Biodiversity finance discussions suspended on knife edge

Biodiversity protection and habitat protection are underway in Chinas Baima Lake National Wetland Park. DW News

London, 8 Nov (Lim Li Ching) – Global biodiversity talks were suspended on the morning of 2 November 2024, with a failure to adopt the decision on resource mobilization due to a lack of quorum.

Parties to the Convention on Biological Diversity (CBD) met in Cali, Colombia at the 16th Conference of the Parties (COP16). The talks, which began on 21 October, were scheduled to end on 1 November.

However, following protracted overnight negotiations on digital sequence information (DSI) on genetic resources, with its decision only adopted at about 7.50am on 2 November, the negotiations then stalled on resource mobilization. With North-South divides laid bare, visibly exasperated developing countries then questioned if there was quorum, as many of their delegations had already left to catch flights home.

(Rule 30 of the CBD’s rules of procedure stipulates that the COP President may have any decisions taken when representatives of at least two thirds of the Parties are present.)

When it was clear that there was a lack quorum to adopt further decisions, the COP16 President, Susana Muhamad, Minister of Environment of Colombia, suspended the meeting at 8.27am local time.

A resumed COP16 will have to be convened to adopt the remaining decisions – including on resource mobilization, mechanisms for planning, monitoring, reporting and review, the updates to the monitoring framework for the Kunming-Montreal Global Biodiversity Framework (KMGBF), and the budget which is needed to ensure the continued functioning of the CBD Secretariat over the next 2 years.

There is no clarity yet on when or where the resumed meeting will happen.

Contact group: Stalemate on dedicated fund, revised strategy largely agreed

Discussions on resource mobilization were among the most difficult at COP16, with a clear lack of trust between developed and developing countries. The Contact Group on resource mobilization, co-chaired by Ines Verleye of Belgium and Patrick Luna of Brazil, met nine times over the course of COP16.

At those meetings, conversations pivoted around two main issues: (i) the question of the establishment of a dedicated global instrument for biodiversity finance, which has been a consistent call of developing countries, and the related intersessional process that could guide its operationalization; and (ii) the revised strategy on resource mobilization.

Both are mandates from COP15, the second part of which was held in December 2022 in Montreal, Canada. (COP15, originally scheduled for Kunming, China in 2020, was postponed multiple times due to the COVID-19 pandemic. Part 1 of COP15 was largely procedural and held in October 2021 in virtual mode, with limited in-person participation.)

Developing countries had been calling for a dedicated global biodiversity fund, under the authority of the COP, to be established at COP15 (see ‘Developing countries, in show of unity, call for new biodiversity fund’, 14 December 2022).

This was firmly opposed by the developed countries, which prefer the existing and interim financial mechanism of the CBD, the Global Environment Facility (GEF), which has its own governance structure and procedures that largely serve the interests of donor countries.

A COP15 compromise was the establishment of the Global Biodiversity Framework Fund (GBFF), set up as a GEF Trust Fund, to mobilize resources for the implementation of the KMGBF. However, this is seen by most developing countries as inadequate, as financial flows to them through the GEF are problematic, as evidenced by their decades of experience.

A further last-minute further compromise that held up the final COP15 plenary introduced a sunset clause in 2030 to the GBFF, unless otherwise decided by the COP. The compromise also opened the door for consideration at COP16 of a dedicated financing mechanism for the CBD, under the authority of the COP. (See ‘New implementation framework for Biodiversity Convention adopted’, 28 December 2022.)

Therefore, developing countries were expecting COP16 to be the moment where a historic decision would be taken to establish the dedicated biodiversity fund. Yet, discussions were stalemated on the issue.

The Co-chairs attempted to rebuild trust and engaged negotiators creatively. They proposed four options relevant to the global instrument for biodiversity finance.

This ranged from the developed country preference of continuing to mobilize resources and monitor progress towards Target 19 of the KMGBF (on financial resources), without further consideration of the dedicated fund, to deciding to establish the fund at COP16, with an intersessional process to prepare its modalities by COP17.

Developing countries viewed the former as a ‘do nothing’ option, and were strongly in favour of the latter.

A non-paper comprising an Annex contained three related clusters, detailing elements relevant to: (i) mobilizing resources from all sources and instruments; (ii) effectiveness of relevant financial mechanisms against agreed criteria; and (iii) criteria for the design of the dedicated global instrument for biodiversity finance. These were seen as essential complements to the options.

Developed countries were adamant in their support of continuing to mobilize resources from all sources. They consistently sidestepped their obligations under Article 20 of the Convention to provide financial resources to developing countries, so that developing countries can implement their commitments. They said that “under no conditions” could a dedicated fund be accepted.

