi (for the Financial Aid component); DFID, using numerous consultancy companies or NGOs (for the Technical Assistance).

Environmental Screening Note Attached.

4. Private sector led growth opportunities (113354) Rationale and objectives To provide analysis and technical assistance to explore and catalyse key opportunities for private sector led growth, and understand and tackle the key constraints.

Environmental impact The funding was used for technical assistance and analysis, so there was no direct environmental impact. Some of the analysis was used in ways which could potentially have an impact in the future. For example, it provided an analysis of the energy sector—which included looking at the potential for renewable energy and energy efficiency (such as recommending the roll out of energy efficient light bulbs, which the Government of Malawi is now taking forward with DFID support).

Deliberate or unplanned? Deliberate.

Project funding breakdown Consultancies: £591,440. British Geological Survey: £38,560. FINSCOPE Survey: £200,000.

Requirements/standards required of recipient N/a

Implementer Government of Malawi and DFID, with various consultants (including British Geological Survey, FINMARK)

Environmental Impact Assessment A formal Environmental Impact Assessment was not conducted, as this is not required for projects under £1 million.

5. Malawi unpaved road programme 2009–13 (200901) DESIGN Rationale and objectives This funding was used to help design a potential DFID unpaved road programme, and specifically to develop the first phase of the detailed design works and contracts. The purpose of the potential programme would be to increase rural connectivity and reduce rural transport costs. This would be achieved by tackling the backlog of rehabilitation and maintenance work on the designated unpaved road network, and introducing a new less costly approach to road maintenance (based on the use of tractors rather than heavy equipment). This new approach, along with the rehabilitation of the unpaved road network, would mean the existing Government of Malawi recurrent budget allocations would be sufficient to sustain the roads in good condition. The goal would be to help tackle one of the key constraints to growth in cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w50 Environmental Audit Committee: Evidence

Malawi (poor access to markets), reducing rural poverty by raising household incomes and agricultural productivity.

Environmental impact There has been no environmental impact to date as the project has not been approved [the decision on whether to go ahead is on hold following the outcome of the Operational Planning process currently underway in DFID]. If the project went ahead, we would expect the environmental impact to be minimal. In-situ soil materials would be used for maintenance, with the use of imported and manufactured road building materials minimised. The improvement and maintenance of the road network condition should substantially reduce unit transport costs and vehicle related emissions due to higher efficiency of the transport vehicle operations (e.g. through shorter journeys).

Deliberate or unplanned? Deliberate.

Project funding breakdown £100,000 for design works and contract. £9,000 for economic appraisal.

Requirements/standards required of recipient If the project went ahead, the rehabilitation and spot improvement measures would be designed in accordance with sound drainage engineering practices to avoid the risk of rain water dispersed along the roads causing erosion or siltation on farm or other land adjoining the road.

Implementer Government of Malawi.

Environmental Impact Assessment A formal Environmental Impact Assessment was not conducted, as this is not required for projects under £1 million. There is a draft Environmental Impact Assessment for the full roads programme (prepared under the private sector led opportunities project).

1. Climate Change Action programme (200819) 2. DFID Malawi Climate Change Programme 2009–11 (200904) [Both numbers refer to the same overall project.] Rationale and objectives The project has been designed to help the Government of Malawi plan for climate change, estimate the likely impacts and address the resulting challenges. Responses across Government to climate change are currently uncoordinated and inadequately mainstreamed in the Malawi Growth and Development Strategy (MGDS—the Government’s overarching policy document). The project will also help the Government of Malawi update current assessments and address weaknesses in data related to climate change. The project will develop medium to long term strategic responses to climate change in the country, and help harmonise climate change strategies with other MGDS policies. The specific objectives of the project are: — To develop an evidence-based strategic framework, and associated comprehensive funded programme, for managing the response to climate change in Malawi. — To develop a strategic coordinated response to the challenges that climate change poses for sustainable economic development and national food security in Malawi. — To address the problems that some communities are currently facing due to the impact of climate change by piloting projects on adaptation and mitigation.

Environmental impact The project will focus on technical assistance and analysis so there will be no direct environmental impact. However the analysis will help promote the take-up of policies, strategies and programmes which would have a positive impact on the environment. These include: (1) Land Cover and Land Use Diagnostics developed to inform future development planning— including assessments of the potential for afforestation and other options for alternative land-use, cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w51

with and without carbon finance, and consideration of the potential for other forms of environmental service payments. (2) Carbon finance investment analysis, which will contribute to an assessment of sustainable land use options. (3) Adaptation and Mitigation Interventions, including: — Improving the management of Malawi’s forests. — Establishing the basis for a functional hydrological monitoring and flood warning system. — Identifying priority areas for integrated rain water harvesting and catchment protection schemes, which help to minimise the impacts of floods and improve the resilience of agricultural practices to below normal rainfall conditions. — Establishing a strategic planning process for investing in sustainable watershed management, including: restoration, protecting catchment areas and strengthening climate resilience, rain-water harvesting and sustainable land management practices.

Deliberate or unplanned? Deliberate.

Project funding breakdown £990,000 to support the Government of Malawi’s Climate Change Programme comprising: — £250,000 to the United Nations Development Programme (UNDP) to support the Government’s climate change programme. — £50,000 to the British Council climate change Voice and Debate project. — £50,000 for climate change mainstreaming within DFID and the Joint Resilience Unit. — Up to £640,000 to the World Bank to support the Department of Forestry (currently being finalised).

Requirements/standards required of recipient The project is implemented within the Malawi’s National Environmental Policy (2004).

Implementer Government of Malawi, British Council, UNDP and World Bank

Environmental Impact Assessment A formal Environmental Impact Assessment was not conducted, as this is not required for projects under £1 million.

6. Dedza and Ntcheu Safe Water Supply, Sanitation and Hygiene Promotion and Capacity Building Project (103851) Rationale and objectives Concern Universal has been implementing the project with funding from the European Commission (EC) and DFID since July 2006. The aim is to improve water and sanitation in underserved areas of Dedza and Ntcheu. The objectives are: — To improve access to safe water supply and sanitation facilities and their management, in households, schools and health centres in Traditional Authorities (TAs) Chauma and Kaphuka in Dedza and TAs Champiti and Makwangwala in Ntcheu. — To improve knowledge of key hygiene practices and achieve behaviour change, leading to a reduction of water borne diseases. — To increase capacity of local government service providers and community groups to effectively plan, lead and support water and sanitation development initiatives. — To increase community capacity to recognise and act on its rights and responsibilities in relation to development, gender, HIV/AIDS, and environmental management in relation to the provision of water and sanitation services. — To establish effective systems for monitoring and evaluating the project.

Environmental impact The construction and drilling of new boreholes, and the use of wood or burnt bricks as construction materials, have potential impacts on the environment. cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w52 Environmental Audit Committee: Evidence

The project incorporates a number of features that mitigate potentially negative environmental impacts, including: — including aspects of water resources management in training courses, especially at the community level; — observing health and safety measures on site to ensure protection of the environment and the workers; — involving the beneficiary communities in the sitting of the boreholes and construction processes, and ensuring these are consistent with the guidelines provided by the Ministry of Irrigation and Water Development on the sitting of boreholes; — working with communities to promote the importance of planting grass and trees around their homestead and water points; — installing drainage systems around the water points to reduce risk of contamination and erosion around the water point sites; and — continuous evolution of borehole design to ensure good water yields and user friendly water point facilities.

Deliberate or unplanned?

Most environmental impacts were foreseen (and in that sense deliberate).

Project funding breakdown

DFID contribution to the project is £928,658, with the total project budget (including EC funds) being £2,814,633. The project budget is broken down safe water supply (39%), sanitation and hygiene promotion (33%), community mobilisation (16%) and management (12%).

Requirements/standards required of recipient

All drilling operations are conducted by Concern Universal, and have to follow the Government of Malawi standards and guidelines on the drilling of boreholes. The district councils and the communities in districts and areas where Concern Universal work are responsible for monitoring drilling operations and other works.

Implementer

Concern Universal Malawi.

Environmental Screening Note

A formal Environmental Impact Assessment was not conducted, as this is not required for projects under £1 million.

8. Karonga Earthquake—Humanitarian Assistance (201516)

Rationale and objectives

The project has been designed to provide immediate humanitarian assistance to those made homeless following the December 2009 earthquake, and to build or restore houses for 600 of the most vulnerable families.

Environmental impact

There will be some environmental impact from the production and use of construction materials (e.g. cement, bricks, wood) and potentially the siting of houses. However there were actions taken to help minimise any negative impacts: — The project supported the development of ‘Building Guidelines’ to ensure homes were safer, and more resistant to shocks and the environment such as earthquakes, storms and floods, when rebuilt. These guideline promoted the use of stabilised soil bricks which are more environmentally friendly than burnt bricks (although the use of stabilised soil bricks was not feasible for this specific project given the remote location and cost). — The training given to beneficiaries promoted, and explained the value of, tree planting for people building houses, which is being reinforced by the construction experts on the ground. — All wood purchased by the project was from the Government endorsed factory supplier. cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w53

Deliberate or unplanned? Most environmental impacts were foreseen (and in that sense deliberate).

Project funding breakdown Up to £200,000: UNICEF to provide emergency relief. £250,000: Malawi Red Cross, for emergency shelter. £500,000: Malawi Red Cross, for recovery and reconstruction.

Requirements/standards required of recipient The project is implemented within the Malawi’s National Environmental Policy (2004).

Implementer Malawi Red Cross, UNICEF.

