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Government response to the Independent Commission for Aid Impact’s (ICAI) recommendations on: the alignment of UK aid with the Paris Agreement

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The Government welcomes the Independent Commission for Aid Impact’s (ICAI) review on the UK’s efforts to align Official Development Assistance (ODA) with the Paris Agreement (‘Paris alignment’). We welcome ICAI’s recognition of the progress we have made to deliver on this ambitious and important commitment and our continued efforts in this area.

Ensuring that the UK’s ODA spend addresses the challenges posed by climate change and does no harm to nature is a significant part of the Government’s commitment to make tackling climate change and biodiversity loss the UK’s number one international priority, as set out in the 2021 Integrated Review of Security, Defence, Development and Foreign Policy.

Our response to the recommendations stated in the ICAI report are outlined below.

Recommendation 1

The UK should ensure that a commitment to align ODA to the Paris Agreement, with timebound milestones, is embedded at the heart of the forthcoming International Development Strategy.

Accept

The causes and consequences of poverty, climate change and environmental degradation are closely connected. As a leading donor the UK has an important role to play in supporting countries to develop in ways that accelerate global progress towards net zero emissions and reverse biodiversity loss, and ensure those at greatest risk from, and least able to cope with, the effects of climate change can adapt and become more resilient.

In 2022 we will set out the UK’s approach in a new International Development Strategy in which we will reflect our approach to these issues. The FCDO has already introduced a new programme operating framework that aligns all new ODA spend with the Paris Agreement and is taking account of nature. We are also working to progress timebound milestones for the Paris alignment across all ODA spending departments.

Recommendation 2

The UK needs to develop a cross-government reporting and accountability process for Paris alignment of UK ODA that ultimately allows public scrutiny of progress.

Partially accept

The UK’s commitment to align ODA spend with the Paris climate agreement, as set out in the 2019 Green Finance Strategy and reiterated in the 2021 Integrated Review, is shared by all ODA-spending departments. In line with established conventions for public financial management and whole-of-Government policy, Ministers and Accounting Officers within each department are accountable for delivering on the Paris alignment commitment for their department’s spend and reporting publicly on it. This is the accountability structure, and for this reason we do not accept the recommendation to develop additional accountability processes.

We do, however, accept there is more we can do across Government to accelerate implementation of the commitment, within established accountability structures, including our existing senior cross-Government climate and nature governance structures. We also accept there is more we can do to report on the progress we are making on our commitment. In the FCDO we are looking at ways to do this which could then be replicated in other government departments, including through our internal assurance processes, with a view to complementing the rigorous programme controls, including transparency requirements, already in place.

Recommendation 3

The government should urgently build appropriate capacity and capabilities across its ODA spending teams in order to design and deliver alignment of UK aid to the Paris Agreement.

Accept

ODA-spending departments have extensive expertise at their disposal that is of relevance to our efforts to align ODA spend with the Paris climate agreement. This includes specialist climate and environment capacity, as well as expertise on economics, livelihoods, governance, social development, and many other disciplines of importance to our mitigation, adaptation and nature priorities. Our first priority is to make best use of the capacity we already have in pursuit of Paris alignment.

Recognising the nature of our commitment on Paris alignment, as part of the UK’s broader goal of achieving net zero emissions by 2050, we are also developing a broader learning and development offer for all officials to embed Paris Alignment approaches in HMG’s international work.

Recommendation 4

The UK should work with other leading countries, including developing countries, and institutions to establish and promote international best practice on Paris alignment of ODA

Accept

We will continue to champion progress towards Paris alignment as part of our ongoing engagement on climate change and biodiversity loss with fellow donors at the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC), as well as bilaterally and through the International Financial Institutions.

The UK welcomes the commitment of 27 October 2021 from the OECD DAC member countries to align development cooperation with the goals of the Paris agreement. The commitment states that ‘Climate and environmental impacts must be considered in all ODA spend, including in sectors not traditionally associated with climate and the environment.’ This represents significant progress and will apply to ODA flows from all DAC donor members, globally.

With the necessary policy commitments now in place, we are working to shape international best practice and approaches to Paris alignment through the sharing of tools, strategies, policies and case studies with fellow donors. We are working with OECD DAC members to develop a new repository for climate and environment best practice on Paris alignment of ODA. We are also engaging the multilateral system, learning from the institutions that have already progressed the commitment and working to shape the efforts of those who have yet to implement policies that align their ODA spend with the Paris Agreement.