(Bloomberg) -- Delegates from almost 200 countries are gathering this week in Cali, Colombia, for the biennial United Nations summit on biodiversity, the first one since the landmark Global Biodiversity Framework was signed in Montreal in December 2022.
Nature is disappearing at an alarming rate. Over the past 50 years, wildlife populations have shrunk by almost three-quarters, according to the latest research by WWF. The decline is happening so fast that the world is approaching possibly irreversible tipping points. The planet is in a “critical situation,” said Susana Muhamad, COP16 president and Colombia’s environment minister.
The summit’s goal, Muhamad said, is to “make peace with nature.” In practical terms, that means assessing and advancing nations’ progress on their efforts to implement the 2022 framework. The 15-page pact contains four overarching goals for 2050 and 23 shorter-term targets, from protecting 30% of the globe’s land and sea to halving food waste to slashing use of harmful chemicals.
Who’s going to COP16?
Around 23,000 people are registered to attend — a record turnout, according to Astrid Schomaker, executive secretary of the UN Convention on Biological Diversity. Among those expected are almost 100 government ministers and several heads of state. Some of the world’s biggest banks, including JPMorgan Chase & Co. and Standard Chartered Plc, are sending representatives for the first time. Citigroup Inc., Bank of America Corp., HSBC Holdings Plc and Deutsche Bank AG will also be present.
What’s on the agenda?
The focus will be threefold:
Combatting ‘biopiracy’
Perhaps the biggest issue is deciding the final details of a new global system to collect and share a sliver of the trillions of dollars in revenue raked in by the world’s largest companies. Conglomerates in sectors like pharmaceuticals and biotechnology would be asked to contribute to a fund to compensate countries from which their resources are derived. That money would in turn be used to protect nature.
In the past, researchers interested in tree sap to help create new drugs or rare plant species to enhance crops would physically export samples. Now, they’re much more likely to take a digital fingerprint of that resource and upload it to an online database. But there’s no global rule governing how countries should be paid for that information on their genetic resources, a situation that some countries liken to a form of piracy.
Muhamad sees approval of the mechanism, including “teeth for implementation,” as a top agenda item. The UK and the EU also regard an agreement on “biopiracy” as a priority. It’s set to be highly contentious, however. Research firm BloombergNEF rates the likelihood of parties reaching consensus on the details of a mechanism and fund at only 2 in 10.
Taking stock
Countries are due to submit their so-called national biodiversity strategies and action plans for meeting the framework by the start of the summit Monday. So far, just 32 countries plus the EU have done so. Laggards include the UK and Switzerland, as well as a number of the world’s so-called “megadiverse” countries, among them Brazil, India and South Africa. (The US is not a signatory.)
“We need to make countries accountable,” said Lucia Ruiz, director for conservation areas at WWF. “Otherwise, we have a North Star to follow, but we don’t have a plan on how to get there.” Under the framework that preceded this one, not a single global biodiversity goal was met.
Banks and investors are looking to the national plans to help shape their investment decisions and in-house nature strategies. “If countries can start to make those longer-term strategies more tangible and clear,” said Judson Berkey, group head of engagement and regulatory strategy at UBS Group AG, investors can then “actually start to think about, ‘OK, where are the returns and what will be commercially viable?’”
Boosting finance
The 2022 framework called for raising $700 billion per year for nature protection and restoration. Some $500 billion is to come from redirecting harmful subsidies, like those for fossil fuels and pesticides, to nature-friendly business. About $200 billion is expected from new public and private sources. As at the better-known climate COPs, who pays, how much and to whom will be points of contention.
On the public finance side, developed countries have committed to contribute at least $20 billion per year by 2025 to poorer countries. For 2022 — the latest year for which data is available — they were $4.6 billion short of that target, according to the Organisation for Economic Co-operation and Development (OECD).
There’s already been controversy. Campaign for Nature, a nonprofit, says most of the projects to which the $15.4 billion in biodiversity finance was allocated are only tangentially linked to protecting biodiversity. For instance, they include grants to fight organized crime in Latin America, for humanitarian aid in Ethiopia and for higher education in Niger. The amount of funding for projects principally focused on biodiversity actually decreased from 2015 to 2022, OECD data show.
Still, Muhamad said she’s calling for developed countries to increase the pledge, and a new broad-based fund is on the table too. “It’s very important to understand that there is a commitment that is going to be fulfilled,” she said. “This is fundamental for the trust between the parties.”
When it comes to private capital, proposals have ranged from impact funds or bonds to a new market for biodiversity credits — tradable instruments representing a unit of protected or restored nature. That market remains nascent. Behind closed doors, bankers have said they’re at a loss about how to approach the topic.
“We are in the Nineties for biodiversity financing,” said Avril Benchimol Dominguez, a former investment banker and blended finance coordinator at the Global Environment Facility, a multilateral family of funds housing the Global Biodiversity Framework Fund, set up last year. “We haven’t yet proven the business case,” she said.
(Updates with new details on attendance numbers and national action plan submissions.)
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