Environmental Impact Assessment A formal Environmental Impact Assessment was not conducted, as this is not required for projects under £1 million. However, environmental issues will be picked up in the end of project evaluation to ensure we learn lessons and are able to understand and address any unforeseen negative impacts. 31 January 2011

Written evidence submitted by DfiD office Mozambique 1. Following Mozambique's economic collapse in 1986, the country began a wide-ranging process of reform, with the support of the international community. Mozambique has faced numerous challenges since the end of civil war and first elections in 1994, including more then 15 years of adjustment and reform. Mozambique remains one of the poorest countries in the world, with a GDP rank of 169 and a Human Development Index of 172 (UNDP 2009). Median income was 10%t lower in 2008 than 2002, and was lower for most income groups. Most people live in poverty and rely on subsistence farming that is highly dependent on rainfall that is often erratic and unpredictable. As a result, there is overexploitation of the natural resources to meet their daily needs. The economy of Mozambique is based on agricultural production, sea and mineral resources. Agriculture is a key sector for economic growth and poverty reduction giving work to more than 70% of the workforce, and being the main activity for 95% of the people living in rural areas. 2. Mozambique is well-endowed with natural resources. Increased but appropriate exploitation of natural resources will be a key factor in whether Mozambique attains the Millennium Development Goals. This will have to be done however with minimal long-term environmental impact. Mega-projects have contributed up to 25% of economic growth over the last years. Expected changes in climate change, and how these may affect mega-projects, are already taken into account in the design, and economic evaluation of the large dam projects. 3. Environmental awareness is increasing in Mozambique, although it is recognised that the level of environmental awareness is still low at provincial and sub-district level. Although Mozambique’s environmental legislation is comprehensive, enforcement and implementation of its policies remains weak largely because of weak capacity of government institutions (both in terms of number of staff but also in terms of their qualifications and expertise/experiences). Overall there is also a need for better integration and coordination amongst government agencies. Most government institutions are under equipped in terms of human capacity and financial resources. The obvious solution, would be to increase training programmes and, if means allow, to recruit more and better trained staff. Some important tasks can also be commissioned to “external” or private agents. This strategy is actually already being used in the processes of territorial planning, where the regulation on district land-use planning implies that the territorial planning has to be done by licensed consultancy companies or consultants. 4. As most developing countries in Africa, Mozambique has evolved substantially over the past decade with introduction of legal requirements or general procedures for Environmental Impact Assessment (EIA). Compared to Tanzania and Kenya, Mozambique has the oldest legislation (Decree 76/98 of 29 December) and Tanzania has the most recent legislation (The Environmental Management Act, 2004 and EIA regulations at the end of 2005). In Kenya, the legal requirements of EIA appeared first in the Environmental Management and Coordination Act (EMCA) of 1999 and then in the Environmental (Impact Assessment and Audit) Regulations of 2002. All projects listed in the Appendix of Decree no. 76/98 are subject to an EIA study. All activities not covered by the Appendix and capable of causing a significant environmental impact will be subject to a pre-assessment by the Ministry for Environmental Coordination (MICOA). When the pre- assessment indicates that an activity’s environmental impact is already known, MICOA will issue the respective environmental license. 5. The legal framework, ie laws, regulations and policies are all adequate and generally comprehensive enough for dealing with the environmental issues at stake. However, the area that is still not well developed is cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w54 Environmental Audit Committee: Evidence

climate change. It is however a theme that is gaining interest at policy level. The Government of Mozambique faces however great difficulties when it comes to implementing policies and enforcing laws. 6. Increased occurrence of droughts, floods and cyclones as a consequence of climate change pose a direct and immediate threat to the development of Mozambique. Currently, there is no overall strategic vision on how to deal with these changes nor is there an adequate legal or institutional framework for coping with these challenges. So far two institutions that have been most active in relation to climate changes issues. These are the Ministry for Environmental Coordination (MICOA) and the National Institute for Disaster Management (INGC). There is however need for clarifying institutional responsibilities as there are a number of complex donor funded projects related to climate change. The World Bank has estimated that in the case of no policy changes the impact of climate change on GDP would range, depending on the climate change scenarios, between 3.5% and 13.6% of the GDP. 7. Mozambique, with a coastline of about 2,700 km and more than 60% of its population living in coastal areas, has a high vulnerability to tropical cyclones and sea level rise. Mozambique is one of the sub-Saharan countries that would be most affected by a sea level rise of 4 to 5m. Several areas of the country will be affected by future sea level rises. The port of Nacala, in the north, might need more coastal defences to protect against extreme sea levels and the likely increase in intensity of the most intense tropical cyclones. The city of Beira, in the centre, is under threat from extreme sea level events. An analysis of the hydrology and river basin has concluded that Mozambique and surrounding countries will be facing several significant challenges. These include increased risk of drought and increased frequency of crop failure during the growing season from October to December in the area centred over Zimbabwe and covering parts of Zambia and central Mozambique. This will have a very severe impact on Mozambican food security, as around 80% of the population is dependent on subsistence agriculture. The watershed in central Mozambique could see increases in magnitude and frequency of flooding. Increasing populations will exert more water demand, and current per capita water usage rates would not be able to be sustained in most basins in southern Mozambique. Such situations could lead to conflicts related to water access and to the displacement of many communities, creating “climate refugees”. 8. DFID Mozambique’s approach is to support Mozambique’s ambition to complete its transformation from a poor, post-conflict nation to a thriving, regional trade and investment gateway which is independent of aid by 2025. As mentioned in country’s BAR offer, with this approach DFID also intends to help ensure that a country which has been the fastest-growing non-oil economy in SSA in the last 15 years, develops in a way which allows all Mozambicans, particularly girls, women and the poorest, to benefit from the potential that the country has, which includes abundant natural resources (minerals, gas, coal and now oil), 30 million hectares of unused arable land, and a strategic location which could link four landlocked countries to global shipping routes. DFID priorities will be Wealth creation and governance, as well as continued emphasis on the social sectors. Wealth creation and Governance are the two areas upon which the success of the programme most depends. Without accelerated job creation and agricultural productivity, stability will be threatened. Without progress in tackling corruption and strengthening accountability, future gains will be jeopardised. The plan therefore prioritises funding in these areas. It manages the risk of resource curse from expected oil and gas discoveries, specifically, by making future growth and poverty reduction grants conditional on hard-edged policy reforms to improve transparency. Progress in these areas will make investment in social sectors and climate change mitigation affordable, progress in these areas sustainable and graduation from aid a realistic target. 9. DFID’s contribution to Mozambique has been notable through its ability to interact with government and other major donors to bring about greater harmonisation. DFID has been also of a flexibility that has allowed DFID greater influence through strategic interventions and technical assistance. 10. DFID Mozambique has not yet undergone a Strategic Climate Programme Review. It is intended that one will be carried out within the next year. 11. Until 2010, all projects over £1.0 million had to carry out and ESN. It included also projects of less than £1.0 million, that were of a sensitive nature. In this case an ESN would be carried out (example: With the ESN DFID intended to identify what would be the main environmental impact of the project and what measures could be taken to avoid to jeopardise the environment, making also our interventions environmental friendly). From 2011 all interventions will be assessed for their relevance to climate change and the environment, to comply with corporate obligations, and make development climate and environment smart. 12. We have providing a list of projects funded by multilateral donors in Mozambique. We are happy to provide any additional information on specific projects: cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w55 The environmental screening notes for the respective projects An initial ESN was prepared, see Quest docs 69894 No ESN was completed Who is implementing the projects Roads Fund at the Ministry of Public Works and Housing (MOPH) INGC—the National Institute for Disasters Management must be submitted that is prepared to the Ministry of Impact Assessment) Environment Any requirements placed upon/ standards required of the government of Moz.or other aid recipient agencies In General, Moz. has general procedures for EIA. According to the procedures, any EIA (Environmental (MICOA). They are responsible to review the EIA and approve. N/A A breakdown of the project’s funding (£) 19,700,000.00 500,000 Environment’s Ministry of supervision for implemented under compliance. Whether these environmental impacts were deliberate or unplanned In case these impacts occur, they are identified and an environmental action plan is prepared and To minimise this impacts, before people’s resettlement, INGC works with a multidisciplinary team includ ing the Ministry of Environment to plan for the resettlement area location, and provisions to be taken. they must be submitted to if an EIA is needed, then the Ministry of Environment local lesgislation. However (MICOA). Possible env. The project’s environmental impact Project main activities are rehabilitation and maintenance of rural roads. Due to the limitedthe nature work of involved, annot EIA required is according to the Impacts could include: dust, noise, people’s and animals’ displacement, disturbing natural and sensitive ecosystems such as forestry, protected areas, river courses to extract sand. This was an emergency project intended to save peoples’ lives from the flooded to safer areas. Expected env. Impacts included: planning, soil clearance, bush fire, pressure on diverse natural resources (eg land, fishery, forestry, etc) delivering improved rural accessibility so that poor enhance their focus on rural communities gain the road institutions to The project’s rationale and objectives access to markets and To improve rural accessibility and poverty. The project focus onroad the sector through support to the government of Mozambique specifically to services. The project started as a £4.8m project which was increased to 19.7 million. See QUEST Doc 1240021 for more details) Emergency funds to Support the National Institute for Disaster Management in its coordination role for emergency response, disaster preparedness and in mitigating the effects of severe floods in theValley, Central Zambezi Mozambique, mostly in the districtsMutarara, of Tambara, Caia, Mopeia, Morrumbala, Sena, Chemba, and Marromeu. See QUEST Doc 3933832 for more details (104001) technical support sector programme Sector budget support to national integrated road programme (113468) & Integrated road UK/Moz support to the national institure for mitigation of the effects of severe floods in central Mozambique— Grant 2010 (200992) cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w56 Environmental Audit Committee: Evidence prepared. See Quest Doc 2126004 Total fund less < £500K therefore no ESN completed The environmental screening notes for the respective projects An ESN was Children Ministry of Energy (ME) Who is implementing the projects Save the N/A Any requirements placed upon/ standards required of the government of Moz.or other aid recipient agencies N/A 450,000.00 A breakdown of the project’s funding (£) 1,235,000.00 Whether these environmental impacts were deliberate or unplanned Unplanned impacts positive as farmers adopt better practices. The main issues are those ofthe risk Zambezi as is pronecatastrophic to flooding and is also predicted to dramatically reduce its flow as global warming driesmajor out parts of the catchment. Sensitivity of the issue,environmental main issues identified: use of water,use land issues, conflicts betweens food production vs biofuels production. The project’s environmental impact The expected impacts onenvironment the are small but resilience of communities along the Zambezi valleythe to impact of flooding disasters. Around 26,620 people in the districtsMopeia, of Morrumbala, Caia and Tambara will benefit from the project, assuring that they develop resilient livelihoods and minimise their exposure to risks,also and allowing them develop flood plain management strategies based on operational research. See QUEST Doc 1889948 for more details The aim of the project is to lead to the developmentBiofuels of sector in Mozambique. See QUEST Doc 1756201 for more details prone areas of thevalley Zambezi to develop resilient livelihood options. The main goal is to enhance the support the Government of Mozambique to implement its biofuels strategy, that will The project’s rationale and objectives Enable communities living in four districts in the flood- Biofuels technical Floodplain management [Zambezi] (200273) support to Ministry of Energy (200340) AG Save the Children: cobber Pack: U PL: CWE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Environmental Audit Committee: Evidence Ev w57 Total fund less < £500K therefore no ESN completed Total fund less < £500K therefore no ESN completed The environmental screening notes for the respective projects TROCAIRE War on Want Roads Fund at the Ministry of Public Works and Housing Who is implementing the projects N/A N/A N/A Any requirements placed upon/ standards required of the government of Moz.or other aid recipient agencies 234,709.00 Component of project 113,468 485,567.00 A breakdown of the project’s funding (£) Whether these environmental impacts were deliberate or unplanned The project’s environmental impact Mozambique through strengthening the existing Mozambican small farmer movement (UNAC) to enforce land rights, withspecific a focus on increasing the participation of women in leadership positions inmovement. the See QUEST Doc 2924197 for more details This is a component for food security for 6,000 smallholder farming families in 24 communities inDistricts the of Gorongosa, Gurue, Matola, Namaacha and Mossuril. See QUEST Doc 604652 for moreThis detail project intends to improve livelihoods of poor small farmers in technical support of the Sector budget support to national integrated roads programme, Nr 113468, which intends to provideneeded the technical support to the programme The project’s rationale and objectives To contribute to improved Integrated road security programme (113253) Land rights for small farmers (104093) sector programme technical support (104001) Smallholder food cobber Pack: U PL: CWE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01

