Holland top Committed environmental donors, the USA at the bottom!

It is this time of year again where we, as developing countries will set back and take a look at the most committed donors to sustainable development, and who doesn't show much care.

The United States of America is not in short supply for negative assessments nowadays, and yet is has fallen to the bottom rank of environmentally-comittted donors in this years Committment to Development Index. The Index, produced annually by the Center for Global Development, an independent Washington research and policy organization, ranks 21 high-income industrialized countries on how well their policies and actions support poor countries’ efforts to build prosperity, good government, and security. The scoring adjusts for size, leveling the playing field for large and small nations.

The environment component is one of seven policy areas that comprise the CDI. The other Index components are aid, trade, investment, migration, security, and technology.

The Netherlands comes in first on the 2007 CDI on the strength of ample aid-giving, falling greenhouse gas emissions, and support for investment in developing countries. Close behind are three more big aid donors, Denmark, Sweden, and Norway. Australia, Canada, and New Zealand are among those tying for fifth. They have a very different profile: generally low on aid but strong on trade, investment, migration, and security.

Overall standings in the Index were little changed from last year, because countries policies and practices towards development tend to change slowly.

On the environment component, the Index penalizes fishing subsidies, tropical timber imports, imports of endangered species, higher per capita CO2 emissions, and low gasoline taxes (which encourage consumption, thereby raising emissions and hastening global warming.)

“The environment component of the CDI dramatically exposes the disaster of US environmental policies when compared to other rich countries”, said CGD research fellow David Roodman, who is the architect of the CDI. “The US can do much better. It has the money, technology, and entrepreneurial flare to be a global environmental leader.”

According to the 2007 Index results newly released on the CGD website, Norway tops this year’s environment standings, displacing U.K. as the frontrunner. Norway’s net greenhouse gas emissions fell during 1995–2005, the last ten years for which data are available, thanks to steady forest expansion, which absorbs carbon dioxide. Second place Ireland scores high in part because its economy has grown 6.6 percent per year faster than its greenhouse gas emissions. The U.K., which has steadily increased gasoline taxes and supported wind and other renewable energy sources, continues to perform well, coming fourth this year, the best showing of any major economy.

The U.S. comes in last due partly to its extremely high greenhouse gas emissions per capita (21.7 tons of carbon dioxide equivalent per person, the third worst after Canada and Australia), and the lowest gasoline taxes of all 21 countries in the Index. Although low gasoline prices are popular, they make driving seem falsely cheap by hiding the costs of global warming, most of which will be borne by poor countries. The U.S. also loses points for its failure to ratify the Kyoto Protocol, the most serious international effort to deal with climate change.

CGD president Nancy Birdsall said that she hoped that the poor U.S. showing on the CDI’s environment component would serve as a wake-up call, especially to policymakers in Washington. “There is a growing body of evidence that developing countries will suffer first and worst from climate change,” she said. “Americans aren’t accustomed to being the bad guys, and there is growing public pressure domestically for action on climate change. I hope by next year the U.S. will have moved up in these rankings.”

A recent report by William Cline, a senior fellow at CGD and the Peterson Institute of International Economics, found that developing countries will suffer an average 10 to 25 percent decline in agricultural productivity by the 2080s, given current greenhouse gas emission trends. Rich countries, which typically have lower average temperatures, will experience a much milder or even positive average effect. But India, for example, could see a drop of 30 to 40 percent. Sudan, already wracked by civil war fueled in part by failing rains, is projected to suffer as much as a 56 percent reduction in agricultural production potential.

Because of the potentially far-reaching impact of climate change on developing countries, policies in this area account for 60% of the total score in the CDI environment component. Biodiversity—including ratification of relevant treaties and tropical timber imports—accounts for 30% of the environment indicator, while fisheries policy accounts for the remaining 10%.

Within each of these areas there are several weighted indicators. Climate change, for example, includes greenhouse gas emissions per capita (10% of the total environment score), average annual change in greenhouse gas emissions per unit of GDP over the past 10 years (15%), gas taxes (15%), consumption of ozone-depleting substances per capita (10%), and ratification of the Kyoto Protocol (10%), for a total of 60% of the environment indicator. Roodman designed the environment component in 2003, and incorporated contributions from Amy Cassara and Daniel Prager of the World Resources Institute in 2005.

