During COP16, more financial resources are being demanded from countries and companies in the North to protect the biodiversity of the South. The Conference of the Parties on Biodiversity of the United Nations (COP16), held in Cali, discussed on Monday, October 28, 2024, how to finance the protection of nature.
Two years ago, 190 countries committed to protecting 30 percent of the planet by 2030, but so far, only 35 (including Colombia, Mexico, Spain, and the European Union) have presented action plans.
A Horizon of Opportunities for Latin America
To create more incentives that encourage States to protect the climate, money is needed. Key questions like ‘who pays how much and to whom?’ test global solidarity. However, they also represent a great opportunity for megadiverse countries like those in Latin America, according to experts.
“Latin America can demonstrate leadership and push for deep changes in the international financial system,” says Oscar Soria from Cali, Argentine activist and director of the international think tank The Common Initiative.
“There are basically two sources of financing: private and public,” reminds Brian O’Donnell, director of the non-governmental organization Campaign for Nature, based in the United States, who is participating in the negotiations in Cali.
Unfulfilled Commitments and Poor Implementation
In the public sphere, industrialized countries promised in 2022 to contribute a minimum of 20 billion dollars annually to the Global Environment Facility (GEF), a partnership based in Washington composed of 18 UN agencies, multilateral development banks, and international NGOs.
“They have only fulfilled about 1%, and there is very little transparency in the management of those funds,” criticizes O’Donnell in an interview with DW.
On the other hand, Soria laments that “once again, the rich countries have broken their promises, and it is not due to a lack of money.” Last year, “the G7 countries spent 1.2 trillion dollars on armaments,” he points out.
But the rich countries not only fail in the amount of money but also in management. A study by the NGO Survival International found that bureaucracy consumes 24% of the funds and that, of the 22 approved projects so far, only one has benefited indigenous peoples, while a third went to projects of the U.S. section of the WWF.
“We believe that the entire financing mechanism must be reconsidered,” demands Fiore Longo, researcher and activist at Survival International.
The Southern countries think the same. Led by Brazil, Argentina, and Colombia, they demand a new organization based in the South, whose goal is to prioritize projects in countries with the most biodiversity. However, donors reject this proposal considering it “supposedly too costly and slow,” as O’Donnell recounts.
Companies Evading Their Responsibility
The second source is private financing. Large companies make billions with products based on genetic data from nature. Developing countries demand a fund to which part of these profits should be allocated.
Currently, there is a debate on whether this contribution should be voluntary, as preferred by major pharmaceutical companies and the cosmetic industry, supported by governments like Canada, Japan, and Switzerland, or mandatory, as demanded by Southern countries.
Many of these companies are wealthier than entire States. “They have to assume their responsibility,” demands activist Oscar Soria. “They give up a bit of profit, but preserve biodiversity, which is the foundation of their business,” points out the Argentine expert.
In Cali, a 1% levy on turnover or profits is being discussed. The multinational pharmaceutical company AstraZeneca spends, according to Soria, one billion dollars a year just on advertising. Meanwhile, the German company Bayer-Monsanto reported revenues of 47 billion dollars in 2023. “We find it very hard to believe that paying a levy for genetic resources would impact companies so much. It is irresponsible and short-sighted greed,” adds the expert.
The distribution of this levy is also under discussion. There is a proposal to allocate 30% to indigenous peoples. During Monday’s debate, Norway proposed increasing it to 80%.
How to Escape the Debt Trap?
Then there is the issue of external debt. “Without a serious debate on forgiveness, it is difficult to move forward,” considers Soria. “Today, the financial system operates to destroy biodiversity rather than protect it,” he emphasizes. The topic is not on the table at COP, but it has arisen in the corridors.
For example, in the presentation of the ‘Report on Debt, Nature, and Climate,’ commissioned by the Governments of Colombia, Kenya, France, and Germany. The authors insist that the triple crisis of the burden of external debt, the loss of nature, and the climate crisis lead Southern countries into a vicious circle.
Environmental disturbances and subsequent socio-economic tensions increase borrowing costs and slow economic growth, the authors write. Consequently, countries with high debt burdens have fewer resources to pursue a path of sustainable development and are forced to continue in the extractive and destructive trap.
Economy of the North Linked to Biodiversity of the South
What can be expected from COP16 then? “In the best-case scenario, donor countries will put more money on the table and agree on a strategy to enhance transparency,” O’Donnell considers. “This way, we can make progress in implementation, instead of fighting over financing,” the environmentalist estimates.
In the worst-case scenario, he adds, financing will remain uncertain, there will be implementation delays, and distrust between the South and the North will deepen, with the danger of this toxic atmosphere spilling over into climate change discussions in Baku in December.