Minutes of the ERD Research Workshop

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Minutes of the ERD Research Workshop "Effective natural resources management for inclusive and sustainable growth in the context of increased scarcity and climate change: what role for the public and

1 Minutes of the ERD Research Workshop "Effective natural resources management for inclusive and sustainable growth in the context of increased scarcity and climate change: what role for the public and private sector?" Presentation of the draft ERD outline A. Borschette Conference Center, rue Froissart 36, 1040 Brussels 6 th April 2011 On the 6 th April 2011, the European Commission (DG DEVCO) organized in Brussels a Research Workshop in the context of the preparation process of the 3 rd European Report on Development (ERD 2011/2012), with the purpose to present and discuss the draft outline of the Report with a wide range of stakeholders. Around 80 people, including eminent academics from Europe and developing countries, EU policy makers (Commission and Member States), civil society and private sector representatives, attended the workshop. A. Introduction Opening the workshop, Sven KUEHN VON BURGSDORFF from the European Commission (DEVCO H1, acting head of unit) explained the overall background of the ERD initiative and motivated the choice to dedicate the 3 rd ERD edition to the topic of natural resources management (NRM), with a specific focus on the land-water-energy (WEL) nexus. He outlined some policies and initiatives already existing at EU level in this area, such as the 2004 land policy guidelines and the 2002 EU water initiative. He also explained how this topic fits with the ongoing reflection on how to enhance the impact of EU development policy to support inclusive and sustainable growth in developing partner countries. In that regard, he proposed a working definition of the concept of inclusive growth: "Inclusive growth is concerned with, firstly, the process of enabling the effective participation of large segments of the population in the wealth creation process and, secondly, the outcomes which have to benefit as many people as possible. An approach towards inclusive growth comprises (a) granting equality of opportunity in terms of access to resources and markets; (b) establishing a non-discriminatory regulatory business environment for individuals and enterprises; (c) increasing productive employment opportunities; and (d) strengthening social protection for disadvantaged and vulnerable segments of society with a view to enhancing their resilience capacity and facilitating their effective participation in economic wealth creation". 1

2 B. General presentation of the draft outline Commission's introduction was followed by a general presentation of the structure and story line of the draft outline of the Report by Dirk WILLEM TE VELDE (Overseas Development Institute (ODI), ERD Team Leader). He explained the new global context for NRM, which includes a growing population and growing demand for resources; food prices volatility; climate change and environmental degradation as well as resources scarcity, which call notably for a shift towards a global green economy. He explained the relevance of the WEL nexus in that new context, highlighting both the interactions/overlaps and specificities of these resources. He also proposed a definition of the central concept of inclusive and sustainable growth, approaching separately the three components of "growth", "sustainability" and "inclusiveness" and explaining the possible trade-offs and synergies between these three components. The central research question of the ERD 2011/2012 will be to analyse the respective roles and interactions of public and private actors in managing natural resources, in particular the land, water and energy nexus, in a way which is conducive to inclusive and sustainable growth, Te Velde explained. Various analytical frameworks and tools will be used and applied to different concrete case studies to review existing evidence and provide innovative findings in that area. At last, the Report will analyse the policy implications and suggest options to business actors, national governments and the international community, with a specific focus on the EU's potential role and added value. At last, Te Velde described the next steps of the process towards the publication of the Report, scheduled for end of 2011-early In particular, he mentioned the forthcoming consultation/networking events planned in 2011 to keep stakeholders involved in the ERD team's work: Maastricht, May; Bonn, 8-9 June; Nairobi, July; York, September; and Brussels, November/December. The general presentation of the draft outline was followed by a first round of comments initiated by a panel of eminent academics from different developing countries. Mustafizur RAHMAN (Centre for Policy Dialogue, Bangladesh) welcomed the draft outline and made some suggestions from a Least Developed Country (LDC)'s perspective. He suggested in that regard to enrich the ERD with the outcome of the forthcoming Fourth United Nations Conference on the Least Developed Countries (LDC-IV), to take place in Istanbul, Turkey, on 9 th -13 th May 2011, as well as with the WTO Aid for Trade agenda. Moreover, Rahman noted that particular relevance should also be given to forestry when investigating the WEL nexus as this is a key natural resource for many LDCs. Other suggestions included the need to look at the role of civil society actors in NRM, the importance of technology transfers as well as the regional dimension of NRM (including the key issue of LDCs' negotiating capacities). Luis Carlos JEMIO (Bolivia's former Minister of Finance) outlined the economic context which is relevant for the Report. He explained that, due to high exportable commodities prices, many natural resources-rich countries (especially in Latin America) performed relatively well during the recent financial and economic crisis, thus being able to reduce their fiscal deficits and to implement counter-cyclical and social policies such as cash transfers. However, high commodity prices also entail some risk and challenges, such as an increase in food prices in domestic markets, "Dutch disease" effects with an overspecialization in commodity industries to the detriment of other economic sectors, as well as pressure on the environment. Jemio outlined different types of public and private interventions to manage 2

