Deutsches Institut für Entwicklungspolitik / Briefing Paper

During El Niño in 2015, devastating forest fires in Indonesia directed international attention towards land use changes and deforestation on the archipelago. At least partially a result of clearing land for plantation estates, those fires spurred debate about the sustainability of palm oil, which is the most traded vegetable oil. Recently, seven European governments signed the Amsterdam Declaration. Its signatories, including Germany, committed themselves to helping the private sector to achieve a fully sustainable palm oil supply chain by 2020.
Despite progress made in talks on sustainability, little is visible on the ground. To the contrary, as the Indonesian case shows, that palm oil expansions can cause soil and water resources to degrade. Especially weak law enforcement poses a major challenge to a sustainable production of oil palm. At the same time, the oil palm business has been expanding rapidly in Latin America and West Africa. For smallholders oil palm cultivation is an attractive land use option that requires little labour input and allows them to engage in off-farm income activities.
Current discussions about the ecological impacts of expanding palm oil production focus on how it destroys primary forest and peatlands, increases greenhouse gas (GHG) emissions and reduces biodiversity. Little attention has been paid to concerns that oil palm plantations severely impact local water resources and increase flood risks. This briefing paper makes use of a recent interdisciplinary publication (Merten et al., 2016) and extensive fieldwork to analyse the way expanding palm oil production impacts the hydrological cycle. It also discusses water management criteria in certification schemes and national regulations. Measurements of eco-hydrological processes and observations of Indonesian farmers indicate that large-scale oil palm monoculture has long-term negative consequences for smallholder farming systems and the water supplies of rural communities.
Our interdisciplinary study has revealed that: local populations report water shortages in dry seasons in the wake of new oil palm plantations; expanding oil palm plantations leads to more frequent floods; intensive monoculture plantation systems severely degrade the soil, impeding the recharge of groundwater reservoirs and increasing surface runoff; and oil palm cultivation impacts the local hydrological cycle more severely than other crops.
Based on these findings we recommend that:

1. The European Union (EU) should set mandatory sustainability standards for all palm oil products.
2. Water and soil management should have prominent roles in environmental impact assessments and sustainability standards.
3. Sustainability standards for agrofuels should be better monitored. If compliance cannot be guaranteed, the EU should consider a temporary ban on using palm oil for agrofuel production.

In light of the recent global climate agreement, the Paris Agreement, which came into force in November 2016, there is an urgent need to mobilise additional funds for environmentally sustainable investments and to direct financial flows from “brown”, that is, environmentally damaging, to “green” investment. Public officials, investors and the media have hailed green bonds as a key instrument for achieving both. But what are green bonds, and how realistic are assessments of their potential to contribute to financing sustainable development, notably by financing sustainable investments that would not be financed otherwise? Green bonds are debt instruments to finance environmentally sustainable investments. Although the green bond market began to grow only slowly after the onset of the global financial crisis in 2008, the market has seen explosive growth since 2014, with issuances in 2015 reaching USD 42 billion. Since the 2014 ”take-off”, the expectations with respect to the potential of green bonds have further increased. A number of factors make green bonds appealing for investors. Compared to other green instruments, green bonds are in many cases relatively simple, familiar fixed-income instruments. Moreover, many investors increasing­ly weigh the risks related to carbon-intensive investments when designing investment portfolios. Green bonds are also attractive for groups of investors who wish to make an environmental impact. Finally, in particular the green bonds issued by international financial institutions or large corporations usually have enough scale to be attractive to institutional investors. There are, however, also a number of challenges in relation to green bonds. These include: first, deficiencies of the governance framework of the green bond market; second, the significant costs associated with labelling a bond “green”; and third, the weakly developed pipeline for green projects in which the proceeds from the bonds could be invested. In the context of developing and emerging countries, green bonds face additional limitations. In particular, weakly developed capital markets and low credit ratings for potential green bond issuers pose obstacles to the issuance of green bonds. Moreover, green bonds have rarely been issued to mobilise additional climate finance. An important way to address these challenges and to realise the potential of green bonds to finance sustainable development is the design of an appropriate governance framework. Only then can the green bond market mature with integrity. An improved governance framework should be based upon a clear and ambitious definition of green bonds and include regular reporting, monitoring and evaluation of the compliance with standards, going beyond industry self-regulation. It will also be important to take measures to enhance the inclusiveness of governance and to share information among various stakeholders. Governments and multilateral development banks (MDBs) may play an important role in deepening bond markets by reducing the costs of issuance, which is an important precondition for the ability of green bonds to mobilise additional financing. Each of these measures will help to increase confidence in the green bond market. Without such confidence, it will be difficult for green bonds to meet the expectation to mobilise additional funds for environmentally sustainable investments and to direct financial flows from brown to green investments.

