Select Committee on International Development Minutes of Evidence

Memorandum submitted by the Department for International Development


  The memorandum considers why it has proved difficult to adequately account for environmental issues in the wider sustainable development debate; sets out the new thinking which links poverty reduction and actions to achieve the Millennium Development Goals with more sustainable use of environmental resources; and sets out in summary terms the likely impact of climate change, particularly on the poor in developing countries.

  The memorandum concludes that incorporation of the environmental component of sustainable development is central to lasting poverty reduction; climate change is just one of many environmental factors that impact on the lives of poor people; and that continued uncertainty about its precise impacts indicates the need for pragmatic adaptation measures which respond positively to existing environmental pressures and climatic variability.


  1.  The effects and impacts of climate change are a sub-set of the wider issue of the integration of environmental issues into the policies and programmes of DFID and its country partners, together with those of other bilateral and multilateral development agencies. The Globalisation White Paper contains an overall commitment to "equitable and environmentally sustainable growth". The challenge is to translate this into effective action on the ground.


  2.  The UK definition of sustainable development is "a better quality of life for everyone, now and for generations to come". Sustainable development is often interpreted as being only about the environment. We prefer to see it as taking account in a balanced way of social, economic and environmental aspects of development.

  3.  Within the totality of sustainable development, it is however true that environmental concerns are often marginalised in practice. The failure to adequately and appropriately incorporate environment into sustainable development reflects governance/institutional, market and policy failures:

    (a)  governance/institutional failures

    —  failures to integrate environment issues into poverty and development planning processes;

    —  corruption and lack of transparency by governments;

    —  weakness of environment ministries;

    —  lack of incentives for individuals and government departments to work across institutional boundaries to deal with cross-cutting issues such as the environment, particularly where they perceive this will make their life more complicated;

    —  the exclusive association of environment with environmental protection per se

    (b)  market failures

    —  insecure ownership of, or open access to, resources reduces the incentive to invest in their maintenance;

    —  externalities means that where a producer can shift the effects of pollution onto others, there is little incentive to limit the polluting activity;

    —  our knowledge of many ecological processes and of our effects on them is still weak and may never be fully reliable;

    —  the low level of public awareness in many countries means environmental impacts are often discounted;

    —  individuals generally have relatively short time horizons and pursue activities whose returns are higher in the short run, but lower in the long run, than more sustainable alternatives;

    —  some kinds of environmental damage are irreversible, but many decision-making processes undervalue the loss of options resulting from such a decision;

    —  more generally, the environment, and the goods and services it provides, is often viewed as being free.

    (c)  policy failures

    —  taxes and subsidies can prevent price signals from reflecting scarcity and the real value of environmental goods and services;

    —  poorly conceived interventions can exacerbate problems and create perverse incentives which encourage environmental degradation.


  4.  An evaluation published in mid-1999 concluded that, while avoiding direct negative environmental outcomes from its activities, DFID had failed to adequately incorporate environmental issues into its policies and programmes. Its main conclusion was "There is a gap between the high policy priority attached by DFID to environmental issues, the value of projects marked as having environmental objectives, and what has actually been delivered in terms of positive environmental impact.... Environment as a potential development opportunity—rather than as a risk to be minimised and mitigated—has not fully been mainstreamed across the bilateral programme".

  5.  In response to these conclusions, DFID rethought its environmental agenda. DFID's over-arching objective is sustainable poverty reduction to which all activities should contribute. We therefore seek to clarify and give proper weight to the link between poverty reduction and the use of environmental resources. As set out in DFID's environment target strategy paper[1], we have examined the links between environment and the health, livelihoods and vulnerability of poor people. In broad terms, the agenda has moved from one which "does no harm to the environment" to one that "tries to do good", or one that looks to exploit environmental opportunities rather than to mitigate risks. The relationship in the three main areas is set out below.