Ev w58 Environmental Audit Committee: Evidence The environmental screening notes for the respective projects Yes, an ESN was prepared. See Quest Doc 126469 Who is implementing the projects KPMG Any requirements placed upon/ standards required of the government of Moz.or other aid recipient agencies N/A A breakdown of the project’s funding (£) 2,995,000.00 Whether these environmental impacts were deliberate or unplanned Unplanned impacts The project’s environmental impact Issues identified: Access to land, predominant production form is theand slash burn system withland, fallow increasing pressure on land resources, the allocation of large areas offor forest timber land exploitation, the lack of a transparentto-date and land up- cadastre, systematic alienation of the better-located and more fertile lands, often todetriment the of local users. The project’s rationale and objectives local communities in Gaza, Manica and Cabo Delgado and increase the sustainable management and utilisation of these resources for poverty reduction and economic growth. See QUEST Doc 126464 and 2558660 for more details To enhance the capacitysecure to land tenure and natural resource rights of Community Land Use Fund (103993) 8 February 2011 cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w59

Written evidence submitted by Export Credits Guarantee Department Introduction 1. The Export Credits Guarantee Department (ECGD) is the UK’s export credit agency (ECA). The primary function of ECAs, which exist in all developed countries, is to assist their countries’ exports. 2. ECGD is a Ministerial Department. With staff headcount of 214, it is the smallest such department. It reports to the Secretary of State for Business, Innovation and Skills (BIS). 3. ECGD provides: (i) insurance to UK exporters against non-payment risks on overseas contracts, and guarantees to banks financing those contracts against default risk; and (ii) insurance against political risks to UK firms investing overseas. 4. The largest part of ECGD’s activities is the issue of guarantees for long-term loans to support the sale of capital goods and services by UK exporters. Since the privatisation of its short-term trade credit insurance business in 1991, the main scope of its operations is to support a very small number (relative to all UK exports) of high value contracts. 5. ECGD support enables UK exporters to compete internationally against overseas companies supported by their national ECAs; it thereby preserves UK competitiveness and jobs. ECGD has supported more than £59 billion of exports since 1991, excluding multiplier effects. 6. ECGD operates within a policy framework intended to prevent market distortion and under a financial framework intended to protect the interests of taxpayers, which includes the objective to cover all its costs (claims paid and administration) from its income (premium charged to those receiving its support and recoveries of claims). 7. In 2009–10, the volume of support provided by ECGD for new business was £2.21 billion, a 50% increase over the previous year. This reflected the dislocation to market sources of finance and insurance caused by the 2008–09 economic downturn. For 2010–11, ECGD expects this growth in support to continue. 8. ECGD complies with the relevant international Organisation for Economic Co-operation and Development (OECD) environmental, social and human rights standards. In accordance with OECD requirements, ECGD gives public notice in advance of its decisions on support for a project where its potential environmental and social impacts are material.

2011 Priorities 9. In addition to continuing to meet high levels of demand for support, ECGD’s proposed priorities for 2011 are to: (i) dliver on the new short term products for exporters to be set out in the Trade White Paper; (ii) develop a closer working relationship with UKTI in order to provide more coordinated and effective support to UK exporters; and (iii) press within the OECD for strengthening its agreement (the Common Approaches) that regulates the assessment and acceptability for ECAs of environmental and social impacts for all business that is not civil aircraft or in the defence sector.

Annex 1 Background Legal Powers 1. ECGD conducts its functions on behalf of the Secretary of State under powers derived from the Export and Investment Guarantees Act, 1991, as amended by the Industry and Exports (Financial Support) Act 2009, (the 1991 Act).

Treasury Consent 2. ECGD’s powers under its 1991 Act may be exercised only with the consent of HMT. This is documented in a formal standing consent that sets requirements for ECGD’s financial objectives, risk and pricing policies, product range and reporting.

Statement of Mission and Principles 3. ECGD’s Statement of Mission and Principles (at Annex 3) was issued in April 2010 (and came into effect on 1 May 2010) following a Public Consultation. It replaced a previous Mission Statement and Statement of Business Principles, which had been in place since 2000. cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w60 Environmental Audit Committee: Evidence

Corporate Governance Accounting Officer and Management Board 4. The Chief Executive of ECGD is the Accounting Officer and is responsible to Ministers and Parliament for the management of ECGD. 5. In discharging his responsibilities, the Chief Executive is advised and supported by a Management Board, led by a non-executive Chair (Guy Beringer, since January 2010, formerly Senior Partner of Allen & Overy). Its members comprise five independent non-executive directors (all from the private sector) and five executive directors (of whom four have private sector backgrounds).

Export Guarantees Advisory Council 6. The 1991 Act established the Export Guarantees Advisory Council (EGAC) to provide advice at the request of the Secretary of State on any matter relating to the exercise of his/her functions under the Act. 7. EGAC focuses its attention on ECGD’s decision-making relating to its Mission and Principles. It only reviews transactions after support decisions have been taken. EGAC members are appointed by Ministers and are unpaid. They are selected for their expertise in corporate social responsibility issues, sustainable development and trade. Its Chair is Andrew Wiseman (Head of Environmental Law, Stephenson Harwood).

Shareholder Executive 8. The Shareholder Executive (ShEx) in BIS provides advice to Ministers on the exercise of their responsibilities for ECGD. ShEx has no executive powers over ECGD’s operations: it monitors and reviews corporate governance and financial performance on behalf of ECGD’s Ministers through ‘shareholder’ review meetings, board/management effectiveness reviews and strategy reviews.

International Regulation of ECAs 9. ECGD conforms to EU and OECD regulations on export credits, including the OECD Arrangement on Export Credits. This is the primary source for regulation of the terms on which ECAs can provide support (including minimum premium rates and maximum repayment periods) and is incorporated into the EU acquis. 10. The OECD Arrangement is underpinned by the WTO Agreement on Subsidies and Countervailing Measures. This requires all ECAs to operate their schemes on a break-even basis over time (although this test is not defined), and not to confer a ‘benefit’. These obligations are reflected in ECGD’s policy remit to complement the market. The UK has traditionally taken the WTO requirements more seriously than other governments. 11. The OECD also sets policies on anti-bribery and corruption procedures, environmental and social impacts, and debt sustainability. These standards are not part of EU law but, as long as it is ECGD’s stated policy to adopt these agreements, adherence to them is a legally enforceable obligation.

ECGD’s Business Activities 12. The largest part of ECGD's activities is the issuing of guarantees for long-term loans to support the sale of capital goods and services by UK exporters. The amount of any guarantee is set in relation to ECGD’s risk appetite for a particular market/obligor and its assessment of the risk of the transaction.