The year 2015 seems to have been an historic turning point in combatting climate change. Not only did the world agree on the first universal climate agreement, but the United Nations established the Agenda 2030 for Sustainable Development. Implementing the Paris commitment means limiting global warming to below 2°, striving even for 1.5°. In practice, this implies the radical decarbonisation of our economies, which entails fundamental changes in the financial world towards what has been termed “green finance”.
Green finance represents a positive shift in the global economy’s transition to sustainability through the financing of public and private green investments and public policies that support green initiatives. Two main tasks of green finance are to internalise environmental externalities and to reduce risk perceptions in order to encourage investments that provide environmental benefits.
The major actors driving the development of green finance include banks, institutional investors and international financial institutions as well as central banks and financial regulators. Some of these actors implement policy and regulatory measures for different asset classes to support the greening of the financial system, such as priority-lending requirements, below-market-rate finance via interest-rate subsidies or preferential central bank refinancing opportunities.
Although estimations of the actual financing needs for green investments vary significantly between different sources, public budgets will fall far short of the required funding. For this reason, a large amount of private capital is needed.
However, mobilising capital for green investments has been limited due to several microeconomic challenges such as problems in internalising environmental externalities, information asymmetry, inadequate analytical capacity and lack of clarity in the definition of “green”. There are maturity mismatches between long-term green investments and the relatively short-term time horizons of savers and – even more important – investors. In addition, financial and environmental policy approaches have often not been coordinated. Moreover, many governments do not clearly signal how and to what extent they promote the green transition.
In order to increase the flow of private capital for green investment, the following measures are crucial. First, it is necessary to design an enabling environment facilitating green finance, including the business climate, rule of law and investment regime. Second, the definition of green finance needs to be more transparent. Third, standards and rules for disclosure would promote developing green finance assets. For all asset classes – bank credits, bonds and secured assets – voluntary principles and guidelines for green finance need to be implemented and monitored. Fourth, because voluntary guidelines may not be sufficient, they need to be complemented by financial and regulatory incentives. Fifth, financial and environmental policies as well as regulatory policies should be better coordinated, as has happened in China.

Private investments in climate-change adaptation are important. First, because the costs of adaptation are too high to be met by the public sector alone. And second, developed countries pledged to mobilise USD 100 billion annually by 2020 to support developing countries’ climate change mitigation and adaptation; the private sector is described as a source of finance. Yet how realistic is it to rely on the mobilisation of private investments in adaptation, in particular for less developed countries? This Policy Brief aims to answer this question in relation to Kenya. It is based on interviews and an analytical framework that spells out enabling environments; mobilisation and delivery of private investments (see Figure 1).
As a first step, developing and developed countries, and the private sector can create enabling environments to mobilise private investments in adaptation. Adaptation is a priority to both the Kenyan government and its development partners. However, private adaptation has not been mainstreamed in key government policies. The Kenyan private sector appears unfamiliar with the concept of adaptation. Where it acts on adaptation, its purpose is generally resource efficiency or to address land degradation.
This makes it hard to track mobilised private investments. For example, rural communities might contribute to adaptation though improved water management. However, related expenditure remains unknown, as is the extent to which it is financed by banks. Neither actor tracks or reports investments in adaptation.
It is even harder to assess if private investments, once mobilised, actually deliver on adaptation. Regardless of the underlying motivations, many investments that reduce poverty or stimulate sustainable resource use contribute to adaptation. However, a private actor can also adapt at the expense of communities, for example by securing or fencing off its own water intake. There are no explicit checks and balances on private-sector impacts on adapta¬tion. Safeguards such as environmental impact assessments (EIAs) do not explicitly address adaptation.
All of the above make it extremely difficult to assess private investments in adaptation in Kenya, in particular in the context of the above-mentioned USD 100 billion target. Kenya's private sector has taken little interest in the UN climate negotiations. It is currently not able to tap into international funds such as the Green Climate Fund. If it could, private actors might take more interest in adaptation and the UN negotiations. This in turn might also provide incentives for quantifying investments in adaptation.
The Kenyan government could encourage more private-sector investments in adaptation. By stimulating a shared public-private awareness and understanding of adaptation, the government could improve enabling environments for private adaptation; mobilise more private investments; and improve the tracking of private investments in adaptation. Moreover, the government and development partners could include adaptation criteria in project selection and EIAs in order to reduce private maladaptation and increase private adaptation.

In 2015 the global community committed itself to an ambitious programme of reform. Achieving the Sustainable Development Goals and implementing the resolutions of the Paris climate conference require that great efforts are made – including those of a financial nature. Many states will have to ensure that untapped or barely used sources of income are developed.
Sub-national units such as provinces, departments, districts, and cities will play an increasing role in the mobilisation of public revenues. They are also in the forefront with regard to realisation of the global reform agenda, as many of the objectives concern classic areas of activity of local government: schools, basic medical care, local road construction, public transport, construction of social housing, the supply of drinking water and disposal of waste water, refuse collection etc. These services are already the responsibility or co-responsibility of sub-national units.
The mobilisation of revenues at sub-national level is therefore not only a financial necessity, it is also prudent from a development policy perspective: if the users and funders of a good match, there is a greater likelihood that the preferences of citizens will be observed and the use of funds monitored. In addition, local taxes and levies are often paid by a broad circle of citizens and companies. This serves to strengthen the relationship between governments and the governed.
One thing should be clear in this: although many countries will exploit the scope for collecting local taxes and levies in the future, this potential is nevertheless limited. Many sub-national units will remain dependent on transfer payments from the central state. Cities, districts and the middle tier cannot solve the funding problem of the states on their own. However, they can help to place the provision of public services on a broader foundation of legitimacy and, in co-operation with the national level – for example via the exchange of information – improve fiscal policy as a whole. Consequently, they also contribute to overcoming problems of fragile statehood.

The 2030 Agenda for Sustainable Development challenges domestic and international actors. The Sustainable Development Goals (SDGs) represent a multidimensional approach to development and are consequently aimed at all countries. To ensure SDG-sensitive cooperation it is not only necessary to adapt the allocation of official development assistance (ODA) to the requirements of the agenda, but also to reinforce the role of development cooperation in international cooperation. However, there is a lack of clear guidelines for adaptation and reform.
Using five strategic questions of donor decision making, the objective is to illustrate what SDG-sensitive development cooperation includes. The reform potential of the 2030 Agenda and the effectiveness of ODA giving are significantly dependent on the ability of donors to adjust their cooperation criteria, mechanisms and instruments towards the aims of the agenda. They should focus to a greater extent on the priorities of partners and the global common good, to co-ordinate themselves and focus on their comparative advantages. The goal is to establish development policy as an instrument to achieve policy coherence and reinforce the high development-relevant standards of the 2030 Agenda as underlying principles for international cooperation in all policy fields.
The following recommendations for SDG-sensitive development cooperation can be derived from the 2030 Agenda:

1. Allocation channel: Global public goods are central to the realisation of the 2030 Agenda. Therefore, the multilateral channel should be strengthened.
2. Country selection: SDG-sensitive ODA allocation is based on the division of labour amongst donors and supports particularly under-developed countries in the realisation of the agenda. In cooperation with emerging countries it strengthens their international responsibility and the reduction of inequalities between and within countries.
3. Sector selection: SDG-sensitive sector selection requires strategic coordination and the reliable division of labour amongst donors. This enables donors’ profile formation and broad national support for the agenda. However, country-specific cooperation with each partner is also central.
4. Instruments: An SDG-sensitive instrument-mix is adapted to the conditions of the partner country and makes increased use of local systems. Evidence-based and flexible instruments contribute significantly to this.
5. ODA as catalyst: ODA can only be catalytic if the 2030 Agenda is realised, with the creation of development-relevant standards and regulations that enable the mobilisation of national, public and private investment.

These recommendations require further systematic analysis to enable learning processes and design development cooperation adaptively. The objective should be an evidence-based policy that reacts to changing conditions and is transparent and aware of its responsibility.

The public perception of the situation of refugees differs from the facts in two key aspects: the overwhelming majority of refugees stay in poor neighbouring countries adjoining their place of origin (86 percent) and they stay there a very long time (17 years on average). Although this has been known for a considerable time, these host countries frequently receive no support and refugees have scarcely any opportunity to establish themselves permanently and integrate into their host communities. As a consequence, thought is increasingly being paid to replacing the typical refugee camps - which are primarily designed for the provision of emergency support for refugees – with longer term approaches in refugee policy.
One example of a successfully integrative refugee policy – and therefore a possible role model for other countries – is that of Uganda. Since 1999 the Ugandan government has pursued an approach of local social and economic integration of refugees. They receive land, are permitted to work and are thus intended to become independent of assistance. This liberal policy is also of benefit to the native population: the enhanced economic dynamic in areas in which many refugees live leads to higher consumption and improved access to public infrastructure for people in neighbouring villages. In particular, they are also able to use the schools and health clinics operated by the aid organisations.
However, the subjective perception of the local population does not reflect these positive developments: they view their economic situation as poorer than people in other areas of Uganda. Local conflicts over land flare up frequently and there are indications that the Ugandan government spends less on the operation of health clinics and the support of poor people in districts with a high refugee presence. Although the government and the aid organisations strive to ensure that none of the groups is worse off than the other and to dismantle prejudices through encounters, the (perceived) competition for resources endures.
The Ugandan experiences and challenges in the support of refugees in Kenya and Jordan underscore the major potential of an integrative refugee policy. The local population can benefit from this and costs are saved in the support of refugees. Four recommendations can be drawn from the analysis for host countries that house large numbers of refugees:

• Building settlements instead of camps and giving refugees the right to work results in an economic dynamism that also benefits the local population in the region.
• This requires good co-ordination between national government and international donors, for example with regard to public services and the allocation of funding.
• To avoid conflicts between refugees and the local population, it is advisable to inform the native citizens of the advantages and encourage interaction between the two groups.

Particular consideration should be given to poor population groups, who should not be disadvantaged by the presence of the refugees. Aid payments should be considered where appropriate.

United Nations (UN) member states and the UN development system (UNDS) are in a familiar bind: They have problems that they’ve always wanted to set right but never found the energy for, and as the problems grow, so does the challenge of correcting the wrongs. For decades, member states have discussed the need to establish a system-wide executive authority at the top of the UNDS to keep it functioning. The new “2030 Agenda for Sustainable Development” makes considering this option more urgent than ever, and the current reform process presents an opportunity to finally make the UNDS “fit for purpose”.
The need to reform and in some way integrate the UNDS is little disputed by member states or experts. With its 34 funds, programmes, specialized agencies and other entities, 1,432 country offices, no effective system-wide coordination and rising levels of earmarked contributions, the UNDS is on an unsustainable trend of fragmentation and “bilateralization” (that is, donors contracting UNDS entities to implement their priorities, marginalising the multilateral framework). In its current form, the UNDS can hardly be expected to play a significant role in the collective effort to transform our world. For this, the UNDS must provide integrated development solutions, acting as one. It must become more efficient, effective and professional. And it must ensure multilateral functions such as the provision of objective knowledge, coordination, long-term orientation and intellectual leadership.
A system-wide executive authority is needed to run the UNDS. The core functions of such an executive authority would be to administer the Resident Coordinator system, draft and monitor a system-wide framework and corresponding financial overview, and act as the “brain” of the UNDS. How could this be implemented? This paper suggests that instead of adding new structures, the existing coordination forum of the UN Development Group (UNDG) should be separated from the UN Development Programme (UNDP) and re-organized as the executive authority:

• The position of the UNDG Chair should be transformed into the "High Commissioner for Sustainable Development (HCSD)”, heading the new executive authority.
• The Development Operations Coordination Office (DOCO) should form the nucleus of the new executive authority’s secretariat and draw additional units and staff from the UNDS.
• Funding should continue to be provided through the UNDG cost-sharing agreement, which should be significantly expanded.
• UNDS members of the Chief Executives Board (CEB) should make up the new executive authority’s board of directors, with the HCSD representing the UNDS in the CEB.
• The specialized agencies should be become quasi-equal members of the UNDS, subject to the same coordination as the funds and programmes, but on the basis of an opt-out mechanism.

Such an executive authority would arguably enhance UNDS performance more than any other reform, with initial costs compensated by increased efficiency. It would amount to an urgently needed investment in higher quality operational activities, winning back the trust of donors and recipients.