(a)  Environment and health

  6.  Environmental degradation influences the quality of life and economic opportunities for many people. While communicable diseases are the greatest source of morbidity and mortality for the poor, premature death and illness associated with environmental factors account for an estimated 20 per cent of the total burden of disease in developing countries. This exceeds the toll from malnutrition. Water-related diseases, caused by lack of access to clean water and adequate sanitation, claim an estimated three million lives each year mostly of children under five and exacerbate exposure to vector-borne diseases. Exposure to indoor air pollution, caused by burning poor quality or dirty fuels in inefficient stoves without proper ventilation, results in nearly two million deaths of women and children annually. Exposure to urban air pollution, primarily due to fine particles emitted by households that burn coal and other dirty fuels for heating and by two-stroke motorcycles and poorly maintained diesel vehicles, causes close to a million premature deaths and severe respiratory problems. Poor waste management can spread disease and is a source of poor water quality. Finally, exposure to agricultural and industrial chemicals and waste is a modern environmental health risk.

  7.  As with communicable diseases in general, this burden of disease falls disproportionately on the poorest. In both rural and urban areas, the poor are less likely to be served by water and sanitation infrastructure and are more likely to rely on dirty fuels for cooking. Urban air pollution affects all urban inhabitants, but the poor tend to suffer more severely because its effects are worse for those in poor health and because poor people have limited opportunities to protect themselves or to move to less polluted areas.

(b)  Threats to livelihoods

  8.  Most rural households rely directly on the services of natural capital stocks such as ecosystems, water resources, land and soils, forests, and fisheries for their daily livelihood. As the availability of these resources decline and their quality deteriorates, livelihoods are threatened. There are three major threats to the livelihoods of rural households. Firstly, the overuse, mismanagement, and contamination of freshwater resources. Almost a third of the world's population faces water scarcity or stress. Rapid degradation of wetlands and coastal zones is also a major environmental management problem, in part exacerbated by over-abstraction of water and by pollution. Pollution often results in poor surface and groundwater quality, on which people rely for drinking and other purposes. Secondly, soil degradation and erosion, often caused by the build-up of salts, poor irrigation and drainage, poor cultivation practices, deforestation and overgrazing. Such factors affect 30 per cent of the world's irrigated lands, 40 per cent of rain-fed agricultural lands, and 70 per cent of rangelands. Finally, the rapid depletion of forests, fisheries, and biodiversity, often as a consequence of unclear property rights, perverse economic incentives and poor governance. About 70 per cent of the world's fisheries are either depleted, overexploited, or fully exploited. Global rates of forest loss have reached alarmingly high levels. More than 20 per cent of the world's tropical forests have been cleared since 1960 and a much larger area significantly degraded.

(c)  Environment and vulnerability

  9.  In 1992, Hurricane Andrew hit the US and caused 32 deaths. In the same year, a cyclone of similar intensity hit Bangladesh and caused 100,000 deaths. Poor people are particularly vulnerable to both natural disasters and changes in environmental conditions. Changing patterns of resource use have often undermined traditional arrangements for managing and sharing such natural risks as droughts, floods, fires, and earthquakes and responding to economic shocks which in a globalised world have far-reaching impacts. Pressures on resource stocks have prompted many poor households to live and work in vulnerable zones such as floodplains, drought-prone areas, or earthquake faults. Vulnerability is increased by specialisation in the use of particular natural resources, so that households have few alternatives when disaster strikes. Furthermore, the poor have less capacity to cope. Access to credit is more difficult than for better-off households, and the poor have fewer assets to sell or consume in times of hardship. Natural disasters, therefore, often have catastrophic effects on the poor.

  10.  The poor are also especially vulnerable to conflict, which can stem from environment-related reasons such as tension over access to, and control of, natural resources. This can occur at the global level (eg access to oil); at the regional level (access to water in the Middle East); at the national level (diamonds in Sierra Leone); and at a local level (access to wetlands and grazing lands on which the poor depend).


  11.  A lot of work has been carried out internationally on developing a framework for environmental policy interventions that can improve prospects for the poor. They are summarised in DFID's strategy paper and arise from joint work by UNDP and the EC in the first phase of their poverty-environment initiative. There are six main categories of intervention:

    —  strengthen participation by the poor in decisions on access to environmental resources and services through facilitating their participation in the preparation and implementation of national and local plans, policies and strategies;

    —  protect the current natural asset base of the poor through protecting the access the poor already have to critical resources—especially in cases where the poor are in a weak position to resist appropriation of these resources by other groups—and through protecting the environmental resources upon which the poor depend for their livelihoods;

    —  expand the natural asset base of the poor through transferring ownership of natural assets to the poor (such as the recognition of community forest law, the creation of community forest rights or rights to other resources) and promoting pro-poor land reform;

    —  co-manage and co-invest in environmental services and resources with the poor, through promoting and strengthening community management of environmental resources, and assisting the poor to overcome the high initial costs for receiving better quality environmental services (such as water supply and sanitation, renewable energy, improved domestic stoves and waste management);

    —  promote environmental services, infrastructure and technology that benefits the poor through a greater focus on quality and equitable delivery of services that impact most upon their health and livelihoods;

    —  make space for greater resource transfers to the poor through reducing subsidies for environmental services that benefit the non-poor (such as energy and water) and setting up mechanisms that allow the poor to be paid for environmental services they provide to other, often richer, groups.