Role in relation to the Private Market 13. Nearly all other advanced countries have a government-supported ECA. UK exporters would complain of being at a competitive disadvantage if the UK did not also have an ECA able to offer insurance and guarantees at premium rates that broadly matched those of other ECAs, or to provide capacity that is not available from private sector sources. 14. Even if the private sector were able to offer at acceptable prices the sort of products provided by government-supported ECAs, the impact of the credit cycle could mean the availability of such products would be unreliable, thereby potentially disrupting world trade at times of economic distress. ECAs therefore provide stability at times of financial market stress, as occurred during the recent economic downturn.

Policy Objectives 15. ECGD has a number of non-statutory policy objectives set by Ministers. These are that ECGD should: (i) Complement, not compete with, the private market. ECGD accordingly responds to demand for its services; it does not seek to create demand in competition with private market providers; (ii) Operate at no net cost to the taxpayer. Over most of its history, ECGD has operated with a surplus; cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w61

(iii) Price to risk. In order to meet its financial objectives, ECGD charges a premium on each transaction to cover its estimate of the risk (“expected loss”), and to make appropriate provisions for its administrative costs and for its exposure to possible “unexpected losses” on its credit risk portfolio as a whole. (Few other ECAs recognise the concept of ‘unexpected losses’, let alone price for it); (iv) Pursue a level playing field internationally among ECAs. Through the UK’s membership of the EU and the OECD, ECGD works to promote the setting and uniform application of sound policies and practices, and the removal of trade-distorting practices by other ECAs. In doing so, ECGD’s aim is that UK-based exporters should compete on the same basis as those from other countries, as far as is consistent with the policies set for it by Ministers; and (v) Take into account the Government’s wider policies on anti-bribery and corruption, debt sustainability, and environmental and social standards in the exercise of its primary purpose.

Annex 2 Key Policy Issues Public Finances 1. ECGD expects to contribute to the Government’s growth agenda through the delivery of a number of possible new products to support UK exporters. Announcement of new initiatives is expected through the forthcoming Trade White paper.

ECGD’s Role What role does ECGD play in supporting exporters? 2. ECGD supports roughly 0.5% of total UK exports of goods and services. Of all G7 ECAs, ECGD provides the lowest amount of support in relative terms (share of national exports) and in absolute terms (volume of support provided and number of exporters supported). However, through its guarantee and insurance policies ECGD helps to support jobs in primary exporters (eg Airbus) and in companies, including SMEs, within primary exporter supply chains.

Why is that role so small? 3. ECGD’s limited role reflects: (i) its remit: to complement and not compete with the market; (ii) its financial objectives and its aim to avoid a net loss for the taxpayer; (iii) its exit from the provision of whole turnover short-term export trade credit insurance following the 1991 privatisation of those activities; (iv) the nature of the demand put to ECGD for support, which reflects UK manufacturing industry’s focus on low risk countries, with around 75% of UK exports going to OECD countries; and (v) its role in supporting capital goods and services, and the absence in the UK of strong export capacity in such sectors as large civil ships, nuclear power, fossil fuel power generation, or high-speed rail. 4. The French and German ECAs support 1.5% of national exports. Even if ECGD provided as much support as its major EU counterparts, it would continue to be directly relevant to a small minority of UK exporters.

What action did ECGD take to respond to the 2008–09 economic downturn? 5. ECGD: (i) secured an amendment to its 1991 Act to remove an unintended technical obstacle, in order to permit, for instance, support for exports already supplied under a contract that had only partially been completed (an increasingly common feature of ECA business); (ii) reduced its premium rates, after agreement with HMT, to reduce its risk coverage margin; (iii) introduced a short-term Letter of Credit Guarantee Scheme, to run until 31 March 2011, following a Public Consultation. The scheme will be reviewed shortly for the purposes of a decision on whether to extend it for a further period; (iv) supported increased volumes of business, 50% higher at £2.21 billion in 2009–10. The total number of guarantees and policies issued rose to 198 compared to 136 in 2008–09; (v) acting jointly with the French and German ECAs, supported 33% of Airbus sales (whereas historically the three ECAs covered about 17% of Airbus sales). The value of guarantees represented by Airbus deliveries grew to 90% of business underwritten and 83% of number of facilities in 2009–10; (vi) undertook a Public Consultation to revise its Business Principles, resulting in a new Statement of Mission and Principles, which established international competitiveness as a key policy objective and brought ECGD into line with other government departments’ policies on Public Consultations; cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w62 Environmental Audit Committee: Evidence

(vii) undertook a Medium-Term Review of options for the provision of export credit support by the UK with recommendations made to Ministers; (viii) increased its cooperation with UKTI; (ix) made it easier to use ECGD’s guarantee to support a bond issue to investors rather than a bank loan, widening the pool of ECGD-guaranteed financing available to UK exporters. 6. In mid-2010 ECGD undertook a review of the scope for contracting out ECGD functions to the private sector in the context of the Public Bodies Bill. Ministers decided that ECGD should retain its current status. One of the factors Ministers considered was the need for continued high standards of factual and analytical work on credit risk and ethical issues on which ECGD bases its decisions.

What is ECGD doing to support more exporters? 7. ECGD is seeking to raise awareness among key market players, both overseas and in the UK, of the benefits of its support, and to identify specific opportunities where that support might help UK exporters to win acceptable business, working alongside UKTI. 8. Before the financial crisis, requests for ECGD to support civil and defence business outside the aircraft sector were on a declining trend. However the position has now substantially changed, and the range of UK exports (in terms of markets, exporter types and business sectors) supported by ECGD in 2010–11 has grown markedly. So far this financial year ECGD has supported a number of large civil deals including: (i) Rolls Royce’s US$400 million contract with Gazprom to supply a compressor station at Portovaya for the Nordstream pipeline project; (ii) three Carillion and Mivan (Northern Ireland) construction contracts totalling around US$500 million in aggregate for Emaar in Dubai and for Al Futtaim in Egypt (in respect of the Cairo Festival City project); (iii) Astrium Ltd’s supply of€91 million of goods and services to its French parent which has the main (€532 million) contract for the supply of a satellite to SES in Luxembourg; and (iv) the continuing supply by the Football Association, under a three-year, US$330 million contract, of Premier League broadcasting rights to the UAE. 9. This enhanced level of demand seems set to continue. The current business pipeline features a number of significant deals that could be supported by 31 March 2011 or in 2011–12. Sectors include steel, construction, electricity transmission, water treatment and energy, for markets such as Brazil, Uruguay, Egypt and Nigeria. The largest case is a prospective US$1 billion line of credit to Petrobras in Brazil to finance UK supplies for offshore drilling and exploration activity (now undergoing enhanced environmental due diligence in view of the implications of BP’s Macondo oil field spill in the Gulf of Mexico). 10. ECGD is also expecting to be involved to a greater degree in major project financings (previously stalled by the financial crisis), where its support has been, or is likely to be, requested. Such cases can involve substantial values of UK supplies (typically front-end engineering and design) but require substantial due diligence. 11. In the course of 2010–11 ECGD has also supported a number of smaller contracts across a range of sectors and markets, including for SMEs who had not previously come to it for support. 12. In late-2009, ECGD launched a Letter of Credit Guarantee Scheme. Its aim was to boost the availability of short-term export finance for UK exporters. Under the scheme ECGD shares with UK banks the credit risk associated with confirming letters of credit from certain emerging markets, so that these banks will have greater capacity to support exporters to these countries.

Should ECGD do more to support SMEs? 13. As a matter of government policy since 1991, ECGD’s focus has been capital and semi-capital goods exports. Through the provision of that support, however, ECGD indirectly supports many SMEs in supply chains. 14. Support for exporters of consumer durables and light manufactures, normally sold on cash and short terms of credit, is provided by private credit insurers. State-backed credit insurance is normally banned by EU State Aid rules for exports to the EU and rich OECD markets for short-term business. Although the European Commission waived this ban due to the economic downturn, and has since extended its waiver on the ban for a further year to the end of 2011, those EU ECAs that introduced schemes either withdrew them or modified them so as to be available for fewer markets, as from 31 December 2010. 15. From time to time ECGD has directly supported small exporters. It operates an export finance scheme through Sovereign Star Trade Finance, which offers streamlined ECGD support for small and medium-sized export transactions. cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w63

What is ECGD doing to improve the effectiveness of its support for exporters? 16. ECGD is working with UKTI to develop a more coordinated service to exporters. This includes improving the understanding in each organisation of the services that the other organisation can provide to exporters, and making customers of each organisation aware of the services the other can provide. ECGD’s customers will also benefit from the improved access that ECGD will have to UKTI’s regional and international network.

What concerns and criticisms do exporters express about ECGD compared to other ECAs? 17. Exporters have complained that: (i) ECGD has a narrower product range than other ECAs. In effect, exporters argue that HMG policy has resulted in ECGD playing too narrow a role, and that HMG’s policy of avoiding competition with the private market has impaired ECGD’s ability to complement the market. In particular, exporters have criticised the absence of: (a) whole-turnover short-term export credit insurance support, given constraints in private market capacity which first arose in the autumn of 2008 (and, unlike other ECAs, that ECGD did not make use of temporary flexibilities introduced by the European Commission); and (b) support against the fair calling of bonds issued in favour of overseas buyers by banks in support of exporters’ performance obligations. ECGD expects to launch a product to address this need shortly; (ii) ECGD’s risk standards can be higher than those of other ECAs, so that it may impose stricter terms than other ECAs or, occasionally, refuse to support a transaction which another ECA would support; (iii) ECGD is subject to public law and to Freedom of Information legislation, like any other government department but unlike many other ECAs. Some exporters have complained that ECGD is less easy to work with than other ECAs, with slower internal processes and a greater concern about legal risks (for example, statutory compliance and exposure to judicial review); and (iv) exporters were disadvantaged by the requirement to comply with ECGD’s unilateral standards, where they have exceeded the requirements set out in the relevant international (OECD) agreements, especially on environmental and social impact assessments. The response to the Public Consultation on ECGD’s Business Principles set out a policy presumption that ECGD will always apply international standards in future and not unilaterally place new and additional requirements on UK exporters. In the negotiations in the OECD in 2011 on the Common Approaches (which sets the relevant standards for ECAs) ECGD will press for the removal of ambiguities in the text, which can be exploited by other ECAs to justify lower standards.