Although Thailand and India are two of the world’s largest producers and exporters of fruits and vegetables, both countries suffer from severe food-safety and quality problems with its domestic and export-oriented produce. According to the United Nations Conference on Trade and Development, the two countries are consistently listed in the EU and US 2002–2010 agrifood rejections category, pointing to inadequate compliance – or lack thereof – with international standards, alluding to the low degree of implementation of good agricultural practices (GAP) nationwide. Both countries are aware that, in order to increase food safety and quality domestically and internationally, voluntary GAP standards are key. However, compliance is costly and can threaten the existence of small and poor farmers and value-chain operators in particular. Thus, standards and their implementation require careful consideration. However, among the host of food-safety and quality standards in existence, which ones are most relevant?
In this Briefing Paper, we distinguish between Level 1 GAP standards for high-value export markets and Level 2 local GAP standards for domestic markets and lower-value export markets. We provide an overview of the opportunities and challenges of implementing different levels of standards and use the “Five Rural Worlds” (5RWs) model of the Organisation for Economic Co-operation and Development (OECD) to demonstrate how standards impact and address the specific challenges of different types of agricultural producers. The primary findings of this analysis are as follows:

• Level 1 GAP standards, such as the collective pre-farm gate standard GlobalGAP, are the most challenging to comply with and can only be adopted by a minority of producers belonging to RWs 1 and 2. Although voluntary, Level 1 standards, which are required by major supermarkets and retailers worldwide, are de facto becoming increasingly mandatory to supply high-value markets.

• Level 2 GAP standards are local voluntary standards (e.g. ThaiGAP, IndiaGAP) introduced with the aim of im¬proving the level of food safety in domestic supply chains and to allow gradual upgrading to Level 1 standards. Level 2 standards are easier to comply with and could benefit the many traditional and subsistence agricultural households in RWs 2 and 3. In Thailand and India, parallel initiatives by the public and private sectors have led to two co-existing and overlapping local GAP standards.

Food safety will continue to remain an issue if GAP principles are not adopted on a large scale. Due to the complexity of standard requirements and the high costs of compliance, Level 1 standards are not an option for the majority of farmers in developing countries in the near future. Level 2 standards are more promising, but our case studies have shown that, if introduced by public actors, they tend to lack credibility due to a lack of capacity and resources. It is simply not possible for governments to certify millions of smallholders and to monitor continuous compliance as long as certification is not demanded and supported by the private sector. We encourage public and private actors to cooperate in harmonising standards and to jointly support smallholders in obtaining certification through institutional arrangements, extension programmes and media campaigns. Moreover, we recommend that governments focus on the implementation of GAP principles and improving quality infrastructure rather than focus on certification per se.

To discuss and plan overall development as well as specific interventions in rural areas of developing countries, it is important to have a comprehensive conceptual model at hand that facilitates communication across sectors involved and which allows generalisations across countries. It should be able to simultaneously bring poverty, economic growth and structural change into focus.
This paper presents a conceptual model that can serve these purposes. It builds on the “Five Rural Worlds” (5RWs) model of the Organisation for Economic Co-operation and Development (OECD). It centres on rural populations and classifies them based on a pragmatic, multi-criteria analysis of basic assets and endowments, competitiveness and growth opportunities, and needs, in particular with regards to poverty and food security. The Rural Worlds (RWs) distinguished are 1) large-scale commercial agricultural households and enterprises, 2) traditional landholders and enterprises, 3) subsistence agricultural households and micro-enterprises, 4) landless rural households and micro-enterprises and 5) chronically poor rural households (without family labour force). These distinctions may be crude and blurred, but they are sufficient in many instances to clarify basic assumptions. Being simple enough, they facilitate fundamental and inter-sectoral debates about policy interventions in rural areas.
We extend the OECD model to explicitly include interactions between the RWs as well as between these and the outside world. These extensions have been made to highlight the fact that rural areas are increasingly being integrated into national and wider relations, and to allow these relations and their implications to be discussed comprehensively.
This modified RW concept has several advantages:

• It classifies the rural population into a limited number of ubiquitous groupings according to major, common constraints, needs and opportunities.
• It highlights the importance of land and agricultural technology/productivity as key starting points for pov¬erty, food security and growth opportunities, without excluding the possibility of other livelihood options.
• It focusses on the rural poor and considers their heterogeneous potential to strive within and/or outside agriculture, in particular distinguishing the landless and chronically poor, who are often left out (or even damaged) by agricultural interventions.
• It invites thinking about not only the direct effects of policy interventions on different target groups individually, but also about systematically checking indirect second-round effects through the interaction channels.
• It reminds us of the growing relations between a given rural area and the rest of the world.

We advocate the 5RW concept for the inter-sectoral planning of rural development in developing countries, and for multi-sectoral research, in particular in rural sub-Sahara Africa (SSA). We acknowledge that, in addition, a gender and an environmental perspective must be explicitly taken into account, too, which is, however, easily compatible with the model.