3 these challenges, as well as the multiple trade-offs that it can entail. Finally, he insisted on the importance for implication for resources-rich countries to use commodity rents to invest in other kinds of capital, especially human capital, infrastructure and technology At last, Mike MULLER (Witwatersrand University, South Africa; former Director General of the Department of Water Affairs and Forestry of South Africa's government) provided some insights from the South African experience in managing the WEL nexus and highlighted the shortcomings that, in his view, the draft outline presents at this stage. Firstly, he pleaded for a more "people-centered" approach, looking at natural resources as livelihoods in the first place. Secondly, he mentioned other relevant transitions that should be taken into account in setting the general context, such as the growing urbanization of several areas of the world. He also proposed to differentiate among and within countries in carrying out the analysis, along the rural/urban, richer/poorer, local/regional/global dimensions. This first round of comments was followed by an open debate with the audience, moderated by Alison EVANS (Director, ODI). The main remarks and suggestions from the floor included: - General concerns as regards the too broad scope and lack of clear focus of the Report at the current stage, both from a geographical, level (global/regional/national/local) and thematic point of view (the long title of the draft outline was mentioned as illustrating this concern). - The need to define inclusive and sustainable growth referring to both the outcomes of the economic activity and the processes needed to achieve them, as well as the need to pay more attention to the "inclusiveness" and "accessibility" aspects of NRM. - Questions on the choice/rationale to focus on the WEL nexus and suggestions to integrate other resources in the analytical picture of the report, such as forestry and minerals considering their importance for inclusive and sustainable growth in developing countries. - The necessity to take into account that developing countries' resources endowment (exporter countries perform differently than importers) and innovation capacity is diverse, especially as far as "social innovation" is concerned. Also, it was suggested to pay greater attention to the different conditions of rural and urban poor populations and specifically of small scale farmers. - Suggestions to analyse the conflict/security dimensions of the WEL nexus. - The need to better define and recognize the diversity of private and public actors as well as the complexity of their interactions. Participants also emphasized that the draft outline currently fails to give sufficient relevance to civil society actors. - The need to analyse as well collective action coordination mechanisms alternative to State regulation and markets (natural resources as "commons") and to distinguish more clearly "actors" and "institutional means of coordination". - Improving the way to look at the WEL nexus by adopting also a governance perspective, giving greater importance to the (formal and informal) institutional arrangements (e.g. property rights) that exist and that would be needed to ensure inclusive and sustainable 3

