Finance difficulty pushing international locations into ‘two opposing camps’ at biodiversity COP

The second week of the Convention of Events (COP16) assembly below the United Nations Conference on Organic Variety (UN CBD) in Cali, Colombia, started with a problem that has adopted each dialogue on the talks – finance. October 28 marked ‘Finance Day’ on the COP16, the place occasions matched the day’s theme in discussing funding for nature. In negotiations, nonetheless, the query of find out how to mobilise funds for biodiversity has been probably the most contentious and seen disagreements between international locations over fairness and entry.

“Two opposing camps have been standing of their corners stubbornly,” Bernadette Fischler Hooper, head of worldwide advocacy at WWF UK, mentioned throughout a press convention on Monday, “It’s essential that events construct belief and the boldness that these assets will move. This impasse must be damaged now.”

If delegates are unable to agree on a finance mechanism, discussions shall be taken over by Ministers earlier than the convention involves an finish on November 1. “A variety of floor must be coated in offering simply accessible technique of implementation, i.e.  monetary assets, know-how and capability constructing wants with the requisite pace, scope and scale,” mentioned Union Minister of State for Surroundings, Forests and Local weather Change, Kirti Vardhan Singh, whereas delivering India’s nationwide assertion on October 29.

Finding the biodiversity fund

The UN CBD is devoted to the worldwide conservation and sustainable use of organic assets, masking ecosystems, species variety, and genetic assets – all of which contribute to financial exercise all over the place. The safety and restoration of nature, nonetheless, is dealing with a useful resource hole of no less than $700 billion per 12 months.

At COP15 in 2022, events adopted The Kunming-Montreal World Biodiversity Framework (KMGBF), an settlement setting 4 objectives for 2050 and 23 targets for 2030, which included steadily closing the biodiversity finance hole, in addition to calling for a extra strong and equitable implementation of monetary assets. For decrease and center earnings international locations, this has meant making drastic modifications to the present finance mechanism, which routes biodiversity funding by the World Surroundings Facility (GEF), of which the World Financial institution is a trustee. Larger earnings international locations, however, choose to maintain the present arrange, arguing a brand new mechanism shall be “useful resource intensive and add little worth.”

“Creating nation events are very strongly of the view that, as a funding mechanism designed to ship the commitments below the biodiversity conference, it needs to be responsive and accountable to events instantly. The primary difficulty is that the fund favours the developed nation pursuits by the governance construction of the GEF,” mentioned Tom Picken, director of the forests and finance marketing campaign on the Rainforest Motion Community, in a telephone name with Mongabay India. The GEF’s governing council reserves 14 seats for developed international locations, 16 for creating international locations, and two for economies in transition.

South Africa and Colombia have been among the many international locations calling for a fund devoted solely to biodiversity finance, whereas Fiji, representing 14 small island creating states, said that the Pacific is underrepresented within the current mechanism. India and Bangladesh additionally mentioned “the GEF procedures are cumbersome, noting the necessity for a clear and inclusive mechanism,” in response to the Earth Negotiations Bulletin issued by the Worldwide Institute for Sustainable Growth, which tracks negotiations carefully.

Elevating biodiversity finance

Greater than half of the world’s gross home product (GDP) depends upon high-functioning biodiversity, in response to the assume tank ODI. However these assets are operating skinny: 73% of species variety internationally are in decline, with the Latin American, Asian, and African areas experiencing probably the most speedy declines in latest many years. These areas are additionally among the many most megadiverse on the planet.

One of many close to time period targets below the KMGBF is to extend monetary assets for biodiversity conservation to $20 billion per 12 months by 2025 and $30 billion by 2030. Cumulatively, wealthy international locations have contributed round $8.39 billion in the direction of biodiversity finance as of 2021. Newer contributions, particularly to the just lately arrange World Biodiversity Framework Fund below the GEF, haven’t stored tempo. Regardless of the looming 2025 deadline, whole pledges to the GBF fund quantity to just $396 million, after $163 million was pledged on Monday by twelve donor international locations.