Climate Change and Sustainable Development How much support does ECGD provide for fossil fuel power stations? 18. While ECGD regularly provides support for UK process contractors in the oil and gas process and transportation sectors, it only does so occasionally for gas-fired power stations. ECGD has not supported a coal-fired power plant since 2002.

Could ECGD do more to support exports in the renewable energy sector? 19. Experience to date is that demand from the sector for ECGD support is low. ECGD has made firms aware of its products through bilateral contacts and attendance at relevant trade seminars and conferences. ECGD has also maintained contact with the various trades associations such as RenewableUK (previously the British Wind Energy Association), the British Hydropower Association and the Renewable Energy Association. 20. In the tidal and wave energy sector, most of the companies have yet to reach commercial stage on their developments, with the exception of Pelamis Wave Power and Marine Current Turbines, who have both advised ECGD that they have no current need for its support. 21. ECGD has worked closely with DECC to put forward the UK’s position in OECD negotiations on enhanced export credit terms for renewable energy and climate change mitigation technologies. The UK has taken the position that there should be minimum requirements to justify a coal plant’s entitlement to preferential finance. In particular, the UK has wished to see carbon capture and storage (CCS) readiness as a minimum requirement (which makes it much cheaper to retrofit a plant with CCS when it becomes commercially viable).

Annex 3 Mission and Principles Who ECGD is The Export Credits Guarantee Department is the export credit agency of the United Kingdom and is a Government Department that operates under an Act of Parliament. cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w64 Environmental Audit Committee: Evidence

What ECGD does ECGD complements the private market by providing assistance to exporters and investors, principally in the form of insurance and guarantees to banks.

How ECGD operates ECGD is governed by its statute pursuant to which certain financial objectives are set by HM Treasury. It is ECGD’s policy to comply with all International Agreements which apply to the operations of Export Credit Agencies.

The principles ECGD applies On individual cases, ECGD aims to: — provide a quality of service that is proactive, flexible and efficient, with a focus on solution and innovation; — take account of factors beyond the purely financial, and of relevant government policies, in respect of environmental, social and humans rights impacts; debt sustainability; and bribery and corruption; and — publish, for the benefit of applicants, guidance on processes and factors taken into account by it in considering applications. Generally, ECGD aims to: — disseminate information about its products and services; — achieve fairer competition by seeking to establish a level playing field internationally, through obtaining multilateral improvements in export credit policies and practices; — recover the maximum amount of debt in respect of claims paid taking account of the Government’s policy on debt forgiveness; — abide by such codes of practice and guidelines on consultation as may be published by the Government from time to time; and — employ good management practice to recruit, develop and retain the people needed to achieve ECGD’s business goals and objectives. 27 January 2011

Written evidence submitted by Richard Whittell, independent researcher — “Agriculture controlled by the agribusiness corporations, the squeezing of rural resources to subsidise industry, massive displacement and pauperization by industrial/pro-rich infrastructural projects are the main reasons for “poverty and backwardness”. The DFID, along with other “aid” agencies actively promotes this model of “development”, which might be more accurately called a model of expropriation, or—more simply—theft. The DFID is part of the problem and it is outrageous hypocrisy for it to pretend to be part of the solution. They tie you up and burgle your house through the back door and then arrive at the front door with much fanfare to provide a few sops as “relief”! … industrial capitalism has proved to be ecologically unsustainable, and a cancer that is consuming the planet. Why should we have any more of it?”48 1. This submission is based on the “Dodgy Development” series of films and transcribed interviews, by myself and Eshwarappa M, a photographer and film-maker from Bangalore, Karnataka, recently published by Corporate Watch as a book and DVD (see here). 2. Between 2008 and 2010 we travelled independently across India to DFID focus states Madhya Pradesh, Orissa, West Bengal and Andhra Pradesh, as well as Karnataka and Delhi. We interviewed more than 200 people affected by a range of DFID-supported projects and programmes. We spoke to people whose views had not been sought or considered by the DFID. Speaking to farmers, low income workers, parents, children, teachers, engineers, academics, campaigners and journalists, it soon became clear that there was a significant number of people whose experiences of British aid contrasted sharply with the DFID’s publicity and reports. Serious questions were raised regarding the DFID’s attitude and accountability to those people it claimed to be supporting and the detrimental effects of its policies and projects on people’s public services, their lands, natural resources and the environment, and their national and state governance. 3. I would urge the Committee to read the interviews and watch the films, a selection of which are attached as annexes here, and request oral submissions from the people in them. Their direct contributions would give a context, depth, analysis and, crucially, personal experience of the issues addressed that is beyond me or other British researchers, development experts or NGOs. 48 Madhuri Krishnaswammy, a member of the Jagrit Adivasi Dalit Sangathan (JADS), a Dalit and Adivasi community organisation based in rural Madhya Pradesh. cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w65

4. This memorandum gives examples from the research mainly concerning the first two focus areas of the committee: whether UK aid avoids exacerbating environmental degradation and worsening climate change and how well the aid programme manages the tensions between boosting economic growth and environmental protection. To do this, the submission will look at the DFID’s contribution to governance reform and the expansion of industry in Orissa, its impact on public sector reform, and finally its programmes encouraging sustainable livelihoods.

Governance Reform: Orissa

(please refer to the interviews in Annex 1 and the “Let them come” film on the DVD)

5. Two of the DFID’s stated priorities in India are “strengthening the capacity of government to develop and implement pro-poor policies; and strengthening the accountability of government to those it represents” and, “promoting sustainable management of the earth’s resources.” It goes on to add, “Environmental issues are always taken into consideration during the design and implementation of our programmes and projects”.49

6. It has had most influence in the north-eastern state of Orissa, one of the poorest in the country. In 2000 the DFID, with the World Bank, came to Orissa and signed an aide memoire with the Government of Orissa. The document explained: “The purpose of the mission was to resume discussions with the Government of Orissa about a potential adjustment loan from the World Bank, with possible DFID co-financing, in support of a programme of fiscal adjustment and major structural reform in Orissa … The main conclusion of the mission is that the severe fiscal crisis facing the Government of Orissa provides an opportunity to undertake a programme to reform the business and direction of government.”50

7. One of the first reforms to come from this was the Industrial Policy Resolution, which the DFID co-wrote with the Government of Orissa and UNIDO in 2001. The DFID’s review of the industrial policy in 2008 notes that: “Orissa’s share of India’s total investment has increased from 4.3% in March 2003 to nearly 11% at the end of 2007. The total value of all investments is estimated at £75 billion. Most of these investments are in mineral based industries such as aluminium, steel and associated captive power generation” and goes on to note that, “the project has been instrumental in strengthening the Government of Orissa’s (GoO) capacity to facilitate large scale private sector investment.”

8. The vast majority of this investment has come from multinational mining companies. This has provoked resistance throughout the state, especially from people who would be displaced from the lands to make way for the companies. In the “Let them come” film people describe why they will not leave their lands. Abhay Sahoo, secretary of the campaign to stop the South Korean companies taking the lands of 4,000 families (which has recently been heavily criticised by a investigative panel of the Environment Ministry), explains the environmental consequences of POSCO’s entrance:

9. “You see, we are not against industrialisation but industrialisation at the cost of a guaranteed agricultural economy. This area is a coastal area with very sweet sand, underground sweet water and it is full of sand dunes. The coast of the Bay of Bengal has a very special kind of sandy soil. People have been growing betel vine there which happens to be a most profitable item of agriculture and is an employment generating agriculture. It gives a very handsome income to the cultivator’s family, and provides both direct and indirect employment. So people do not want to part with the betel vine cultivation. In addition, it is producing foreign currency for the state exchequer as it is an item of export. Apart from betel vine, people have cashew nuts which are also profitable items and apart from everything else, people have a very dense forest and a very beautiful ecology. So the people of the area have been struggling tooth and nail and heart to safeguard their motherland and fertile soil. It will be a very serious ecological catastrophe.”

10. Similar views are held throughout the state and the DFID’s role in the reforms—which have significantly reduced the state’s role as a welfare provider—provoked widespread protest from the people of the state. Journalist Sudhir Pattnaik explains: “We call Orissa a DfID colony. This is not acceptable to anybody who has a sense of democracy. We do not accept a foreign government department coming here and dictating and influencing government departments to do this and to do that. And if you come to the core point, what is their understanding of development in Orissa? If you see the kind of development happening in Orissa, it means developing only industries, mineral-based industries. How many people in the state will benefit from this?”