One of the priorities of the international community is alleviating food insecurity, as stated in Goal 2 of the recently approved 2030 Agenda: "End hunger, achieve food security and improved nutrition and promote sustainable agriculture". The region with the highest prevalence of food insecurity is sub-Saharan Africa (SSA); most of the efforts must be concentrated there. Food insecurity is mostly widespread among rural households who have either no land or only small plots, and who live in conditions of extreme poverty. Traditional agricultural/ economic interventions alone are unlikely to generate substantial improvements, as they are rarely specifically targeted to the poor. Yet social protection schemes, in particular the emerging cash transfers (CTs), have great potential. Evidence shows, however, that while these measures effectively expand food consumption and asset accumulation, thereby increasing households’ resilience, CTs must be linked to other interventions in order to sustainably graduate households out of food insecurity. What lessons can we learn from the empirical evidence in the region? ·     CTs have proven to be an effective tool for increasing households' calorie intake. Therefore, policy-makers should use them, particularly in this region. ·     International organizations, bilateral donors and national policy-makers should pay attention to four major design features of CT programmes: 1.   Targeting: Some CTs do not reach the expected population and therefore have little effect on food security. CTs can use different targeting mechanisms: There is no one-size-fits-all solution. 2.   Regularity of payments: Cash disbursements must be regular so that households can plan. Wherever several delays were experienced, the CTs were ineffective. 3.   Transfer size: Monetary transfers should be at least equal to 20% of consumption by the poor. No positive benefits in terms of food security were detected when the amount of the transfer was below this threshold. However, CTs should not be large enough to increase social inequality and discourage work. 4.   Political support: To ensure positive long-term effects and for beneficiaries to perceive them as regular programmes, CTs must be backed by strong political support. In SSA, programme ownership is often missing. ·     CTs alone cannot positively impact nutrition knowledge and nutrition/hygienic practices, and have been shown to have limited effects on diet and nutrition. In order for CTs to have long-lasting effects on nutrition, they must be complemented by other interventions such as nutrition education, food supplementation for vulnerable groups and specific economic policies. Ethiopia’s Productive Safety Net Programme (PSNP) offers an innovative model for connecting these policies. ·     Although it is not generally advisable to condition CTs to beneficiaries’ fulfilment of certain requirements, introducing soft conditions that link attendance at nutrition education courses to receiving CTs should be considered in SSA because they do not cost much or require large monitoring capacities.

There is no getting away from it: wood is, and will remain crucial for meeting global energy demands, in particular those of the poor. Although wood provides ‘only’ about 10% of total global primary energy, it is the most important source of energy in many parts of the developing world. Around 2.8 billion people worldwide consume wood-based fuels on a daily basis. In sub-Saharan Africa (SSA), 70% of households depend on wood energy. In several SSA countries, it makes up to 90% of household energy mix, and represents up to 3.5% of gross domestic product (GDP).
As for the current trends in population growth in SSA, the amount of wood energy consumed is likely to increase in future. Even with very optimistic assumptions about renewable energy development, in 2030 wood-based energy will still be two-thirds of what it is today. Charcoal will remain the main energy source of the urban population.
As they are the central component of SSA’s household energy mix, production and trade of wood energy have far-reaching social, economic and environmental repercussions. Many of the poor earn a living in firewood and charcoal value chains. Charcoal has been called an “engine of pro-poor economic growth” (Van der Plas & Abdel-Hamid, 2005, p. 297). However, typically uncontrolled wood extraction has made wood energy an important force of forest and biodiversity degradation. Moreover health is threatened by traditional use, particularly of firewood.
Many of the attempts in the past to control the wood energy sector have been short-sighted, top-down, and have failed. Most energy policies in SSA largely ignore the potential of wood energy as a source of reliable, storable, renewable and sustainable energy, and as the main and unavoidable energy supplier of the future. This must change!
This policy brief first outlines the typical wood energy value chains in SSA, while scrutinizing unsustainable practices in every segment of the value chain. It then sketches previous, often unsuccessful interventions to manage the sector and replace wood energy. It highlights the key role of location in shaping efforts to manage the sector. Subsequently, it provides condensed policy recommendations.
The primary findings of this analysis are the following:

• There is a strong case for pro-actively supporting the emergence of a sustainable wood energy sector. Wood energy must be recognized as an inter-sectoral issue, connected to forestry, energy, agriculture and land.
• Although new technologies to reduce wood and energy waste are important, governance issues remain key to attempts to manage wood fuel value chains.
• Previous attempts to upgrade the wood fuel value chains have been too narrow and have relied too strongly on technology and/or central state regulation and have not been able to control the sector under SSA conditions. In particular, relying on top-down prohibition, certification and central state control has disregarded the role of weak implementation capacities, local realities (informal community rules, power imbalances) and corruption in circumventing such measures.

For future approaches to be successful, they need to target the multi-level nature of the wood energy sector and provide more comprehensive and location-specific interventions.

Despite increased conservation efforts, biodiversity contin¬ues to decline, while international targets to conserve biodiversity remain out of reach. Mobilising financial resources for conservation investments is considered crucial to addressing the direct and indirect drivers of biodiversity loss and to setting incentives for conserving biodiversity. Aid is, and will likely continue to be, the main source of funding biodiversity conservation in developing countries. Mobilising domestic funds still presents a challenge to many develop¬ing countries although some domestic budgets for bio¬diversity show upward trends. Donor countries have repeated¬ly committed to increasing funds to support con¬servation measures in developing countries but the modest achievements of international conservation efforts have created doubts with regard to its effectiveness.
However, research shows that aid can play a crucial role in biodiversity conservation in developing countries. Having said that, aid needs to be better aligned with biodiversity strategies and to aim at mainstreaming.
The main messages of this Briefing Paper are as follows:

• The trend of increased biodiversity aid must continue to address the funding gap, in particular in underfunded biodiversity-rich countries. According to estimations, between USD 150 billion and USD 440 billion per year is needed to conserve biodiversity. Biodiversity-rich countries in particular are significantly underfunded and face high biodiversity loss rates. In these countries, domestic budgets are not sufficient by far; hence biodiversity aid needs to be increased. Besides aid, financial resources from other sources (e.g. domestic, private) also need to be mobilised.

• Biodiversity aid must support the implementation of national biodiversity strategies, implementing the objectives of the Convention on Biological Diversity (CBD), and must foster the mainstreaming of biodiversity considerations into other sectors (e.g. agriculture, trade). Biodiversity strategies and the mainstreaming of biodiversity considerations are seen as key instruments in fostering biodiversity conservation. Increases in aid marked as targeting biodiversity as a “significant” objective (meaning prime objectives other than biodiversity conservation) indicate that biodiversity has been increasingly mainstreamed.

