International climate finance: UK aid for halting deforestation and preventing irreversible biodiversity loss

Rationale, purpose and scope

The UK government has made a firm commitment to supporting international efforts on climate mitigation and adaptation. The purpose of this ICAI review is to assess the effectiveness of UK aid in halting deforestation and preventing biodiversity loss, including funds spent through multilateral channels. It will also assess how well the UK has contributed to building an evidence base on “what works” and helped to mobilise other sources of funding to scale up effective global action.

This is a topical area of considerable public interest, where the UK government has made strong policy commitments. It is also one area of the global efforts to address climate change widely considered to be lagging. Currently, just 3% of international climate finance to reduce emissions goes towards protecting forests and other ecosystems, even though tropical forest loss currently accounts for 8% of the world’s annual carbon dioxide emissions. In addition, biodiversity is declining globally at rates unprecedented in human history – and the rate of species extinctions is accelerating, with grave impacts on people around the world now likely.

The UK is one of the leading global funders of international climate action. In the 2015 aid strategy, it pledged £5.8 billion of official development assistance (ODA) in climate finance over the five years to 2020. At the 2019 UN General Assembly, the UK pledged to double that figure to £11.6 billion by 2025. In 2021, the UK and Italy will co-host the next UN Climate Change Conference (COP26), which has been delayed by the COVID-19 pandemic.

The review will explore how well UK aid has helped to identify scalable solutions and mobilise finance. Given the UK’s long-standing engagement in the area and its commitment to leading international efforts on climate change, the review will examine both the direct results of UK programming and the government’s wider efforts to galvanise international action. It will explore efforts to ensure the sustainability of forests, conserve biodiversity and end the illegal wildlife trade. The review will cover both programmes dedicated to protecting forests and conserving biodiversity, and those identified by the government as having elements that are relevant to these objectives.

ICAI conducted a review of the UK’s International Climate Finance (ICF) in 2019, awarding a green-amber score. That review focused on the UK’s efforts to help developing countries transition to low-carbon development, but did not cover wider issues of forestry, biodiversity conservation and combatting the illegal wildlife trade. This review will extend its scope beyond the response to climate change to include scrutiny of these important areas, while providing an opportunity to assess progress on a recommendation from the 2019 review, which is still outstanding (Box 1). The review will not cover UK efforts to protect forests and biodiversity within the UK.

Background

This review relates closely to Sustainable Development Goal (SDG) 15, ‘Life on Land’, which includes targets on preventing deforestation, halting biodiversity loss and ending the illegal wildlife trade. SDG 15 reflects the importance of forests and biodiverse regions to the global climate and to sustainable development in sensitive ecosystems. Forests are a key economic resource, providing food, medicine and fuel for more than a billion people around the world. Deforestation is in turn a major cause of biodiversity loss, as well as a significant source of greenhouse gas emissions.

According to the government, measures to protect vulnerable ecosystems (“nature-based solutions”) are crucial to climate change mitigation and adaptation, as well as to addressing biodiversity loss. Without adequate regulation, economic incentives make forest exploitation much more profitable than conservation. Efforts to protect forests encompass a range of measures, including legislative protection of landscapes, strengthening the land rights of indigenous peoples, enforcing environmental regulations and promoting
sustainable livelihood options for cultivators at the forest frontier.

The UK’s climate portfolio includes a wide range of measures relating to the protection of forests and biodiversity. These have been managed by three government departments: the Department for Business, Energy and Industrial Strategy (BEIS), the Department for Environment, Food and Rural Affairs (Defra) and the former Department for International Development (DFID), whose programming is now being taken forward by the Foreign, Commonwealth and Development Office (FCDO).

We estimate that the current portfolio includes more than £580 million in current bilateral aid commitments related to deforestation and biodiversity, including headline programmes addressing illegal timber, forest governance and sustainable land use. The size of the multilateral portfolio is more difficult to estimate, as much of it takes the form of contributions to international climate funds that work across multiple areas. An additional £1.3 billion in climate-related bilateral programming has recently been announced, which includes a £220 million International Biodiversity Fund to protect endangered species and habitats and a £100 million Biodiverse Landscapes Fund to protect mangroves and forests. The UK’s geographical focus reflects the world’s most significant forested areas, including the Amazon and Congo basins and tropical forests of West Africa and South-East Asia. One feature of the portfolio is its use of ‘payment by results’ funding approaches, whereby funds are provided if and when partner countries are able to show tangible results in reducing deforestation. This, and other funding approaches being deployed across the portfolio, will be reviewed to assess overall levels of effectiveness.