With no progress on these issues, Co-chair Verleye indicated at the close of the seventh session of the Contact Group on 29 October that discussions at the negotiators’ level had been exhausted, and would thereafter move to a higher political level.

Frustrated by the lack of progress, developing countries came together as a like-minded group, issuing a statement at the stocktake plenary on 30 October, calling for equity and ambition in biodiversity finance. (See ‘Like-minded developing countries call for equity and ambition in biodiversity finance’, 1 November 2024.)

On the other key issue in the COP16 resource mobilization discussions – the strategy for resource mobilization – there was eventual progress. The strategy was adopted at COP15, as guidance to facilitate the immediate mobilization of resources for the KMGBF. It contains an intermediate phase (2023–2024), and a medium-term phase (2025–2030).

The COP15 decision therefore called for a review of the strategy at COP16, to fully align its second phase with the KMGBF. The task of reviewing and aligning the strategy fell to the Advisory Committee on Resource Mobilization, which met three times in the intersessional period and forwarded its report to the Subsidiary Body on Implementation (SB!).

At COP16 in Cali, following initial discussions on the SBI recommendation, a non-paper was produced, which then became the basis of the negotiations on the text of the strategy, and the related paragraphs in the draft decision. The Contact Group, at its final session on 31 October which ran from 10am-3pm, with no breaks, managed to finally largely agree on the revised strategy, except for brackets around the still controversial issue of ‘nature-based solutions’.

President’s text leaves a lot to be desired

Early in the morning of the scheduled last day of COP16 (1 November), three President’s texts were released on the most contentious issues – on DSI, resource mobilization, and mechanisms for planning, monitoring, reporting and review.

Several contact groups that were set up for those agenda items could not resolve the differences, so they were forwarded to the COP President to be dealt with at a higher political level. The Presidency held informal, closed consultations on DSI and resource mobilization with regional groups individually on 31 October before producing the President’s text.

Observers noted with concern this new trend at the CBD, which begun at COP15, where Presidency consultations and texts take over from more transparent and inclusive text-based negotiations at the Contact Groups.

The President’s text on resource mobilization contained the draft decision and a clean version of the revised strategy on resource mobilization in an Annex I, with a call for its regular review at each meeting of the COP, starting with COP17 in 2026.

However, on the question of the dedicated fund, many developing countries found the text deeply disappointing. There was essentially a continuation of the status quo, with only an initiation of an intersessional process to, inter alia, take a decision on a dedicated global financing instrument for biodiversity at COP17.

This decision would be facilitated by the Subsidiary Body on Implementation (SBI), in light of an assessment of options to close the biodiversity finance gap through mobilizing resources from all sources and instruments, an assessment of the effectiveness of the GEF and consideration of elements for its reform, and consideration of the modalities of the best possible instrument on biodiversity finance.

The Annex containing the clusters, in particular the one detailing the criteria relevant to the design of the dedicated global instrument for biodiversity finance, was not included. These criteria had set out some key principles that developing countries considered essential for the dedicated fund.

The SBI recommendations have been forwarded to COP17 for further consideration.

Final draft decision changes course

Heads of delegations met to discuss the President’s text for most of 1 November. At about 3.30am on 2 November, the President’s text on DSI and resource mobilization were released as L. documents (final draft decisions with limited distribution).

Clearly after much pushback from developing countries, the L. document on resource mobilization (CBD/COP16/L.34) included language establishing the dedicated biodiversity financing instrument, accompanied by an intersessional process for the determination of its modalities by COP18 in 2028.

Paragraph 19 states: “Decides to establish a dedicated global financing instrument for biodiversity to receive, disburse, mobilize and articulate funding from all sources, under the authority of the Conference of the Parties and to make it fully operational by 2030”.

The modalities identified included the instruments’ governance arrangements, structure and operational arrangements. In a nod to developed country demands, it also included the relationship with existing financing mechanisms, and whether these could play a role in the global instrument, and its role in fostering coordination and complementarity across the biodiversity finance landscape.

The next SBI meeting (SBI6) is tasked to finalize the criteria for the development of the global instrument on biodiversity finance. These criteria, lost from the earlier President’s text, are now restored as Annex II C. Based on these criteria, SBI7 is to then consider the modalities, and report to COP17.

SBI7 is also tasked to review the strategy for resource mobilization, contained in Annex I, which is substantively unchanged from the previous version.