• The effectiveness of biodiversity aid must be improved. To better assess the effectiveness of bio-diversity-related aid, an adequate quantification of needs (i. e. frequent and consistent assessment of the biodiversity status across countries) and expenditures (i. e. comprehensive tracking of biodiversity funding with a consistent methodology) is required.

The controversial Economic Partnership Agreements (EPAs) are currently back on the agenda, as several African, Caribbean and Pacific (ACP) states are again faced with a loss of market access if they do not ratify their EPAs by 1 October 2016. To complicate matters, Brexit has introduced an element of uncertainty and is causing some ACP states to reconsider their decision to sign EPAs.
EPAs were introduced under the trade pillar of the Cotonou Partnership Agreement (CPA), which governs relations between the European Union (EU) and the ACP. EPAs represent a sea change in trade relations between the EU and the ACP: not only do they introduce reciprocity into trade preferences, they are organized on a regional basis, with the aim of promoting regional integration within the ACP. This Briefing Paper presents an update of the various EPA processes, and investigates the extent to which they have actually met the EU’s stated aim of promoting regionalism in the ACP, as well as the EPAs alignment with the Sustainable Development Goals (SDGs), and the debate on the future of EU-ACP cooperation.
EPAs have been only partially effective in facilitating regional integration in the ACP. EPA negotiations have resulted in the conclusion of region-wide deals that align with existing integration initiatives in only three regions: the Caribbean, the East African Community (EAC), and West Africa. EPAs have acted as a ‘mid-wife’ to deeper integration in these regions, however it is a possibility that the EAC and West African EPAs will not be signed by the October deadline.
In the remaining regions – the Pacific, Central Africa, Eastern and Southern Africa (ESA), and the Southern African Development Community (SADC) – EPAs have made future prospects for regional integration more difficult, and in some cases may have contributed to a ‘lock-in’ of fragmented regionalism.
Part of the reason for this mixed record is tension between the CPA’s principles of ‘regionalization’, which recognizes the importance of regional integration for development; and ‘differentiation’, which advocates treating states differently based on their level of development. EPAs aimed to encourage groups of states to sign the agreements as regional blocs, but the EU’s Everything But Arms (EBA) regime undermines regional EPAs by offering Least Developed Countries (LDCs) non-reciprocal trade preferences. This splits ACP regions into LDCs versus non-LDCs, making it difficult to conclude regional EPAs.
Given the ongoing struggle to conclude regional EPAs, and the uncertainty of Brexit, the EU should consider extending the 1 October deadline, to allow ACP states more time to consider their positions and work on further harmonising regional relations.
As regional integration is key for the economic development of ACP states, future cooperation should be aware of the need for alignment of EPAs, the SDGs, and the goal of regional integration.

Civil wars and other armed conflicts within states kill tens of thousands of civilians every year, destroy many more livelihoods and have forced millions of people to flee their homes over the last five years alone. For many years since the mid-1990s, armed intrastate conflicts seemed to be steadily receding, but this trend has reversed itself since 2013. For populations affected by civil war, 2014 – the year for which the most recent data is available – was deadlier than any year since the Rwandan genocide in 1994.
Most violent conflicts today are recurrences of previous wars. Thus, besides ending ongoing violence, preventing wars from breaking out again is one of the major challenges the world faces today. Since the 1990s, this has been the exact objective of peacebuilding activities. But how successful are efforts to stabilise peace after armed conflict really? And what can be done to make them more effective?
Summarising a broad range of empirical research on post-conflict peace support, this briefing paper reports which types of external engagement are known to be effective, and which ones are not. International peacebuilding efforts focus mainly on four issue areas: providing security, (re-)starting socio-economic development, advancing democratic governance and promoting transitional justice. Assessing the evidence available in each area, three messages for external actors who wish to support peace in post-conflict environments emerge most clearly.

• First, international peacekeeping missions are in many cases an effective instrument for stabilising peace after civil war, indicating that the immediate security concerns of affected populations is of utmost importance. Yet, security alone is not enough. Peacekeeping is all the more successful when it is embedded in a multidimensional approach, supporting the notion that political, economic and social concerns also need to be addressed early on if peace is to last.
• Second, supporters of disarmament, demobilisation and reintegration programmes and security sector reforms need to embrace the political character of these processes. Approaching them merely as technical issues – as outside actors often do – and turning a blind eye to the vested interests involved risks fuelling new conflicts instead of preventing them.
• Third, transitional justice is an important area of post-conflict peace consolidation – but only if it meets the interest and support of key stakeholders in the affected population: in parliament, in government and administration, and in civil society.

One-size-fits-all strategies for how to support sustainable peace after civil wars do not exist. Different types of conflicts obviously require different pathways to peace. One direction of future research should be a more systematic analysis of post-conflict contexts that are similar enough to call for similar strategies of peace support.