This review is timely in view of UK leadership of forthcoming international events. The first of these, COP26, is now scheduled for late 2021. The BEIS secretary of state, Alok Sharma, who will chair the event, has highlighted nature (safeguarding ecosystems, protecting natural habitats and keeping carbon out of the atmosphere) as one of the five key priorities for the COP. The second event is the UK’s presidency of the G7 in 2021, with a heads of government meeting in the summer of 2021, where the global climate response is expected to be on the agenda.

Review questions

This review will examine how well the UK is using its aid funding and influence to halt deforestation and stop biodiversity loss in developing countries. The review questions are built around the criteria of relevance, coherence and effectiveness. Our review questions and sub-questions under each of these criteria are set out in Table 1.

Table 1: Our review questions

Methodology

The methodology for the review will involve six components, to gather and compile evidence around the review questions and ensure a sufficient level of triangulation of findings (see Figure 1). The six components are:

1. a literature review
2.  a strategy review of the UK’s guiding strategies, policies and commitments
3. a multilateral channels review, examining the UK’s support through multilateral channels and its efforts to
   galvanise international cooperation and leverage other aid flows
4. programme reviews, providing detailed desk reviews of a representative sample of programmes
5. three country case studies of UK portfolios
6. citizen engagement, undertaken with citizens and people affected by UK aid in programme areas.

The review will draw on evidence from UK strategy and programme documents, key informant interviews with UK government departments and a wide range of implementing partners, partner country officials and independent experts. It will include structured consultations with civil society and private sector representatives. We will engage with a selection of citizens in communities to collect feedback on whether the UK aid targeted to them reflects their needs and priorities. These consultations will involve men, women and
young people, including indigenous peoples’ groups, and consider the impact of UK aid on local livelihoods, rights and governance.

Figure 1: Methodology

Component 1 – Literature review: The literature review will outline the overall context for deforestation and biodiversity, such as key drivers of biodiversity and habitat loss as well as the social, economic, political and other contextual barriers to programming. It will include evidence about “what works” in programmes addressing deforestation and conserving biodiversity and will consider how forests and biodiversity fit within the broader global climate response. The literature review will be published alongside the report.

Component 2 – Strategy review: This component will review documentation on the UK government’s approaches to deforestation and biodiversity, including relevant policies, strategies and guidance. Following on from ICAI’s 2019 ICF review, we will assess progress on developing a new cross-government strategy for international climate finance. We will conduct a mapping of UK aid for halting  deforestation and loss of biodiversity, through its various funding channels. We will explore coherence and coordination across the three responsible departments, and with other UK policy areas and initiatives. We recognise that non-ODA government policy, such as on international trade, finance and investment, can intersect with ODA efforts to tackle deforestation and biodiversity loss, and where necessary we will describe this relationship. We will undertake key informant interviews with a cross-section of UK government officials, academics and other development partners, as well as consultation events with UK private sector and civil society representatives. We will review how well the departments are learning about the field of work, including their efforts to synthesise and expand evidence on successful interventions, and how well they are capturing and sharing lessons from their activities.

Component 3 – Multilateral channels review: This component will assess how effective the UK is in influencing and shaping global progress in areas of forestry and biodiversity, including halting the international illegal wildlife trade. The review will explore the UK’s support and influence through one important multilateral channel – the Global Environment Facility – and assess how effectively the UK, as a major donor, is shaping its operations, strategies and approaches. We will summarise the degree to which the UK has been able to use its influence to galvanise international cooperation on climate change, forest protection, biodiversity conservation and tackling illicit international markets in timber and wildlife. This component will include a review of briefing documents, programme documents and board meeting documents, supplemented by key informant interviews with officials (from within and outside the UK government), as well as representatives from intergovernmental bodies relating to climate, biodiversity and forests.

Component 4 – Programme reviews: We will conduct desk reviews of a sample of nine programmes and projects, through review of relevant programme documents and virtual interviews with responsible UK government officials, implementing partners and partner country counterparts. The sample of programmes has been selected to ensure coverage of the main themes, approaches, funding channels and departmental responsibilities (see Section 5 on sampling). The programme reviews will assess whether the programme designs are coherent and evidence-based, whether they involve appropriate consultation with affected communities, and the extent to which they are being implemented effectively and achieving their intended results.

Component 5 – Country case studies: We will conduct three country case studies. We have selected Indonesia, Colombia and Ghana, given their importance within the overall portfolio, their geographic spread and the nature of programming within each country (see Section 5 for the detailed sampling criteria). The COVID-19 pandemic has also influenced the selection of, and process for undertaking, case studies, as discussed below. The case studies will involve a portfolio-level review of relevant UK aid spending in each country, including bilateral, multilateral and multi-bilateral14 spending, since 2015, as well as national partnerships. We will undertake brief background assessments of each country, to understand the context. Given current travel and entry restrictions due to the COVID-19 pandemic, country case studies will be done remotely through a series of interviews and virtual meetings with UK and partner government representatives, embassy staff and project partners. Furthermore, and as relevant, consultations will be held with representatives of civil society, the private sector and other development partners, as well as with affected populations (see Component 6). If circumstances allow, we may undertake one limited country visit in person.