Norway’s strong showing this year partly reflects a change in how the Index is calculated: greenhouse emissions from land use are now included and Norway’s forest growth appears to have accelerated in recent years, so total greenhouse gas emissions fell from nearly 36 million tons of carbon dioxide equivalent in 1995 to just under 27 million tons in 2005.

CDI Rankings

For the index overall, the best performing country is The Netherlands, followed by Denmark. Norway and Sweden are tied in third place. Down the line are Finland, New Zealand, Canada and Australia.

Among the G–7—the countries that matter most for developing countries because of their economic power— the U.K. comes in second behind Canada, followed by Germany, while Japan comes in last on the index.

Country Rankings

Below are the ranks, scores, and short summaries of strengths and weaknesses for some of the 21 countries covered by the CDI.

Each country receives a score in each of the seven policy areas. The scores are scaled so that the average is exactly 5 in 2003, the initial publishing of the CDI. Then the seven components are averaged for a final score.

Full country reports for all 21 countries are available on the CGD Website www.cgdev.org, which also includes interactive maps and separate reports for each of the 21 countries, in English and in the language of the country.

1. NETHERLANDS ranks first overall in 2007. The Netherlands places in the top half of CDI countries in all seven components. It gives a large amount of aid as a share of its income, and the quality of its aid is high. The Netherlands also has policies that promote productive investment in poor countries as well as a strong environmental record from the perspective of developing countries.

2. DENMARK ranks second overall in 2007. The Danish foreign aid program is the best in the world in terms of quantity, weighted for country size, as well as its quality. Denmark also contributes a large amount of personnel and finance to international peacekeeping and humanitarian interventions, and encourages research and development. But Denmark’s performance is affected by its barriers against agricultural imports from developing countries and its high fishing subsidies.

3. SWEDEN gives a large amount of foreign aid as a share of its income and has a high quality foreign aid program. The Swedish government also bears a large burden of refugees in humanitarian emergencies and strong support for research and development. Its security, migration, and environmental scores are near the CDI averages.

3. NORWAY ranks first in the security component, thanks to large contributions of personnel and money to internationally sanctioned peacekeeping and forcible humanitarian interventions. Norway also gives a large amount of foreign aid as a share of its income and has in place policies that support Norwegian investment in developing countries. But Norway also employs some of the most restrictive trade barriers against poor countries, finishing second to last in the trade component.

5. FINLAND is a strong supporter of technological innovation and dissemination to the developing world and has also made significant contributions to international peacekeeping and forcible humanitarian interventions. But Finland’s performance is affected by a below-average score in the migration component. Due to high barriers that restrict entry, the flow of immigrants from poor countries to Finland is one of the lowest in the CDI as a share of country population.

5. CANADA’s main contributions to the development of poor countries come through its strong support of technological innovation and dissemination, its low barriers against developing country exports, and its policies that promote productive investment in poor countries. But Canada’s positive impact is reduced by its large share of tied foreign aid, its arms exports to undemocratic governments, and its poor environmental record from the standpoint of developing countries.

5. AUSTRALIA’s score is driven by its leading role in peacekeeping efforts, low trade barriers against developing country exports, and relatively open migration policies. On the negative side, Australia gives only a small share of its income in foreign aid, has the highest greenhouse gas emissions rate per person, and, along with the United States, is one of only two CDI countries that have not ratified the Kyoto Protocol.

5. NEW ZEALAND has among the lowest trade barriers of CDI countries. For its size, New Zealand also contributes significant finance and personnel to internationally sanctioned security operations and admits a large number of immigrants from developing countries. Yet New Zealand’s overall score is brought down by its small foreign aid program, poor donor practices, and weak policies toward investment in poor countries (New Zealand is one of just two rich countries lacking a national agency offering political risk insurance).