  12.  There is general acceptance that these links exist. However, it is necessary to move one stage further. Clear guidance has to be developed on how these links can be incorporated in programmes and policy processes for more sustainable outcomes; and the relative importance of the environment among the hierarchy of actions that can affect poverty. The issue of relative importance will have to be determined on a country by country basis, forming part of a wider process of analysis, debate and discussion in the country about policy options.

  13.  The links between poverty and environment need also to be looked at in relation to macroeconomic issues. In countries which are developing poverty reduction strategies, we have been trying to ensure that environmental issues are integrated into their formulation and implementation[2]. This also links in with the Millennium Development Goal which reads "integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources". If poverty reduction strategies adequately integrate the environment and are developed in a participatory way, with strong country ownership and commitment, focusing on outcomes and means of implementation, then they and other planning processes can be a proxy for a sustainable development strategy. The label is not important.

  14.  Quantifying the costs of environmental degradation can also be a powerful advocacy tool to change attitudes in Finance, Planning and Energy Ministries in developing countries, where important policies and expenditure decisions are made and where environmental resources may still be considered a free good[3].

  15.  DFID has been instrumental (along with IBRD, UNDP and the EC) in establishing an international poverty-environment partnership, which has drawn in other bilateral and multilateral agencies. This partnership seeks to build on highly beneficial economies of both scale and influence in working together. In addition, the involvement of many donor agencies with poverty reduction strategies and their general desire to better coordinate donor support to the integration of environment into them is a further important objective. It will run for three years in the first instance. One of the main initial outputs will be a jointly authored paper on poverty and environment links which will be presented at a high level at the World Summit on Sustainable Development, to be held in Johannesburg in September 2002. The paper will seek to change the perceptions of the relationship between poverty and environment, and will therefore have a currency beyond the Summit. We have also committed £900,000 over the next three financial years to Phase II of the UNDP poverty-environment initiative, which will concentrate on work in developing countries to establish more evidence and practical actions in the relationship between poverty and environment.


  16.  The first parts of the Memorandum have been a relatively lengthy introduction to the specific subject under scrutiny. This is because it is important to see climate change in the context of local environmental issues, and against the broader development problems (poverty, food security, health and education) to which many countries will understandably want to give emphasis.

  17.  Predictions about the impact and effect of climate change have recently been updated in the Third Assessment Report of the Inter-Governmental Panel on Climate Change (IPCC). The key conclusions are:

    —  In the period from 1990 to 2100, temperatures will rise between 1.4 to 5.8ºC; sea levels are projected to rise between 8 and 88 cm; and the number of extreme weather events will increase, but by an amount that cannot be quantified;

    —  Projected changes in climate will have both beneficial and adverse effects on water resources, agriculture, natural ecosystems and human health, but the larger the changes in climate the more the adverse effects will dominate;

    —  Given existing high atmospheric greenhouse gas concentrations, climate change will continue to occur even if emission levels are significantly reduced from their current level.

  18.  The IPCC also made regional predictions of the effects of climate change. These are summarised in Annex 1.

  19.  The atmosphere is the quintessential global public good. It is immaterial from where a ton of CO2 is released into the atmosphere. Its effect will be the same. Changes in climate can only be dealt with by an agreement which engages a sufficiently large proportion of the producers of greenhouse gases. Although this Memorandum does not propose to go into the detail of the international climate change negotiations[4], it is hugely important that near universal agreement has been achieved on the need for legal limits on greenhouse gas emissions.