4 growth. This perspective would be of great importance for better understanding what is happening in the countries and improve the relevance of policy recommendations. - The possibility of including gender, voices/participation, educational and social capital elements in the concept of inclusive and sustainable growth. - The possibility of linking the ERD work with the 2010 Nagoya Protocol adopted by the 10 th Conference of Parties to the Convention on Biological Diversity. - The importance to look at the issues at stake also from the point of view of EU internal policy, adopting a Policy Coherence for Development (PCD) approach. - The Report's added value, which would be maximized if question would be aimed at "evaluating" concrete cases and assessing the "implementation" of policies/initiatives, rather than "describing" them. - The possibility for the Report to discuss the potential role of the European Investment Bank (EIB), as it was suggested that in cases of market failures, public financial institutions might be better placed to act effectively, due to the long return period of the investments needed to tackle long term challenges such as climate change. - Concerns about the possibility to draw generally applicable policy recommendations from highly specific case studies, as well as questions on the criteria to select the case studies. C. First working session Global context and trends in NRM After the general debate on the draft outline, Imme SCHOLZ (DIE, ERD Team Member) presented in details the global context and trends which frame NRM for inclusive and sustainable growth. She presented what drives natural resources use, the evolution of the patterns of use (increase in consumption, growing efficiency, regional disparity in material intensity) as well as how things are changing now (3 of 9 planetary boundaries already transgressed, emerging "new middle class", particularly in China and India, with strong economic, political and social implications), highlighting inter alia the strong linkages between human development and sustainability. Scholz then explained why our current way to manage natural resources is deficient (domination of short-term economic interests, institutional weaknesses, global/local trade-offs, knowledge and data gaps; lack of adequate property rights. ) and what are the challenges in terms of shaping public-private relations/interactions for the future. This presentation was followed by an open discussion in working groups dedicated to the WEL nexus (figure 3 of the draft outline, p.11). This session was chaired by Paul ENGEL (Director, ECDPM). After a twenty minutes work in groups, each group exposed their main arguments and suggestions on how to improve the Report. The main ideas come out from this exercise were: - To add institutional and governance arrangements for reconciling competing investments in different resources, while dropping "water access for productive uses" (Group 1); 4

5 - To introduce rent management/use while dropping "water access for productive uses" (Group 2); - To substitute "biofuels" with "biomass" (Group 3); - To take the perspective of assessing/building national capacities for regulating all of the issues as stake, linking this to the role of education; to broaden the issue concerning land to "land policy and land ownership" (Group 4); - To include "biofuels" under the issue concerning "food security", while recognizing that hydropower is an issue at the centre of the WEL nexus (Group 5); - To take well into account the argument of inclusiveness when looking at all issues; to look at what would be the EU's comparative advantages in tackling them (Group 6); - To focus only on sustainable biomass production (Group 7); - To broaden the issue concerning land to "land policy and land acquisition" and to add a sustainable management dimension to the one on "water for productive uses"; to look at all issues from a climate change perspective (Group 8); - To add an issue concerning the extractive industry (Group 9). - To take into account the fact that water is important also for domestic use (Group 10). In addition, the need to find the right entry points and story line when depicting the context in which the issues related to the WEL nexus are tackled was highlighted by several participants. D. Second working session Public and private interactions in natural resources use: research questions/possible case studies The second working session was dedicated to the different relevant research questions to guide the analytical work on the respective roles and interactions of public and private actors, as well as on possible case studies for the Report (see Box 19 of the draft outline, p. 19). The group exercise was repeated, again under the moderation of Paul ENGEL. Main outcomes were the following: - Some participants suggested avoiding approaching the case studies in an over-descriptive way as well as in an over-prescriptive one; - Many comments converged on the importance to define carefully the private and public sectors, and of adding civil society actors as a third category of players. Also, it was mentioned that in some cases, coordination/management mechanisms in place cannot be traced back to formal actors (ex: informal property rights). - It was suggested to devote one case study to South-South Cooperation; - It was suggested to choose the case study on biofuels according to the weakness of the governance and the level of poverty of the context; 5

6 - Case studies may be differentiated according to country typologies (e.g. resource-rich, arid, landlocked, small islands ); countries could also be chosen one by continent; - It was asked to investigate what is meant by a "successful case" when it comes to choosing some for the report; It was also suggested to clearly identify the target group of the report; - It was proposed to adopt a PCD perspective when looking at the case studies; - Some participants argued that the approach for the case studies should be more "problemcentred" than "actor-centred": this would entail a bottom-up approach to the issue at stake, starting from concrete situations at the local level (how are poor people using/managing natural resources?) and progressively adding other actors and interactions that are relevant at different levels on a case-by-case basis; - It was suggested to highlight the trade-offs in the decision making process arising from the diversity of the actors involved; - Mining activities in Bangladesh were proposed to be a good example of how resource scarcity and competition influence policy making processes. E. Roundtable on the policy implications The last working session was moderated by James MACKIE (ECDPM, ERD Team Member) and consisted on a round table to identify and discuss policy gaps concerning the WEL nexus, as well as the policy implications that could be drawn at this stage for national governments, the European institutions and the EU member states as well as the private sector. Robert BAILEY (OXFAM International) stressed the importance of power politics and political economy when looking at NRM and made the case for a "people-centred" approach with emphasis on equity, human rights, empowerment and participation of vulnerable people in decision-making processes. Bailey also insisted on the importance of policy enforcement and transparency (EITI mechanism for other resources such as land?). He pleaded for more efforts on climate change adaptation, on access to energy for the poor and on sustainable agriculture, and stressed the importance of a PCD approach (biofuels, CAP reform, carbon emissions ). Andrew HAGAN (World Economic Forum) provided a private sector perspective to the issues discussed and welcomed the fact that the report could give private sector actors useful means to design better policies so as to be coherent with the concept of inclusive and sustainable growth. This could entail making better use of risk assessment tools, especially when actors operate in conflict areas. Hagan also mentioned the huge diversity of private actors (no one perspective). Discussing the levels of policies, he stressed that global policies generally do not work as a starting point as they are too ambitious. He highlighted the importance of education and technology as drivers for change, and made the case as well for the right enabling environment (clear rules). Obadiah MAILAFIA (ACP Secretariat) reminded that development is above all about people and pleaded for putting human beings at the heart of the policy discussions on NRM. 6