In addition, SBI7 should review opportunities to strengthen tracking of the various sources of finance to enhance understanding of and transparency around the state of progress in resource mobilization, assess the effectiveness of the GEF and prepare recommendations for its reform, and discuss opportunities for broadening the contributor base. The latter is a key developed country demand.

COP18 is also requested to define the transitional arrangements from the GBFF to the dedicated global financing instrument, unless Parties decide otherwise. Finally, COP19 is requested to reach a conclusion with regard to the designation of the operating entity or entities of the financial mechanism of the Convention.

Developed countries reject deal, leading to suspension

On the morning of 2 November, after the watershed adoption of the DSI decision, the plenary considered the resource mobilization L. document. The COP16 President asked Parties if the document could be adopted as a whole.

Zimbabwe, spokesperson of the African Group on the issue of resource mobilization, proposed the adoption of the text as it was.

Tanzania followed by exclaiming “What a time to be alive”! as 31 years after the entry into force of the CBD, it was on the verge of finally living up to its founding articles which require a financial mechanism under the authority of the COP. It lauded the bold move to establish a dedicated global financing instrument for biodiversity, which it said would provide the impetus to move from talk to action.

However, the European Union (EU) and its member states categorically stated that it could not accept the proposed decision. Neither could it accept the establishment of a new ODA-based fund. It was not ready to adopt such a strong decision that established a global biodiversity financing instrument, rather than initializing a process to assess the feasibility, need and added value of such an instrument.

(The CBD is explicit that the financing obligations are “new and additional”, not ODA.)

Switzerland quickly aligned itself with the EU, indicating that it was not willing to compromise on the issue and that the new version of the text was not acceptable. It could not, at this stage, accept adoption of the funding decision, but signalled that it could accept a future decision on adopting the instrument.

South Africa reminded the plenary that at COP15, the African Group had already settled for the compromise of the GBFF, which is an interim mechanism. It recalled provisions of the Convention which call for a financial mechanism under the authority of the COP. More than 30 years later, there is still no dedicated fund for the CBD. As Africa, they therefore agreed to the “groundbreaking” decision and supported its adoption.

Egypt and Zambia, in later interventions, aligned themselves with the unified African position and also called for the adoption of the document.

Other developed countries such as Australia, Canada, Japan, New Zealand and Norway separately echoed the EU and Switzerland. They largely expressed preference for the earlier President’s text which only outlined a process towards, inter alia, consideration of a dedicated biodiversity financing instrument.

Bolivia supported the President’s proposal. It said this would avoid the “chronicle of a death foretold”, as biodiversity would not be protected if there are no financial resources, the provision of which, under the Convention, is the responsibility of developed countries. The establishment of the dedicated fund would guarantee public resources to support developing countries in their implementation of the KMGBF.

In a forceful intervention, Brazil called out the developed countries for judging developing countries for what they do not do to protect biodiversity, but that is “the level of implementation that we can afford”. It supported the proposal to create a financial instrument and provide for intersessional discussion under a structured process.

Brazil recalled that Parties have been waiting for the financial mechanism promised by Article 21 since COP1. It considered the process set out in the document as the first step to achieving this and recalled that the rationale lies in paragraph 4 of Article 20.

(Article 21 stipulates that there shall be a mechanism for the provision of financial resources to developing country Parties for purposes of the Convention. Paragraph 4 of Article 20 states that the extent to which developing country Parties will effectively implement their commitments will depend on the effective implementation by developed country Parties of their commitments related to, inter alia, financial resources.)

Brazil questioned the lack of legitimacy in discussing such an important issue at the end of the COP, rather than at the beginning. It called for decisions to guarantee ambitious means of implementation, so that implementation can actually happen.

Brazil deeply regretted the refusal on the part of the developed countries to even discuss a global financial instrument for biodiversity, or to find compromise. “My delegation is not ready to discuss anything else, until we have a solution for this”, it said.

Fiji, which had been speaking on behalf of the Pacific small island developing states present at the COP, lamented that unfortunately, it was the only remaining Pacific island country still present in the room. It reiterated support for the document.

Panama then asked whether there was an adequate number of Parties present to take decisions, in accordance with the rules of procedure.

As a further intervention was taken, Brazil raised a point of order and called for the determination of quorum, as requested. It said that it would not abide by any proceedings until this point of order was addressed.

Given that there was no quorum, the COP16 President then suspended the meeting.

Remaining decisions, including on the budget of the CBD Secretariat and expenses necessary for the implementation of the KMGBF, have therefore not been adopted.

It appears that developed countries’ refusal to consider a dedicated fund to help finance biodiversity action in developing countries has only widened distrust and delayed progress on implementation. - Third World Network