CALI, Columbia, Oct 26 (IPS) – At the end of the first week at the 16th Conference of Parties on Biodiversity (COP16), finance emerges as the biggest issue but also shrouded in controversies.
On Saturday, as the COP moved closer to its most crucial phase of negotiations, resource mobilization—listed under Target 19 of the Kunming-Montreal Global Biodiversity Framework (KMGBF)—took centerstage, with most parties demanding faster action, greater transparency and the adoption of true solutions to halt biodiversity loss.
Biodiversity finance: Expectation vs Reality
On Thursday, October 24, the government of China formally announced that the Kunming Biodiversity Fund—first announced by Chinese president Xi Jinping in 2021—was now fully in operation. The fund promises to contribute USD 220 million over the next 10 years, which would be spent especially to help developing countries in implementation of the KMGBF and achieve its targets, said Huang Runqiu, Minister of Environment and Ecology, China, at a press conference. It wasn’t clear, however, how much of the promised amount had been deposited.
This has been the only news of resource mobilization for global biodiversity conservation received at COP16, as no other donors came forth with any further announcements of new financial pledges or contributions to the Global Biodiversity Framework Fund (GBFF), which was expected to receive USD 400 billion in contribution by now but has only received a paltry USD 250 million. In addition, there were no announcements of the countries reducing their current spending on harmful subsidies that amount to USD 500 billion and cause biodiversity degradation and biodiversity loss.
In absence of new contributions and lack of any concrete progress on reduction of harmful subsidies, the new mechanisms like biodiversity credits to mobilize resources for implementation of the Global Biodiversity Fund is fast gaining traction.
From October 21–24, the COP16 witnessed a flurry of activities centered primarily around biodiversity credits and the building of new pathways to mobilize finance through this means. Experts from both the UN and the private sector were heard at various forums discussing the needs of developing tools and methodologies that would help mobilize new finance through biodiversity credits while also ensuring transparency.
Inclusiveness and the Questions
According to a 2023 report by the World Economic Forum, the demand for biodiversity credits could rise to USD 180 billion annually by 2050. The report said that if major companies stepped into the market, the annual demand for biodiversity credits could go to as high as USD 7 billion per year by 2030.
Experts from the UN and a variety of technical people with various backgrounds said that since biodiversity credits are still in their infancy, there will undoubtedly be a lot of scrutiny and criticism. The Biodiversity Credit Alliance is a group that provides guidance for the establishment of a biodiversity credit market. The urgent need, they said, was to develop infrastructure and policies that would help answer those questions and tackle the scrutiny. The first and foremost of them was to help build digital tools and infrastructure that could be used to share and store biodiversity data in a credible and transparent manner.
Nathalie Whitaker, co-founder of Toha Network in New Zealand, a group of nature-based business investors, said that her organization is building digital tools, especially for helping local communities to participate in biodiversity credit programs and access the benefits.
“Once the communities have these tools, they can instantly see what data is being used to pay for the biodiversity credits or even decide the value of the natural sources in their territory. So, they can see what resources are being discussed, what is being valued, how it’s being done and how the whole discussion is moving forward,” Whitaker said.
Fabian Shimdt-Pramov, another speaker at the event, said that the quality of the tools would decide the course and results of a biodiversity credits project.
Shimdt-Pramov, chief business development officer at Biometric Earth, a German company that uses artificial intelligence to build biodiversity analytics tools from different sources such as remote sensing, wildlife cameras, acoustic monitoring, etc.
“If methodology is not correct, if the data is not correct, the system doesn’t work,” he said, emphasizing on the requirement of high-level technological expertise that is needed to get a biodiversity credit project off the ground.
However, when questioned on the cost of buying such high-end technologies and tools, especially by Indigenous communities living in remote areas without any internet connectivity, both speakers appeared to be at a loss for words.