9. UNITED KINGDOM finishes first on the investment component, thanks to policies that promote healthy investment in poor countries. It also has a very strong environmental record from the perspective of developing countries. But the United Kingdom ranks low in the security component because of arms sales to undemocratic governments. British borders are also relatively closed to immigrants from poor countries.

10. IRELAND’s strongest contributions to the development of poor countries come through its high quality foreign aid program and its lack of arms exports to undemocratic governments. But as one of only two countries without a national political risk insurance agency, Ireland ranks as the least supportive CDI country of investment in poor countries. It is also one of the lowest in government support for technology creation and dissemination.
10. AUSTRIA is rewarded for admitting a large number of legal immigrants from developing countries and for its relatively strong environmental record. But Austria is penalized for poor donor practices, its lack of policies to promote healthy investment in poor countries, and its policies that limit the diffusion of technology.

12. GERMANY’s environmental performance from the perspective of developing countries is among the best in the CDI. Germany also has a large inflow of immigrants from poor countries and has taken steps that promote German investment in the developing world. But Germany would score higher if it increased participation in international peacekeeping efforts and provided more support for the creation and dissemination of technological advances.

13. FRANCE is one of the strongest supporters of research and development, helping France finish first in the technology component. But France’s performance is affected by below-average scores in three CDI components: aid, migration and security. France has a poor immigration record due to the low number of immigrants entering France from poor countries and is one of the world’s largest exporters of arms to undemocratic governments.

14. UNITED STATES barriers against developing country agricultural exports are lower than those of most CDI countries, and some U.S. policies promote healthy investment in poor countries. But the United States finishes near the bottom of the rankings in both the foreign aid and environment components. U.S. foreign aid is small as a share of its income and it “ties” a large share of this aid to the purchase of U.S. goods and services. The United States also has the lowest gas taxes and among the highest greenhouse gas emission rates per person. Along with Australia, it is one of only two CDI countries that have not signed the Kyoto Protocol.

15. SPAIN gives only a small share of its income in foreign aid and has one of the worst environmental records in the CDI from the perspective of poor countries. Spain’s highest CDI rank comes in the migration component, thanks to large number of immigrants from developing countries entering the country. Spain also ranks high in the technology component thanks to government policies that support innovation at home and diffusion of technological advances abroad.

15. BELGIUM places among the top third of CDI countries in only two components: foreign aid and environmental performance. In the remaining five components, Belgium is among the bottom third of CDI countries. Belgium’s overall score is hurt most by the small number of unskilled immigrants from developing countries entering Belgium during the 1990s, its arms exports to poor and undemocratic governments, its small contributions to international peacekeeping and humanitarian interventions, and its low level of government support for research and development.

17. SWITZERLAND admitted many immigrants from developing countries in the 1990s and gives an above-average level of foreign aid for its size. But these contributions to development are offset by Switzerland’s poor performance on other CDI components. Switzerland is one of the smallest contributors to international peacekeeping operations, having only recently joined the United Nations. It also has high barriers to exports from developing countries, especially agricultural goods.

18. PORTUGAL’s environmental record from a developing country perspective is strong, and the Portuguese government has contributed a significant amount of personnel and finance to international security efforts. But Portugal is least open to developing country migrants of any country in the CDI and gives a very small share of its income in foreign aid.

19. ITALY’s government is above average on funding for research and development and has in place policies that promote Italian investment in the developing world. But Italy’s overall score is brought down by a very small foreign aid program, poor donor practices (including the highest share of “tied” aid in the CDI), and the low number of unskilled immigrants entering from developing countries as a share of the Italian population.

20. GREECE scores below average in four components: foreign aid, investment, migration and technology. The Greek government provides little support for research and development, and has weak policies to promote investment in poor countries. Most notably, the migration inflow from poor countries is one of the lowest among CDI countries.

21. JAPAN’s barriers to exports from developing countries are the highest in the CDI (driven mainly by rice tariffs) and its foreign aid is the smallest as a share of income. Japan also has a poor environmental record from the perspective of poor countries and admits very few immigrants. Japan’s strongest contributions to development come through government support for research and development and through policies that promote investment in poor countries.