7 In terms of policies for NRM, Mailafia referred to several EU initiatives such as the MDG Initiative and the Green paper process on EU development policy. He stressed that while innovation is key to inclusive and sustainable growth, local-based innovation built on traditional knowledge is sometimes more sustainable than imitation. He added that while the Commission often fails to impact effectively on private sphere's policies, it could be decisive in mobilizing resources from the European Investment Bank (EIB) and the EBRD. At last, he also made the case for a PCD approach for the Report, highlighting the unique partnership between the EU and the ACP countries. Philip MIKOS (European Commission, DEVCO I2, Head of Unit) highlighted that global governance has revealed its importance in specific areas, but it is at the national level that efforts are more likely to produce concrete outcomes (importance of national governance). However, he stressed that efforts made in policy designing are often frustrated by poor implementation and enforcement mechanisms (ex: EU land policy guidelines). He also noted that while the Commission is currently not really good at working with then private sector, a more active involvement of the EIB and the ERBD would attract actors from the private sectors. At last, Mikos also mentioned the importance of enhancing EU coordination. F. Wrap-up Session François BOURGUIGNON (Director of the Paris School of Economics, Scientific Advisor for the ERD initiative) wrapped-up the main conclusions of the workshop, highlighting the following points: - Currently, the scope remains too broad and the ERD team should prioritize the different issues and entry points: NRM is the focus of the Report, inclusive and sustainable growth is the objective; climate change and resources scarcity the context The "press release" containing the main messages of the report should also be drafted early in the elaboration process to help in refining the scope and story line. - As regard climate change, the issue of adaptation, rather than mitigation, should be prioritized; - Access to energy in developing countries and climate finance are issues that would be inaccurate to discard; - For the moment, the case studies (that will compose the substantial analytical part of the Report) are not clear and it still remains to decide how to select them (but timing is short). The authors should notably decide in that regard if the case studies would be limited to literature reviews or if some new research will need to be carried out; - As regards the policy aspects (the most difficult part), the political economy of NRM should be taken into account. Besides, policy recommendations to the EU should concern how it could support developing countries to develop their own policies (with a PCD approach). At last, given the lack of efficacy of the current global governance, policy recommendations should rather look at the national level. Sven KUEHN VON BURGSDORFF (European Commission, DEVCO H1, acting Head of Unit) concluded the workshop by recalling that the ERD is an independent research exercise 7

8 which aims in the end at informing EU policy making processes, building on enhanced bridges between academics and policy makers, academic excellence and innovation. This year ERD edition could in particular provide very valuable inputs to the EU in the context of the discussions and preparations towards the forthcoming UN Conference on Sustainable Development that will take place in Brazil on 4-6 June 2012 (RIO+20). The ERD Secretariat 8

11559/13 YML/ik 1 DG C 1

11559/13 YML/ik 1 DG C 1 COUNCIL OF THE EUROPEAN UNION Brussels, 25 June 2013 11559/13 DEVGEN 168 ENV 639 ONU 68 RELEX 579 ECOFIN 639 NOTE From: To: Subject: General Secretariat of the Council Delegations The Overarching Post