Since the first meeting of the G20 at the leaders’ level in Washington in November 2008, trade has been an integral part of their agenda. This first meeting took place at the peak of the global financial and economic crisis, which led to a strong contraction of world trade. Remembering the global economic crisis after 1929 and the following wave of protectionist measures, the G20 countries made the commitment to not erect new trade and investment barriers. In addition, the verbal commitment to the conclusion of the Doha Development Agenda – the current round of multilateral negotiations under the auspices of the World Trade Organization (WTO) – has been part of the standard repertoire of G20 summit declarations.
Yet, since the last ministerial meeting of the WTO in Nairobi in December 2015, the future of the Doha Round is more uncertain than ever before. Important member states, notably the United States, declared themselves in favour of terminating the Doha Round, whereas many emerging and developing countries insist on its continuation.
Dissatisfied with the slow progress of the Doha Round, the major trading powers – first of all the United States and the European Union (EU) – are increasingly focussing on negotiating bilateral or regional trade agreements. Agreements such as the Trans-Pacific Partnership (TPP), which was signed on 4 February 2016 by the United States, Japan and 10 other Pacific countries, and the Transatlantic Trade and Investment Partnership (TTIP), which is currently under negotiation between the United States and the EU, cover large shares of global trade and investment flows and aim at regulating issues that go beyond the elimination of tariffs, such as investment, standards and the environment.
At the same time, the main trading powers are promoting so-called plurilateral agreements that focus on specific topics. The most prominent example is the Trade in Services Agreement (TiSA), which is negotiated outside the WTO. We argue that the role of the WTO as the central organisation for the governance of world trade is weakened by this wave of mega-regional and plurilateral trade deals.
Until now, reforms of the world trading system have only played a subordinate role at the G20 summits. The summit declarations contain only vaguely drafted commitments to strengthen the multilateral trading system, or commitments that bilateral, regional and plurilateral trade agreements should be complementary and in conformity with the rules of the WTO.
We argue that the G20 should assume a more proactive role with regard to the future of the WTO and the reform of the world trading system. Such a reform is needed in light of the growing fragmentation of the system. At the same time, the 2030 Agenda for Sustainable Development of the United Nations calls for sustainability to be the core principle of global cooperation, including in the context of international trade. Among other things, the 2030 Agenda calls for “a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization”. Bridging the gap between the realities of the international trading system and the aspirations of the 2030 Agenda is a formidable challenge that cannot be tackled effectively either in the context of the WTO or the UN and the 2030 Agenda alone. The G20 is a suitable forum to bridge that gap.

Eight years after its formation at the leaders’ level, the Group of 20 (G20) has consolidated its status as the power centre of global economic governance. The informal club of 19 nation-states plus the European Union has set itself ambitious goals. They want to lead the global economy towards “strong, sustainable and balanced growth”. Opinions on the success and the broader implications of the G20 diverge widely in global conversations (Bradford & Lim, 2011). Critical voices point to the fundamental lack of legitimacy for the self-selected group of global powers. Other sceptics call into question the effectiveness of the G20 in balancing national interests and managing the world economy. In a more positive assessment, the G20 is given credit for moderating trade conflicts and averting currency wars. Sympathisers also acknowledge the G20’s role in nudging the global system towards a post-Western constellation by integrating large (re-)emerging economies beyond the Organisation for Economic Co-operation and Development (OECD).
Clearly, the G20 is not mandated, nor does it operate under the guidance of the United Nations (UN), the universal body of ultimate legitimacy. Looking at the G20 from the perspective of effective global governance, the big question to ask is: Do member states see their group as a concert of great powers or are they ready to act as guardians of global well-being? The latter would imply that the G20 anchors its entire work in three transformational documents adopted by world leaders last year at the UN: the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda and the Paris Climate Agreement.
The G20 at the leaders’ level has come about in response to the severe financial disorder of 2008. It adopted the membership formula of the G20 of finance ministers, which was set up by governments from all parts of the world in 1999 with a similar intent of crisis management (regarding the Asian financial crisis of that time). The 19 member countries plus the European Union represent a diverse cosmos of old and new economic powerhouses, selected more on the economic exigencies of the outgoing 20th century than on the basis of criteria that would reflect representativeness and the preparedness to live up to international responsibilities. While Europe is strongly represented, other regions lack adequate inclusion. From Sub-Sahara Africa, only South Africa was selected, and Saudi Arabia is the sole member from the Arab world (Fues & Wolff, 2010).
The strengths, as well as weaknesses, of the G20 lie in its informality and flexibility. The group has no legal status, no charter and no permanent secretariat. It is driven by annual summits, which are hosted by yearly rotating presidencies. Two parallel tracks – under the guidance of sherpas and finance ministers, respectively – structure the process (see Box 1). Over time, the G20 has established a myriad of working groups and work streams, such as on infrastructure, development, employment and trade. As a result, the overall coherence of the G20 architecture leaves much to be desired (Dubey, 2015). The workload of attending to an ever-increasing number of policy fields stretches the capacities of most national bureaucracies to the limit.

“Our struggle for global sustainability will be lost or won in cities.” With these words Ban Ki-moon, Secretary-General of the United Nations, opened the High-Level Delegation of Mayors and Regional Authorities in New York City on 23 April 2012.
A little more than three years later, at the United Nations (UN) Summit in 2015, the 2030 Agenda for Sustainable Development was adopted. In the Agenda, 17 Sustainable Development Goals (SDGs) define the key areas and mech-anisms for a future global development partnership. One of these goals (SDG 11: “Make cities and human settlements inclusive, safe, resilient and sustainable”) distinctly alludes to urban development. The urban community has widely celebrated the adoption of this “stand-alone urban goal”. The step is perceived as reflecting an increased awareness of the important role of cities for global development pathways.
Although sharing in this positive assessment, this briefing paper ar¬gues that for an effective follow-up to Agenda 2030, issues of urban and local governance ought to be addressed in further detail and as cross-cutting issues. This applies to the “urban” SDG 11, which does not have a distinct target on (good) governance. It is also true for the “governance” goal, SDG 16, which, while referring to institutions “at all levels”, does not spell out local or urban responsibilities. And it is pertinent for many sectoral goals, such as SDGs 13 (action towards climate change) and 9 (build resilient infrastructure), both of which strongly hinge on local- or city-level implementation.
Against this background, the briefing paper identifies urban governance issues that are presently neglected in the SDGs and require further elaboration. This may occur in the process of the supplementary methodological work envisaged by the Inter-Agency and Expert Group on Sustainable Development Goal Indicators for the coming months (UN Economic and Social Council, 2016, p. 9).
Even more importantly, the task of concretising the urban governance dimension – and thereby easing SDG implementa-tion – must also be related to other global policy processes and events. Notably the New Urban Agenda (NUA), which is to be formulated at the 2016 World Conference on Housing and Sustainable Urban Development (Habitat III) in Quito, Ecuador, from 17–20 October 2016, can be considered a key vehicle in this regard.
Following are three decisive urban governance dimensions to be focussed on in the NUA:

1. Urban governance frameworks: Since urban governance is exercised at different governmental levels, defining the roles and responsibilities of – and coordination between – these levels is essential. Decisive elements are national urban policies among other institutional frameworks; multi-level and -sectoral cooperation and coordination mechanisms; and formal and informal linkages beyond city borders.
2. Intra-urban partnerships: Effective partnerships and co¬oper¬ative practices between local authorities, the private sector and civil society constitute the backbone of good urban governance. In particular, mechanisms and space for the participation of disadvantaged groups in collaboration and decision-making processes must be defined and the related capacities built.

Transformative urban governance: In order to effectively confront global challenges in the sense of truly transformative development, key elements of climate-friendly governance at the city level must be defined, relating to both mitigation and adaptation measures.

By 2022, two billion people will be living in informal settlements according to the United Nations. Although per capita energy consumption in informal settlements is comparatively low, the benefits of energy efficiency uptake – enhanced energy system sustainability, economic development, social development, environmental sustainability, and increased prosperity (International Energy Agency [IEA], 2014) – stand to equally benefit these communities. Yet despite these benefits, informal settlement households – as so many others – have been slow in taking up energy-efficient technologies. This can be partly attributed to behavioural barriers: Consumers often do not invest in energy efficiency in an economically rational manner. Recent research findings point to effective means of implementing behavioural insights for energy efficiency in informal settlements. Building upon this precedence, governments, international organisations and implementing agencies should en¬courage the application of potentially low-cost behavioural insights to energy efficiency initiatives in informal settlements to improve intervention efficacy. It is easy for energy efficiency to be lost in the challenging demands of daily life in informal settlements – sourcing water, managing irregular employment opportunities, or basic health and safety concerns, compounded by risk aversion and the discounting of future-based benefits. This is why it is essential to integrate behavioural insights to facilitate energy-efficiency uptake. This may be done, for example, by making information on energy efficiency simple and meaningful, by focussing on context-specific benefits, by bringing the economic benefit of uptake closer to the consumer while spacing the cost over time, or by appealing to social norms.
While most evidence on the importance of behavioural insights for energy efficiency stems from the OECD member country context, the topic is equally relevant in the developing country informal settlement context. Here, the cost-benefit analysis of energy efficiency is further complicated by the fact that many households informally consume electricity without paying for it or by paying a flat rate. This presumably removes the traditional pecuniary motivation – electrical bill savings – upon which to influence energy-efficiency implementation. What entry points then exist for energy-efficient products which invariably have a higher upfront purchase cost when there are – prima facie – no financial benefits to be realised? The higher durability of energy-efficient products in the context of the instable electricity supply occurring in many developing countries could be an obscured benefit. It accrues not just at the societal level but also at the individual level, further building the economic case for energy-efficiency uptake.

The European Union (EU) is in crisis mode. Its capacity to implement domestic reforms and its position as a global power are being severely undermined by centrifugal forces within Europe and the risk that the EU will disintegrate. Euroscepticism and populism abound; the reactions to the refugee crisis suggest that solidarity among member states is weak; the Euro crisis has exacerbated social tensions and economic power disparities throughout the continent; while persistent environmental problems such as the ongoing loss of biodiversity have no easy solutions.
Europe is in dire need of a new and positive narrative for its future development that resonates with European citizens and presents Europe as a constructive force for sustainable domestic and global development.
This is even more urgent in light of the increasingly blurred boundaries between domestic and external agendas. Europe’s sustainable development cannot be promoted nor its own interests protected in isolation from the EU’s response to the aspirations of emerging and developing countries and global public goods challenges. The refugee and migration crisis as well as the terrorist attacks in Paris show that the lack of sustainable development and peace in other parts of the world also threaten Europe at home. Moreover, because of the size of its market and its economy, Europe’s domestic development pathway considerably impacts both its external legitimacy and sustainable development in third countries, for better or worse.
The 2030 Agenda for Sustainable Development with its 17 Sustainable Development Goals (SDGs) puts the interdependence of domestic and external policy-making center stage. The 2030 Agenda is an action plan for people, planet, peace and prosperity that reflects core European values and interests: It is crucial for Europe and the rest of the world.
Given the scope and universal nature of the 2030 Agenda, its implementation requires a new quality of cooperation with greater inter-departmental work and whole-of-government approaches that encompass all dimensions of EU internal and external policies.
Linking the core ongoing European strategy processes – including the EU Global Strategy on Foreign and Security Policy (the EU Global Strategy) and the revision of the Europe 2020 Strategy (the New Approach beyond 2020) – to the 2030 Agenda can help to create more coherent policies. This could also address frictions and trade-offs between individual policy fields. Progress on the SDGs in Europe and abroad will foster the success of both domestic and foreign policies.
We recommend that

• EU heads of state and government jointly commit to implementing the 2030 Agenda across internal and external fields of action ahead of the UN High-level Political Forum on Sustainable Development scheduled for July 2016,
• the New Approach beyond 2020 and the EU Global Strategy should serve as umbrella documents for domestic and external  implementation of the 2030 Agenda, linking both dimensions under the leadership of Vice-Presidents Timmermans and Mogherini.