New review: International Climate Finance: UK aid for halting deforestation and preventing irreversible biodiversity loss

15 Jul 2021

• ICAI review finds UK aid approach to halting deforestation and preventing irreversible biodiversity loss around the world is satisfactory in most areas and making a positive contribution, but could do more to ensure it achieves impact
• UK has a range of relevant and credible programmes tackling drivers of deforestation and biodiversity loss but could increase impact with a tighter strategic focus and concentrated resources
• Policy level coherence is good between the government departments involved but coordination is sometimes lacking at country level
• Major challenges with measuring results mean it was difficult to reach conclusions on the overall effectiveness of the portfolio, but individual programmes are delivering well at an output level
• Greater attention should be given to scaling up successful programmes

ICAI has scored the UK aid’s approach to halting deforestation and preventing irreversible biodiversity loss as green-amber, meaning there is good achievement in most areas, but partial achievement in others. The report finds the UK has a range of relevant and credible programmes tackling drivers of deforestation and biodiversity loss but lacks evidence of a combined impact at scale that might result from a clearer strategic focus. ICAI’s report provides five recommendations for the government to improve its approach to tackling these issues. A literature review of ‘what works’ is also published separately.

The review published today considers the performance of UK aid in halting deforestation and preventing irreversible biodiversity, assessing the relevance, coherence and effectiveness of the UK’s approach. It covers both UK aid programmes, through bilateral and multilateral channels, and related diplomatic efforts to galvanise international action, in the period from 2015 to 2020. The work assessed was delivered by three departments – the Department for Business, Energy and Industrial Strategy (BEIS), the Department for Environment, Food and Rural Affairs (Defra) and the Department for International Development (DFID), now merged into the Foreign, Commonwealth and Development Office (FCDO).

ICAI Chief Commissioner, Dr Tamsyn Barton, said: “Global rates of deforestation and biodiversity loss are catastrophic. Between 1990 and 2020, the world lost 178 million hectares of forests each year. The UK has been an active participant in international initiatives to protect forests and biodiversity, spending over £1 billion in aid on protecting forests and biodiversity between 2015 and 2020.

“It is therefore very encouraging to see the positive impact UK aid is having on these two key issues, particularly in the illegal logging and timber trade, and to observe good cooperation between the three government departments. However, there is more to be done, especially with regards to measuring the effectiveness of interventions and ensuring a clear strategic focus.

“Overall, we find that the work done over the review period has laid some solid foundations for building an effective portfolio as the government doubles its climate finance, and commits 30% of that funding on nature, but that some improvements will be required, if the programmes are to achieve the government’s policy objectives.”

The aid watchdog scored the UK aid’s approach to preventing deforestation and biodiversity loss as green-amber in all three aspects: relevance, coherence and effectiveness, meaning it is making a positive contribution but could do more.

ICAI observed that the UK has played a significant role at a global level in supporting coordinated action, helping to secure a number of global commitments. Within the UK government, policy coherence at central level was good and there is a clear division of labour between BEIS, FCDO and Defra. However, there were examples of avoidable duplication and fragmentation, most notably around private-sector partnerships and sustainable financing, which could be improved through better coordination. The review found the quality of private sector engagement across the portfolio was variable and suggested that given the scale of the challenge of deforestation and biodiversity, a more concerted effort to bring about change in the private sector is needed.

The report found programmes were well targeted towards prevailing drivers of deforestation and biodiversity loss but that there was a lack of strategic focus at portfolio level, and at country level. Some of the programmes reviewed were well grounded in evidence on ’what works‘, including illegal logging and the timber trade, however other interventions were not evidence based and made unsubstantiated assumptions about their eventual impact.

ICAI found good quality engagement with people expected to benefit on programmes that provided direct support to communities, but consultation was not consistent and there were concerns that women generally, as well as young people and the poorest are excluded from forest governance arrangements. Reviewed government documents recognised the need to do more with national governments to overcome the barriers for engagement with these groups.

The watchdog noted that measuring results in the protection of forests and biodiversity is challenging, and that this was an area where the UK could be doing better. Due to the government’s weaknesses in results measurement, ICAI noted it was difficult to reach conclusions on the overall effectiveness of the portfolio. At programme level, the report found a good range of effective interventions with some examples of exemplary programming, such as the Forest Governance, Markets and Climate (FGMC) programme which has been able to influence demand for timber in major consumer markets while supporting reforms in producer countries. The UK also had a wide range of pilot interventions and was willing to take risks with innovative new approaches, but the review warns that there needs to be greater investment in understanding ‘what works’ so successful pilot programmes can be scaled up effectively. ICAI offers five recommendations for the government to improve the impact of its aid to tackle deforestation and biodiversity loss:

• UK bilateral ODA support to tackle deforestation and biodiversity loss should have a tighter strategic focus, concentrating resources to increase impact.
• All programmes addressing deforestation and biodiversity loss should be monitored and evaluated against common, measurable indicators designed specifically for assessing deforestation and biodiversity impacts.
• Independent external evaluations of the bilateral programme should be carried out regularly at programme, country and global levels and then used to shape strategic funding decisions.
• UK bilateral programmes should be guided by social impact analysis and safeguarding measures, to maximise the benefits for and minimise negative impacts on local communities, women and vulnerable groups.
• Gender issues need greater prioritisation in policies and programming in order to ensure women benefit from investments in forestry and biodiversity.