“I have seen in the Amazon a community selling five mahogany trees on the internet, so I am guessing it’s not a big challenge,” Shmidt-Pramov said in a dismissive voice. Whitaker acknowledged that lack of access to digital technology in Indigenous Peoples communities was an issue but had no solutions to propose.
Terence Hay-Edie of Nature ID, UNDP, however, stressed the need to empower the communities with the knowledge and skills that would help them access the tools and be part of a biodiversity credit.
As an example, he cites restoration of river-based biodiversity as a biodiversity credit project where a river is considered to have the same rights as a human being. According to him, if values of credits are counted and traded for restoration of biodiversity around a river, it will require recognition of all these rights that a river has, which is only possible when the community living along the river has full knowledge of what is at stake, what is restored, what value of the restored biodiversity is to be determined and how the pricing of that value will be decided.
“A river can be a legal entity and have a legal ID. Now, can we build some tools and put them in the hands of the community that is doing the restoration to know the details of it? That’s what we are looking at,” Hay-Edie said.
A False Solution?
However, Indigenous peoples organizations at the COP16 were overwhelmingly opposing biodiversity credits, which they called “commodifying nature.”
What are biodiversity credits? It’s basically regenerating biodiversity where it is destroyed and earning money from that. But it doesn’t work that way, according to Souparna Lahiri, senior climate change campaigner at Global Forest Coalition.
“If we talk of a forest, the ecosystem is not just about trees but about every life that thrives in and around it—the rivers, the animals, plants, bees, insects, flowers and all the organisms. Once destroyed, it’s lost forever. And when you regenerate it elsewhere, you can never guarantee that it will be an exact replica of what has been lost. This is why the very concept of biodiversity credit is a destructive idea,” says Lahiri.
Valentina Figuera, also of the Global Forest Coalition, said that while trading carbon credits could work as a tool in carbon change mitigation, it would not be the same in biodiversity.
“In climate change, you can measure the total carbon generated by a forest, for example. But in biodiversity, how do you measure it? What is the mechanism? How do you even value life that thrives there? So, this concept is a straight import from climate change and forcefully imposed in biodiversity, which is nothing but a false solution, so that businesses that cause biodiversity loss can conduct their business as usual.
The Dilemma of Participation
COP16, dubbed the “People’s Cop” by Colombia, the host country, has drawn several hundred representatives of Indigenous Peoples and Local Communities (IPLC), especially from across Latin America, including Colombia, Brazil, Panama, Venezuela and Peru. While the Latin American IPLC organizations appeared united in their opposition to biodiversity credits, African organizations seemed to be willing to consider it.
Mmboneni Esther Mathobo of the South African NGO International Institute of Environment said that her organization was in support of biodiversity credits, which could, she said, not only help the community earn money but also motivate them further to preserve biodiversity.
“We are influencing and making sure that our rights are safeguarded and protected in this newly emerging market of bringing biodiversity credits,” said Mathobo.
Currently, Namibia is implementing its first biodiversity carbon credits project in partnership with the World Wildlife Fund (WWF). Known as the Wildlife Credits Scheme, the project is known as a Payment for Ecosystem Services (PES) that rewards communities for protecting wildlife and biodiversity. Mathobo said that the project in Namibia made her realize that there was a great opportunity for local communities to conserve and restore biodiversity and earn from it.
“We faced many challenges to earn carbon credits because that system was established and created behind our heads. And now we wake up, but we find ourselves sitting with a lot of problems in that market where our communities are not even benefiting. But we believe that with the engagement of the biodiversity alliance, UNDP, we are going to be the ones making sure that whatever happens in the biodiversity credit market, it benefits all our regions and all our communities, as well as safeguarding and protecting our rights,” she said.
“To each their own, if Latin American indigenous communities feel they don’t want to trade natural resources, that’s their right. But in Africa, we have the potential to earn biodiversity credits and we need the money, so we are supporting it,” Mahobo commented when reminded of the opposition of Latin American countries to biodiversity credits.
Source: World Economic Forum Report on Biodiversity Credit
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