  20.  However, from the perspective of the main decision makers in developing countries, climate change per se has not yet made much of an impact. There are a number of reasons for this. Firstly, the very long time horizons, when set against immediate exigencies, including conflict, HIV/AIDS and economic crises. Secondly, the lack of certainty on the relative importance of climate change as an issue, particularly uncertainty on the optimal timing of investment specifically to deal with climate change. Thirdly, the weakness of the institutional structure in many developing countries, where climate change is often led by meteorological offices, with a consequent emphasis on measurement and weather forecasting, rather than developing policies to deal with the longer-term issue of impacts, or mainstreaming these issues more generally within their respective governments.

  21.  However, the two main issues for developing countries are vulnerability and adaptation to climate change; and mitigation of greenhouse gas emissions.

(a)  Vulnerability and adaptation

  22.  Experience over the past two decades suggests that vulnerability to extreme weather events has increased markedly. Reflecting in part the pattern of development itself, loss of life, displacement, and damage and destruction of natural, social and physical capital have all increased, and the losses are relatively greater for the poor in poorer countries. Climate change will increase the probability of greater rainfall and more extended dry periods, and the frequency and severity of droughts, floods and storm surges.

  23.  In looking at issues of vulnerability, it is vital to situate the response in the specific country, or local, context. Activities required for the enhancement of adaptive capacity are essentially equivalent to those promoting sustainable development. Adaptation and equity goals can be jointly pursued by initiatives that promote the welfare of the poorest members of society eg by improving food security, facilitating access to safe water and health care, and providing shelter and access to other resources. However, climate considerations have rarely been explicitly considered hitherto in public investment decisions. This is partly because of the current lack of knowledge makes it impossible to reliably predict the costs and benefits of adaptation. Much more research is required. As a particular response to this point, DFID has recently commissioned a piece of work to identify the likely impact of climate change on the achievement of the Millennium Development Goals. The first results, which will build on earlier work on modelling climate change, should be available towards the end of 2002.

  24.  Some broad areas of work to address these issues could include developing frameworks for incorporating climate risks in economic analyses; supporting specific vulnerability assessments; evaluating the longer-term consequences of disasters to increase awareness of the potentially serious threat that variations and changes in climate pose to sustainable development; and supporting pilot initiatives to promote community level activities aimed at, inter alia, reforestation, conservation and restoration of wetlands, protection of mangroves and coral reefs, and strengthening of local institutions to improve the capacity of poor people to cope.

  25.  One relevant proposal to come out of the Marrakech conference was that funds should be made available for least development countries to produce national adaptation programmes of action (NAPAs). These would provide the framework for developing countries to examine the adaptation needs and option. Specific guidelines have been developed with respect to the development of proposals for priority activities to address needs arising from the adverse effects of climate change. However, all our experience shows that NAPAs will not be successful if they are stand alone programmes: they must be fully considered in the context of a country's overall policies, programmes and priorities. Otherwise they will fare the same as the "enabling activities" of the environmental agreements, where evaluations have shown that there has been little practical achievement.

  26.  Policies, programmes and plans across all sectors—including agriculture, health and infrastructure—need to take into account the potential impacts of climate change. DFID is working in a number of countries, such as Bangladesh—a seriously affected country—to support ministries and officials understand the impact and identify appropriate responses. We anticipate extending this work to other countries, particularly those in sub-Saharan Africa where climate change is perhaps less dramatic but nevertheless has a considerable impact on livelihoods which are based largely on natural resources. We are also funding work to develop a practical and portable climate model designed to relate climate change to impacts at the appropriate planning level.

(b)  Mitigation of greenhouse gas (GHG) emissions

  27.  The climate change negotiations are built on the concept of "common but differentiated responsibility". Based on their involvement in the UN Framework Convention on Climate Change, developing countries recognise the implications of global climate change and the need for all nations to assume responsibility for protecting the global atmosphere. However, because the contribution of developing countries to the GHG concentration has been small relative to the developed countries, and because of their urgency of their short-term needs of providing food, energy and other vital services for the poor, the Kyoto Protocol imposes no restrictions on GHG emissions by developing countries. However, it is worth noting that should present trends continue, emissions from the developing world will overtake those from the developed world by 2015.