Component 6 – Country case studies: Citizen engagement is a key component of the methodology. ICAI is committed to incorporating the voice of citizens in countries affected by UK aid into its reviews. We will undertake citizen engagement processes in Indonesia and one other case study country, within the confines of practicalities around the COVID-19 pandemic. The engagement will be undertaken by national research partners, and its form will be dictated by the local COVID-19 measures in place at the time and supported by rigorous risk assessment and research protocols. The research will be primarily qualitative in nature, involving focus groups with members of communities and representatives of marginalised groups living in forested areas and ecosystems targeted by UK aid programmes. A full design of this component will be undertaken, including safeguarding protocols, together with data collection methods and sampling, with particular focus on capturing the voices of marginalised groups.

Sampling approach

The methodology involves two sampling components: a selection of programmes for desk review and a selection of case study countries.

Table 2: Sampling criteria used in case study selection for the programme review

For the programme reviews (Component 4, above), our sample was selected from 27 programmes that the responsible departments identified as including forestry and biodiversity activities. The portfolio is diverse in terms of focus country, size of budget, funding channel and intervention type. To obtain a representative sample, we have used multivariate sampling, based on five principal criteria (overall goal, type of intervention, expenditure, department responsible and funding channel) and a set of sub-criteria for each (Table 2). Nine programmes were selected as offering the most representative sample across the five sampling criteria. Some of the programmes selected have multiple components. In such cases, we will select a sample of components for detailed review, once more information becomes available.

Table 3: Sample of nine selected programmes

For country case studies (Component 5, above), we have selected three countries reflecting the diverse contexts in which the portfolio operates. This selection ensures representation from the three continents (and across major forest biomes) within the portfolio, and covers low- and middle-income countries and post-conflict states.

We used five primary sampling criteria to make our selection:

• number of projects operating in the country
• UK government departments leading projects in the country
• range of objectives represented in the programmes
• range of intervention types
• range of delivery channels.

An initial selection was made of the five countries with the highest number of programmes in the global portfolio: Brazil, Colombia, Ghana, Indonesia and the Republic of Congo. This was narrowed down to the final selection of Indonesia, Colombia and Ghana, taking into account a number of practical considerations such as ease of access, communication and the COVID-19 pandemic.

Limitations to the methodology

This review will inevitably be subject to a number of limitations, which will affect the degree to which comprehensive, robust and fully triangulated findings can be obtained. Some key aspects are summarised below:

COVID-19: The ongoing COVID-19 pandemic places restrictions on travel to and within partner countries and affects the degree to which face-to-face meetings with programme partners and citizens can be undertaken. As indicated, interviews will be conducted remotely and through in-country teams, where appropriate. A particular challenge in this context is the degree to which citizen engagement can be conducted in ways that safeguard vulnerable communities, while ensuring that the voices of marginalised groups are effectively heard
and represented.

Influencing: While the three departments invest a significant amount of effort in international influencing work, lack of documentation means that impacts are hard to assess. Our methodology will focus on several discrete influencing objectives (such as leveraging international finance and promoting international cooperation on tackling the illegal wildlife trade). It will trace key influencing processes, collecting indicative evidence of plausible UK contributions to influencing goals.

Data on impact: Our methodology depends primarily on data generated by programme monitoring and evaluation systems to assess effectiveness. Reported results will be triangulated to a limited extent through key informant interviews and citizen feedback, and we will conduct our own assessment of the credibility of the results data that has been generated. However, since our methodology depends on the data produced by programmes, we may not be able to reach conclusions on the programmes if such data is of poor quality or we judge it to be unreliable.

Risk management

We have identified several risks associated with this review and propose a series of mitigating actions, where necessary, as presented below in Table 5.

Table 5: Risk and mitigation

Risks will be reviewed on a regular basis and any mitigating actions adjusted as the external operating environment changes and if any new risks emerge.

Quality assurance

The review will be carried out under the guidance of the ICAI chief commissioner, Dr Tamsyn Barton, with support from the ICAI secretariat. Both the approach paper and the final report will be peer-reviewed by Dr Mary Hobley, a leading international expert on forest governance and the links between forests and rural livelihoods.

Timing and deliverables

This review will be executed over a period of eleven months, beginning in August 2020.

Table 6: Summary of the timeline for the review