Poorer shade of green

Development Co-operation Directorate (DCD)

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Does development aid help the environment? It ought to, especially as ensuring environmental sustainability is an explicit public policy aim in the Millennium Development Goals which governments reaffirmed at the Johannesburg summit on sustainable development in 2002.

Delivering on this goal is a huge task, as it tackles issues like forestation, biodiversity, resource management, urban squalor, sanitation and global warming. One overriding aim is to integrate sustainable development goals into a range of country policies.

Roughly US$6 billion in bilateral official development assistance (ODA) from the countries of the Development Assistance Committee at the OECD is earmarked each year for environmental ends. Monitoring it can be tricky, since reporting systems can change from year to year. Still, broadly speaking, some $3 billion of aid goes to projects for which environmental goals are a “principal” objective. Building a nature reserve to promote biodiversity would be a principal objective, as would upgrading a power station to make it cleaner. The rest is channelled into projects in which environmental goals play a “significant” though not primary role, like adding a research laboratory to a university as part of a wider educational programme.

The trouble is that the overall proportion of environmentally-related ODA has declined since 2000. Moreover, only a proportion of an activity ranked as “significant” may actually target environmental sustainability, whereas the amount recorded refers to the entire activity. But there is another problem. Overall sector allocable aid to education, health, industry, agriculture, etc., accounts for some 65-70%, or around $30 billion, of total bilateral ODA, the rest being debt relief and other finance. Details on the environmental goals are available on only half of that amount. More screening of aid from large donors, like France, Italy and the US, is needed for a fuller picture.

On the positive side, there was a slight uptick in ODA from $2.4 billion in 2001 to $2.5 billion in 2002 for projects with a principal environmental justification. Nevertheless, that level was down by over 40% compared with 2000.

Reversing this declining trend must become a priority if international environmental goals are to be met. The DAC Guidelines: Strategies for Sustainable Development seek to encourage this by clarifying the importance of effective national and local strategies for sustainable development; describing the various forms they can take in developing countries; and offering guidance on how development co-operation agencies can support them.

©OECD Observer No 242, March 2004 

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