The GEF, which additionally serves the United Nations Framework Conference on Local weather Change and 5 different conventions, has solely raised $5.33 billion in pledges in its newest spherical. “The GEF merely has not secured the sufficient funds as required below the GBF Fund. So there’s not sufficient cash being dedicated into the World Biodiversity Framework Fund, and it’s at the moment tough to entry due to the GEF’s procedures,” mentioned Picken. “Developed international locations, together with monetary sector and enterprise pursuits, are very strongly pushing personal sector pursuits like biodiversity credit and offsets.”

In a latest evaluation, ODI assessed what the “justifiable share” contributions of developed nation events could be to the $20 billion, and located that solely Norway and Sweden had met their truthful shares to this point. “Worldwide public biodiversity finance flowing from developed to creating international locations is necessary in moral and symbolic phrases to acknowledge differing tasks in historic and present biodiversity depletion; in relational phrases to display solidarity and guarantee belief in multilateral governance preparations; and in instrumental phrases to supply assets to international locations with extreme fiscal and monetary constraints,” says the evaluation.

The evaluation assessed justifiable share contributions of 28 wealthy international locations, by every nation’s historic duty (their ecological footprint over the previous 60 years) together with their capability to pay (measured by gross nationwide earnings, and inhabitants). Whereas Norway and Sweden met their contributions, three others got here shut, assembly 74% or extra of their calculated obligations – Germany, France, and Canada.

The remainder of the international locations analysed met 49% or much less of their justifiable share contributions. Poland and Greece are the worst performing, in response to the evaluation, having met simply 5% and seven% of their truthful shares. “Whereas absolutely the quantity of biodiversity finance these international locations ought to present is small, their failure to satisfy this goal could mirror the low significance they assign to biodiversity conservation,” the evaluation says.

Reforming the finance system

Other than the quantum, location, and entry to biodiversity finance, a number of international locations and civil society organisations have mentioned current international finance techniques have to be reformed in order that they align with the pursuits of the GBF.

In 2023, the United Nations Surroundings Programme’s State of Finance for Nature report estimated, for the primary time, the quantum of finance flows that influence nature. The report discovered that close to $7 trillion is invested globally annually in actions which have a direct detrimental influence on nature, from each private and non-private sector sources, equal to roughly 7 per cent of world GDP.

“The finance for biodiversity conservation is at the moment minuscule in comparison with expenditure on different sectors that influence biodiversity in a detrimental means, particularly in creating international locations like India,” Neeraj Khera, an impartial marketing consultant engaged on biodiversity mainstreaming, instructed Mongabay India. “If efficient measures to mainstream biodiversity usually are not taken at present, the demand for biodiversity finance goes to shoot up within the years to come back. There’s an pressing want to guage the synergies and trade-offs of biodiversity conservation with interventions from different sectors to keep away from this future monetary loss.”

In accordance with Lim Li Ching, a senior researcher with civil society organisation Third World Community and co-chair of the Worldwide Panel of Consultants on Sustainable Meals Techniques, low and center earnings international locations are sometimes “locked into” making investments in sectors that hurt biodiversity and hinder long run sustainable growth.

Throughout a press conference on Monday, she cited examples of how bilateral agreements and growth banks working in Colombia and Ecuador incentivise investments in extractive sectors. Colombia is at the moment in a bilateral investment treaty with the UK that has provisions for Investor-State Dispute Settlements, which permits overseas traders to sue sovereign governments in the event that they consider the worth of their investments have been broken.

“Though it’s explicitly prioritised a simply transition off coal, Colombia is compelled to proceed to function its largest open pit, coal mine attributable to a world funding settlement, and this prevents it from backing out with out dealing with extreme monetary penalties. When Ecuador introduced its nationwide referendum to limit oil and mineral extraction in ecologically delicate areas, the largest credit standing businesses instantly downgraded Ecuador. What’s the nation to do in these sorts of conditions?” she mentioned.

Ching added, “What now we have actually is creating international locations being constrained of their means to decide on extra sustainable pathways, as a result of they’re ready inside an unfair worldwide monetary structure that retains them in circumstances of monetary subordination. Governments are due to this fact compelled to make selections to keep up brief time period monetary stability on the expense of long run.”

Banner picture: Officers in dialogue on the COP16 in Cali, Colombia. Image by IISD/ENB/Mike Muzurakis.