It is also noted that the companies will pay very little tax, as many of them are to operate in tax-free “Special Economic Zones”, and will not provide employment for all the people they are to displace. 49 Department for International Development, DFID in India: Factsheet, [no date]. 50 From the Aide Memoire of the World Bank and the DFID’s Technical Economic Mission to Orissa, 8–13 May 2000. cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w66 Environmental Audit Committee: Evidence

11. Dr Abani Baral, a Head Teacher, who was involved in a popular campaign against the DFID’s reforms, describes how: “the so-called structural adjustment programme massacred the existing public system in the poor state of Orissa … The World Bank and the DFID said they were coming to assist the development of Orissa. They did not say they were coming to paralyse the entire administrative structure … The DFID is not helping the poor people in Orissa.” 12. While the review of the policy states concern for the environmental consequences and says: “there are growing efforts towards strong and effective environmental regulation to manage the potential impacts of a large number of mineral based industries coming up in the State,” the most effective check on the “potential impacts” so far have been the resistance of people living on the land, who are directly opposing policies encouraged and funded by British aid. While the environment is referenced in many of the DFID’s projects in Orissa, and there has been some support for more environmentally friendly activities such as fisheries, had the reforms it helped design and fund been implemented as planned, the state’s carbon emissions would be vastly increased and the environment and ecology degraded.

Public Sector Reform (please refer to the interviews in Annex 2 and the “Power for the People” and “A DFID Education” film on the accompanying DVD) 13. Throughout the areas in which it works people argued to us that the DFID has tried, wherever possible, to introduce commercial market principles into public services through its reforms. With the Government of India having chosen to prioritise the demands of large scale businesses and corporations in its development agenda, this has often been to the detriment of pro-poor development and environmental sustainability. 14. In the power sector for example, which the DFID argues is “the starting point for change” to make governments more pro-poor and environmentally sustainable, its reforms were described by the then secretary of the Madhya Pradesh Engineers’ and Employees’ union as: “based on cutting the cost of the supply, not the needs of the people …When a commodity is charged on the basis of cost of supply, the electricity is supplied in bulk to the big consumers such as the industrial sector. For any product the cost of bulk supply is much less than the cost of retail supply. In Madhya Pradesh, the geographical spread is high and farmers are scattered throughout the state. Low tension lines feed the farmer. On the low tension lines the technical losses are high. So it follows the law of physics: the law of physics says that as the low tension line length increases the technical losses will be higher. This resultantly implies that the farmers and the domestic consumers will have to be charged higher rates. This was a precondition of the reforms that were brought in, that were supported and advocated by the consultants engaged by agencies such as the DFID. 15. In the accompanying film, people living in slums and rural areas describe how the prices they have to pay for electricity have risen astronomically and they have been disconnected when they have not been able to pay. 16. Describing the education programmes supported by the DFID, Dr Nirnajan Aradhya says: “what we need to create is not just a skilled person for the market economy. These larger questions are not even being talked about and the [DFID funded programme] is not at all a solution to them. It is in fact a multi-layered, fragmented programme with no vision. It is not a programme for building a national system of education. It’s not conceived on the principles of social justice and equity.” 17. Professor Anil Sadgopal asks, after critiquing the programmes supported by the DFID: “why is [the DFID] supporting an inferior quality education programme? … Why is it not telling our government, go back to your constitution and follow it? Because the DFID is part of the global market system. Its objective is not education. Its objective is to develop the global market.”

Participationand Empowerment (please refer to the interviews in Annex 3 and the “Smile for the Camera” and “False Promises” films on the accompanying DVD) 17. The DFID describes its livelihood projects in India as “promoting sustainable livelihoods for poor rural people, and encouraging the rehabilitation of environmentally degraded land with the active participation of local people, particularly those normally excluded”.51 An example of this is the Madhya Pradesh Rural Livelihoods Project (MPRLP). We visited areas affected by the project’s encouragement of the jatropha biodiesel, cultivation of which a DFID funded study argued would “progressively generate skills and also lead to a variety of environmental benefits.”52 51 Department for International Development, DFID in India: Factsheet, [no date]. 52 Vision Document on Biofuels for Madhya Pradesh, Department for International Development India, Technical Cooperation Project Support Unit for the Madhya Pradesh Rural Livelihoods Project Phase 2 (2008) cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w67

18. However, such claims were disputed by people with experience of the project, as can be seen in the “Smile for the Camera” film. In addition, Bijay Pandey, the Secretary of the Adivasi Mukti Sangathan, a people’s organisation working in Western Madhya Pradesh for the rights of Adivasis explains: “the food question [in Madhya Pradesh] is very serious, and that is precisely why people are migrating, and the whole of western Madhya Pradesh, the Adivasi areas, are malnourished .. And now, [laughing], the government is promoting jatropha in what they call the wasteland. Initially, they said this jatropha will be cultivated in the wasteland. Now, one must understand the concept of the wasteland: poor people generally depend on some sort of cultivation on this wasteland, so when it is taken away, for this kind of cultivation, you can understand what the food situation will be.”

19. The jatropha cultivation is only part of the project but perhaps more concerning is that the majority of people we spoke to said they had not been consulted by the project, as can be seen in the accompanying film, “Smile for the Camera”.

20. Bijay Pandey continues: “If you ask people in the project they will tell you they are doing whatever the gram sabha [the village council of all the people over the age of 18] suggests … They say whatever the gram sabha says they follow, but they are saying wrong things. It is never done: they in fact ask people to take it, they persuade people. They have employed some people and taken the help of NGOs [non-governmental organisations], who are involved in this persuading and popularising. They identify the sarpanch [the village “headman”] and they persuade him … Through their [the DFID’s] funding they will create a disparity: only some people will benefit from it. You will find that the people they are working with will grow at the cost of other people in the village.”

21. Such working practices clearly do not encourage “sustainable management of the earth’s resources” certainly not in any “pro-poor” sense and are a feature of the DFID’s projects. Madhuri Krishnaswammy, a member of the Jagrit Adivasi Dalit Sangathan (JADS), a Dalit and Adivasi community organisation based in Madhya Pradesh, raises such concerns from personal experience: “It’s a mystery to us how the DFID helps people “realize their rights more effectively in a sustained manner”. Every time the people try to realize their rights and protect their livelihood there is a police crackdown. DFID projects like the Madhya Pradesh Rural Livelihoods Project don’t even scratch the surface of poverty. They don’t address any real need and don’t aim at any fundamental change. All they do is throw some money about, most of which is grabbed by project staff and local elites which further fuels a deeply entrenched nexus of corruption and violence. At the very best, they give a few individuals a little support and send everyone else in the community scrambling and quarrelling for the crumbs. Our members are in constant conflict with the project because there is no transparency or accountability in the implementation. Where there is no conflict, it is because the project is considered irrelevant to people’s lives.”

Conclusion

22. I have put specific questions to the DFID regarding these issues. Their replies are attached in Appendix 4. Unfortunately, their replies do little other than re-state already existing material on their website and in their policy documents. The interviews and films that have been published on the internet have been sent to them for comment but, at the time of writing, no reply has been received. As far as I know, they have made no attempt to contact any of the interviewees in the films or interviews.

23. There is little in the proposals of the Coalition Government to suggest there will be any substantive change in this approach, and the promise to, “make British international development policy more focused on boosting economic growth and wealth creation”, suggests there will be a more explicit focus on private sector led development. Under the present Government, with the reforms that it has already been introduced in the UK, I have little hope that the DFID will act in the interests of environmental sustainability over its term in office. Any positive outcomes that can be claimed from investment the DFID has made in adaptation technology or vaccination programmes are undermined by the consistent disregard it has shown for the views and agency of the people it claims to be supporting. In the case of India, the majority of people we spoke to agreed with the opinion quoted in the summary, that “the DFID is part of the problem and it is outrageous hypocrisy for it to pretend to be part of the solution”, and as such demanded it quit India immediately.

24. The best recommendation I can put forward to the Committee is to contact the people from the interviews and films and request that they give oral submissions. If the Committee is serious about assessing the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation, it would do well to speak to people that have been directly affected by it. 28 January 2011 cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w68 Environmental Audit Committee: Evidence

Written evidence submitted by the Agricultural Biotechnology Council (abc) The following submission provides an overview of the role of agricultural innovations in helping to mitigate carbon emissions and other environmental impacts brought about by agricultural production, with a particular focus on the developing world. It is being submitted to help inform the committee’s inquiry into the impact of UK overseas aid on environmental protection and climate change adaptation and mitigation. abc is the umbrella organisation for the agricultural biotechnology industry in the UK. The companies involved are BASF, Bayer CropScience, Dow AgroSciences, Monsanto, Pioneer (DuPont) and Syngenta. Our goal is to provide factual information and education about the agricultural use of GM technology in the UK, based on respect for public interest, opinions, and concerns.

Definition and Current Usage 1. This submission will focus on the use of genetically modified crop technology as one of a range of complementary range of tools for farmers to both increase their productivity whilst reducing their impact on the environment. Other innovations that complement GM technology include the use of modern farming techniques, crop protection products and decisions about what crops to grow and where they should be used. 2. The UK Government, through the Department for International Development, is heavily involved in supporting agricultural projects in the developing world. It should be noted that abc member companies are not currently directly involved with specific DFID schemes, however member companies are partners in a number of initiatives for resource poor farmers for example in collaboration with the Bill and Melinda Gates Foundation and other NGO’s. 3. GM crops are used extensively throughout the developed and developing world. In 2009, over 14million farmers in 25 countries chose to grow GM crops on 134million hectares of their land. This amounts to the equivalent land mass of France, Germany and the UK & Ireland. Over 90% of those using the technology are resource-poor farmers growing food, feed and materials on an area considerably less than 10 hectares in developing countries, where they are keen to maximise the effectiveness of their crops and protect their incomes.