  28.  Many developing countries have been making big efforts to improve the energy efficiency of their economic growth. (This does not often happen, though it can make good economic sense to address energy efficiency). The most striking example is China, where the energy intensity of production has declined by about 35 per cent since 1985. This has been largely achieved by removing energy price subsidies, resulting in fiscal, global and local benefits (including significant so-called "ancillary benefits" in the form of reduced illness and pollution related damage). It also show the scope for reducing emissions on a "no regrets" basis ie by addressing market or institutional failures which are of immediate benefit in any case. The Clean Development Mechanism, introduced as part of the climate change negotiations, is also designed to help with mitigation while contributing to the sustainable development of developing countries.[5]

  29.  It is also clear that the volume of GHG emissions are highly dependent on the development pathway chosen. Significant technical progress in cost-effective, climate friendly technologies has been made in the past five years and at a faster rate than expected. Where these technologies are also economic, and compatible with the human capacity in developing countries, adopting them will obviously result in a development path which is much less energy intensive.

(c)  DFID and climate change

  30.  As climate change issues are inextricably linked with the overall objectives of projects and programmes funded by DFID, it is impossible to use the normal statistical tools to assess the value of resources used to support climate change. We therefore appointed a consultancy firm to go through all our projects that might have had a climate change component. They reviewed 604 projects over the period 1997-98 to 1999-00. The results of the study showed that around £201 million over the three year period could be attributed to climate change activities. Projects which were examined included projects labelled as sustainable agriculture, biodiversity, sustainable forest management, energy efficiency, desertification, and water and sanitation. By far the largest recipient was India where the climate change commitment values of projects scored totalled £164 million.

(d)  The role of the Global Environment Facility (GEF)

  31.  The GEF provides grants and concessional funds to cover the additional costs incurred when a development project or programme also targets global environmental objectives in four focal areas, including climate change. The GEF was established in 1991, it has allocated $3.4 billion to projects and programmes, of which around $1.3 billion has been allocated to climate change. Disbursements for climate change stand at $386 million as at June 2001. GEF climate change projects are organized into four areas: removing barriers to energy efficiency and energy conservation; promoting the adoption of renewable energy by removing barriers and reducing implementation costs; reducing the long-term costs of low greenhouse gas emitting energy technologies; and supporting the development of sustainable transport.

  32.  The UK has been a strong supporter of the GEF, having provided around £215 million since its inception. Negotiations are currently under way for the third replenishment of the GEF, to cover the period 2002-06. The UK has called for a 50 per cent increase in the funds available from $2 to $3 billion. Negotiations are likely to be completed by April 2002.

(e)  Other international players

  33.  Many other international organisations and agencies are also active in this area. The World Bank has recently established a Vulnerability and Adaptation Group. UNDP is in the process of developing its own climate change and adaptation programme of action and many other bilateral donors are developing similar programmes. We intend to work closely with others to share knowledge and experience and to encourage a wider understanding of climate change and its links with poverty reduction.


  34.  For development to be sustainable, environmental considerations, along with economic and social ones, need to be integrated into overall country policies and programmes. This applies as much to developed, as to developing, countries. For DFID, the key is the extent to which the integration of the environment can contribute to sustainable poverty reduction. The Memorandum sets out how we believe this can be done. We recognise that climate change, while important, is only one factor in the set of environmental opportunities and risks.

  35.  Up to now, the actual and potential impacts of climate change have been marginal to the development agenda. The most important way to bring this to the attention of policy makers in developing countries is to focus on vulnerability and adaptation, as well as the mitigation of emissions (although it makes good economic sense for growth strategies to address the efficient use of energy resources). But it is vital that adaptation is not treated as a discrete activity. Any particular development option, and set of policies intended to influence the structure of economic development, will influence climate change. The reverse is also true: climate change will influence development options. Identifying and capturing synergies for both policy areas should lead to better, more resilient and sustainable economic development, more secure livelihoods and to more effective action to address climate change.

1   "Achieving sustainability: poverty elimination and the environment", DFID, October 2000. Back

2   The IBRD have been regularly reviewing poverty reduction strategies on the extent to which the environment has been integrated. Some improvement has been noted. See Annex II for the relevant publication. Back

3   Some estimates that have been made of the costs of environmental degradation are 8 per cent of GDP in China; 2.3-4.6 per cent in Pakistan; 4-6 per cent in India; and 4-12 per cent from the degradation of natural resources alone in Uganda. Back

4   DEFRA are submitting their own Memorandum. Back

5   The CDM will be covered in detail in the DEFRA Memorandum. Back

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