Reducing the Environmental Impact of Agriculture 4. The use of biotechnology can lead the more efficient usage of resources, increasing production from the same amounts of land and reducing the carbon footprint and environmental impact of agriculture. 5. The mitigation of environmental impacts includes: — Reductions in fuel use and CO2 emissions through less tillage. In 2008, current (worldwide) GM cultivation led to global emissions reductions of 15.6 billion kg of CO2, equivalent to 6.9 million fewer cars on the road for one year. — GM crops can improve yield while using water more sustainably. It can help plants cope with water scarcity by reducing water loss and improving drought tolerance. — GM crops can protect soils from erosion and compaction through less ploughing, conserving soil moisture in the process. — Insect damage to crops is decreased with pest resistant crops, significantly reducing he need for spraying. — Getting more out of the same areas of land can reduce pressure on non-cultivated regions which can play a vital role in mitigating climate change.

How agricultural technology is assisting farmers in the developing world 6. Agricultural biotechnology is playing a role in helping farmers to use resources more efficiently. 12 million resource-poor farmers, often small holders in developing world countries utilised GM in 2009—through individual choice. 7. Pest-resistant GM crops in China, South Africa, South America and India are providing stable food and commodity supplies and in the future such adaptable crops will play a crucial role in helping farmers cope with the effects of climate change. 8. By 2025 it is estimated that about 1.8 billion people will be living in regions with absolute water scarcity. Research is under way to develop drought tolerant crops, such as maize, which can maintain and even increase crop yields despite changes in water supply. These varieties could produce 2 million more tonnes of food under moderate drought conditions. 9. Positive and robust regulatory regimes in other parts of the world has allowed public private partnerships to flourish, with local scientists taking the lead on producing tailored crops for specific climatic conditions, boosting yields in places like Uganda. 10. Many NGOs remain very opposed to the use of any biotechnologies, which risks hindering their usage in resource stressed parts of the world. cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w69

11. The major companies involved with GM technologies work with developing world governments to ensure responsible usage and that the areas in question benefit.

How the UK Government could achieve its aid objectives through the use of biotechnology 12. DFID lists its strategic priorities on food as to: — Help countries to design and implement sound national agriculture and food security strategies. — Work closely with multilateral organisations and regional initiatives to help to better coordinate the global response to hunger and malnutrition. 13. DFID has already demonstrated its willingness53 to invest in research into the expanded role that agricultural biotechnology could play in adapting crops to the conditions brought about by climate change in the developing world. Such research will, abc believes, assist in achieving the goals set out above. 14. However, abc believes that the UK Government must go further and include biotechnology as one of a number of solutions within its aid objectives. As stated above, it can help address the problems affecting food security and supply, coping with climate change and mitigate the impact of agriculture on the environment. 15. abc believes that GM, along with a range of other techniques, has the potential to help meet the Millennium Development Goals on reducing poverty whilst at the same time delivering wider policy goals. 16. abc believes that the UK government can support access to modern agricultural technology in developing countries by more actively supporting a science and evidence based regulatory process for such technologies in the EU. The current EU process for regulating agricultural biotechnology is heavily politicised and dysfunctional. it is a poor example to countries who have urgent needs to develop their agricultural systems. The UK government has done much to support sound basic science in the UK, there is a need for clear leadership in this direction in European forums which the UK is well placed to provide. 3 February 2011

Written evidence submitted by LTS International Ltd Executive Summary The amount of information available to make an assessment on the extent to which UK Aid exacerbates environmental degradation and the impacts of and responses to climate change is limited. This is because the latter is a relatively “new” subject of policy and aid discourse and environmental protection has not received a great deal of attention over the past decade (relative to social sectors). DFID is considered a thought leader in development aid which enables it to use UK’s skills in these fields to positively influence international development efforts. The efforts to mainstream environmental protection and climate change into UK Aid programmes are a work in progress: it is important that climate change is seen as a stressor on all aspects of DFID’s work and not only in environment or as a separate sector or issue. It presents a systemic problem that needs a systemic response.

Introduction 1. International Ltd. (LTS) is an international development consulting company, established in 1973 and currently involved in providing advice in the areas of climate change adaptation and mitigation, particularly in Eastern and Southern Africa as well as advice, evaluation and management of environmental (land, water, forest, biodiversity) initiatives. This includes initiatives for a number of UK Government Departments. LTS is an SME in a highly competitive aid/development market dominated by large—often multi-national— companies. LTS is employee owned and as a team are passionate about development and building capacity in developing countries for sustainable growth. Patrick Abbot is Managing Director of LTS. Neither I nor LTS have privileged access to UK Aid evaluations or programme memoranda in which details of project environmental appraisals and environmental impact are available.

Information Whether UK aid avoids exacerbating environmental degradation and worsening climate change; 2. I am not aware of any evaluations on the impact of UK Aid on environmental degradation and climate change unless covered under more comprehensive assessments. However, screening procedures have been (and are being) developed and introduced (such as ORCHID [Opportunities and Risks from Climate Change and Disasters]/CRiSTAL [Community Based Risk Screening Tool—Adaptation and Livelihoods]) to help assess the potential impact of development programmes and to re-orient them to be more sensitive of climate change— particularly in the context of enhancing resilience or capacity for adaptation. 53 See: http://www.bbsrc.ac.uk/news/food-security/2011/110111-pr-developing-countries.aspx cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w70 Environmental Audit Committee: Evidence

3. I do not have privileged access to internal UK Government procedures but every initiative over a certain amount used to require an environmental analysis—I assume this is still the case. Most of DFID’s bilateral work is strategic (supporting policies and institutions) and often in a pooled funding context; as such it is often difficult to attribute downstream impacts to specific DFID initiatives. 4. Over the past 10 years it is safe to say that DFID has prioritised social protection and governance (health, education, governance and financial management) in its spending and one may argue that this has little (direct) impact on climate change or environmental degradation. However what it also means is there have been very few initiatives to actively reduce environmental degradation and mitigate the impacts of climate change on the poor.

How well the Aid programme manages the tensions between boosting economic growth and environmental protection; 5. In many of the countries in which DFID works a healthy (functioning) natural environment is critical to effective long term development because of the importance of water, soil and renewable energy in driving that development. 6. UK Aid has supported nationally-driven country priorities, which are presented in poverty reduction or economic growth strategies. There is nearly always a mention of the environment in these national documents, but, from a legislative perspective, environmental protection legislation is often subsidiary to industrial and agricultural development legislation. Some of the more recent poverty reduction or economic growth strategies explicitly mention climate change—which could be a reflection on its growing political profile internationally and/or due the early impacts of climate change on development priorities in the relevant countries. However, many developing country governments have a range of immediate and pressing priorities, and issues of climate change adaptation, mitigation and low carbon energy need to compete with issues of delivery of basic services (health, clean water, education, human rights). 7. The conventional view has been that a trade off exists between economic growth and environmental protection—however, the development of new technologies and a realisation that “alternative” growth paths that rely less on the unsustainable exploitation of natural resources—have allowed the these conventional approaches to be challenged. But, in most countries, ministries or authorities responsible for environmental protection remain weak and under resourced. I do not have specific statistics on the levels of resourcing. 8. I know of some support to the forestry sectors (eg in Nepal, Cameroon, Indonesia), although broader environmental protection (eg water resources) and environmental regulation is limited. I believe there may be some indirect projects through Environment Agency and Water Aid and ofcourse through funds (such as Darwin Initiative) to broader biodiversity conservation.

The extent to which UK Aid programmes address the environmental causes of poverty, and the extent to which environmental protection and climate change mitigation and adaptation are prioritised in those programmes. This includes whether financing mechanisms under Government influence (Export Credit Guarantee Department support, the Government’s shareholding in banks, investments by the Commonwealth Development Corporation, etc) fully supports environmental protection and climate change action in the developing world 9. I do not have any data from which to form an opinion on the extent to which U.K. Government finance mechanisms support environmental protection and climate change action in the developing world. There are only very few DFID programmes that I am aware of, that address the environmental causes of poverty. The work is focused in the right direction in that it tends to deal with the root causes of problems: effective governance and planning that aims to reduce corruption and enhance the application of national environmental laws. There are specific funds, such as grant funds and direct grants to UK NGOs and research institutions that enable these organisations to provide specific capacity building support to environmental protection and climate change related organisations in developing countries; this project type capacity building is usually most effective when supported in parallel with national—governance, planning and institutional level support. 10. Much of UK support for climate change mitigation and adaptation is channelled through multi-lateral mechanisms (managed by the organisations like the multi-lateral development banks). In this context, the role of the UK needs to be seen in the context of the international response to climate change and it is my opinion the UK plays a positive and leading role in shaping the international development agenda.

The extent to which environmental protection and climate change mitigation and adaptation have been mainstreamed in the Government’s Aid programmes, including how well DfID’s systems take account of DEFRA’s policies on Biodiversity and DECC’s policies on climate change 11. I do not know the extent to which the efforts of the central policy unit in DFID have managed to mainstream climate change into DFIDs Aid programmes. My impression is that this is an ongoing task. I am not aware of environmental protection being mainstreamed into DFID programmes beyond the environmental appraisal at design stage. cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w71

12. That “Climate change” is seen as a separate issue suggests it is not yet mainstreamed into other, ongoing programmes. However, climate change is a multi-faceted problem and it may not necessarily be as simple as to mainstream it into other programmes—it may be that a fundamentally different sort of programme—one that deals with more systemic, transformative issues may be needed as a response. Thinking “outside the box” is something DFID has, traditionally, been good at and may have a comparative advantage compared to fellow development partners. 13. With respect to the issues of DFID and DECC/Defra policies—whilst there are common overlaps between these policies, there are also significant differences which create tensions between them. This is not surprising when one considers their different mandates. DFID has a mission to eliminate poverty, DECC emissions reductions and low carbon energy and DEFRA’s principally domestic (English) mandate. 14. For example, I have not seen where issues of direct and virtual water use by UK consumers of fruit and vegetables raised by Defra has been reflected in UK Aid programmes supporting sustainable agriculture or water policies, except indirectly perhaps through support to fair trade. These are issues that are taken up by UK conservation organisations in a lobby/advocacy capacity. However, issues of water “offsetting”, carbon “offsetting” and biodiversity “offsetting” are issues that require mechanisms that will work between developed and developing countries and DFID could certainly have an important role brokering a mechanism given their comparative advantage in understanding the needs and capacities of developing nations to manage such mechanisms. 15. A related but separate issue (as it pertains to the application on UK policy abroad) refers to the UK (private sector) investments which represent significant investments in developing countries (whether in the agriculture, land use or industry sector). How are the UK policies on green investment for UK companies applied when these companies are investing in developing countries: how ethical is the trade, how sensitive is it to future needs with respect to climate change? “We would be especially interested in what you regard as best practice for managing the environmental impacts of development projects and programs and mainstreaming the environment and climate change within development. We realise that you have worked with DFID before so we would also be interested in any of your observations on DFID’s policy and practice in this area.”

Best practice for managing the environmental impacts of development projects and programs 16. A comprehensive environmental/climate appraisal of the intended initiative during design phase, including potential relations to other initiatives. 17. There are already tools for this that are based on previous research and practice. I am lead to believe this already exists. 18. The climate appraisals should consider both risks and opportunities and ensure that the programme does not increase vulnerability to climate change. 19. Establish effective monitoring frameworks including the use of independent assessments, (3rd party mid- term reviews and ex post evaluations) to monitor impact. I believe that most programmes already have some sort of evaluation process both during and after. 20. One facet of much development is that there is insufficient learning from experiences of the past— including where things go wrong—or could have gone better—and these are where learning can be strongest if the process is handled well enough. One of the reasons may be that the sector specialists type posts no longer exist in the way they once did, so the institutional memory in the department has been degraded. 21. With climate change—and the spectre of a constantly moving baseline—the need for real time learning and real time evaluation becomes even more relevant, if the organisation can “handle” such an approach (ie can adapt on a real time basis). There is considerable expertise in the UK that could be used to advise and support the DFID.

Mainstreaming the environment and climate change within development 22. Climate Change is all pervasive, multi-faceted, and should be included in as many areas as possible—in the short-term it will add an additional stressor on existing social and environmental systems—it will affect education, health, social protection, human rights, agriculture and so on, not only the environment sectors. Appraisals and climate screening mechanisms that exist may help mainstream environment and climate change into existing/pending programmes. But, climate change is not a “sector”: in the longer term it will have systemic impacts and so there is need for us to respond in a systemic way. It may mean different sorts of programmes therefore—that are multi-functional and adaptive. DFID is perhaps one of the few agencies (compared to other bilateral donors) that can manage such flexible mechanisms. 23. There need to be resources for building resilience in the short-term and adaptation in the longer-term. This also means helping people and institutions deal with uncertainty—it is a paradox in that change is happening but that change is unpredictable (particularly in the short term). cobber Pack: U PL: COE1 [E] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Ev w72 Environmental Audit Committee: Evidence

24. If one is determined to mainstream environment into development, then one would consider national and regional priorities that developing states and their regional entities / economic unions have with respect to the environment, support them to understand better their environmental needs and first raise the profile of the environment in national planning, so that the external development support may respond to that greater demand. 25. The other potential way of mainstreaming environment is though market based incentives (such as those being developed for forestry/carbon by DFID/EU) but for other aspects such as water and biodiversity. Support for the development of mechanisms that introduce new finances and incentives into such key environmental sectors may present opportunities.

Observations on DFID’s policy and practice in this area. 26. Observation is that, relative to other donor countries, DFID has been equally rapid to respond to the political agenda of climate change adaptation and mitigation. It has contributed to a range of multi-lateral funds. I am not convinced that these multi-lateral efforts have proven as effective in terms of efficiency and timeliness of delivery compared to bilateral and some regional funding initiatives, but I have no objective evidence to support this: it is merely anecdotal, based on discussions with peers in developing countries.

Recommendations for action Any recommendations for action by the Government or others which the submitter would like the committee to consider for inclusion in its report to the House 27. UK Aid should build on its and UK’s comparative advantage: — thought leadership in development policy; — High quality skills in environmental protection and climate change technologies and techniques; — Established long term relations with a number of countries (eg Commonwealth countries) where a constructive engagement can support “green” growth trajectories and support provided for international lesson learning and experience sharing; and — work with UK financing mechanisms and private sector to ensure investment supports environmental protection and builds resilience to climate change. 28. UK delivers its Aid through a range of mechanisms (bilateral, multi-lateral, through NGOs, through pooled funding mechanisms). I believe there is now a new commission responsible for monitoring aid and it would be useful to undertake an assessment of the different modalities/mechanisms used with respect to climate change and environmental protection so that our precious taxes can be directed in a way that maximises impact. 1 February 2011

Written evidence submitted by Dr David Hall-Matthews, Senior Lecturer in International Development, University of Leeds Summary — DFID’s own programmes appear to have been better designed to include environmental impact considerations since the last EAC report. — The ECGD and UKTI have not yet delivered on the coalition commitment to support investment in—and stimulate demand for—green technology and low-carbon energy generation in developing countries. — This reminds us of the critical point that HMG cannot deliver a strategy for sustainable development, growth and poverty reduction through DFID aid programmes alone. Sustainable development goals need to be mainstreamed through Whitehall, with greater buy-in, in particular, from HM Treasury, FCO, BIS, DECC, DEFRA and MoD. — DFID needs to use its high global standing to promote environmental sustainability goals among its bilateral and, especially, multilateral aid partners. Contributions to multilateral institutions should be linked to satisfactory outcomes of independent and transparent evaluations of the impact of their programmes on climate and local environment. — In particular, DFID should put strong pressure on the World Bank to stop funding new coal- powered power stations. The WB has recently funded several, including a very large one in South Africa. It is both essential and perfectly possible for DFID/HMG to prioritise economic growth and wealth creation in poor countries, while also maintaining a strong commitment to environmental sustainability and climate change adaptation and mitigation. Low growth guarantees ongoing poverty. Climate change is a very direct threat to growth in the poorest countries, which have a comparative advantage in agriculture. Tropical plant sustainability and productivity is very directly affected by climate change. So, too, is human health and cobber Pack: U PL: COE1 [O] Processed: [24-06-2011 15:18] Job: 010972 Unit: PG01 Source: /MILES/PKU/INPUT/010972/010972_w021_kathy_OAE24 HM Treasury.xml

Environmental Audit Committee: Evidence Ev w73

productivity, for example by rises in incidence of non-communicable diseases, such as respiratory conditions, in tropical regions. The solution lies in clean energy generation and green technology. The UK has a comparative advantage in these areas, notably in carbon capture and storage, though further investment in research is needed before such technologies are economically competitive. HMG, at Copenhagen, along with the US, WB and others, called for financial support for clean energy generation in the poorest countries. Until this is delivered, economic logic dictates that poor countries will prefer the cheapest forms of energy, which have the highest carbon emissions. It is time for HMG, and the multilateral aid it supports through DFID, to make good on this promise. In the UK, this requires BIS to encourage UKTI and ECGD actively to stimulate demand. They should see their role as the active promotion of UK-produced green technology, not just trade facilitation. This would be a win-win for both British business and sustainable development. The purpose of the ECGD should be to underwrite economically risky but potential beneficial export industries, rather than supporting those that are already strong. Its long-standing track record of failing to consider the environmental, developmental and political impact of the export products it assists is reprehensible. Given the conclusions of the 2010 WB World Development Report on Development and Climate Change— that the advanced economies should provide $400–600 billion to support climate change mitigation in poor countries—it is very disappointing that the WB itself is currently investing more in high-carbon energy generation than low, and more than ever before. As a major shareholder and highly-respected voice, DFID needs to put strong pressure on the WB to change its strategy on funding for energy generation, including a clear and credible threat to withhold funds if WB fails to reduce the harmful environmental impact of its grants and loans. 9 February 2011

Written evidence submitted by HM Treasury UK Financial Investments (UKFI) was established by the previous Government to manage its shares in financial institutions at arm’s-length from Government and on a commercial basis. UKFI’s overarching objective is to develop and execute an investment strategy for disposing of Government’s investments in an orderly and active way, within the context of protecting and creating value for the taxpayer as shareholder, paying due regard to financial stability and promoting competition. In line with its remit to manage investments commercially and at arm’s length, UKFI’s engagement with investee banks on environmental and other such issues is at a strategic rather than on a day-to-day, issue-by- issue level. In particular, if it proved to be the case that any of the Government’s investee banks’ sustainability policies were significantly out of line with existing regulatory standards and guidelines such that they would have a negative effect on the value of the company and its shares, UKFI would engage with the bank’s senior management or board to protect the value of the Government’s holding. In February 2010 UKFI published a Sustainability Policy. This sets out UKFI’s expectations with respect to the investee companies’ approaches to sustainability, including environmental issues. In particular, UKFI expects investee companies to act ethically and sensibly on sustainability issues; and to set out clearly which ethical and environmental standards it has committed to adhere to and report against, and to explain why it has chosen these principles. UKFI has continued to engage with the investee banks since it and the Treasury gave evidence to the previous Environmental Audit Committee on 9 March 2010, holding discussions with the banks on their sustainability policies and participating in investor events to that effect. 10 February 2011

Printed in the United Kingdom by The Stationery Office Limited 06/2011 010972 19585