The thorny issue of who should manage global biodiversity funds, and how, has resurfaced at the ongoing COP16 in Colombia, with observers saying the ability of negotiators to find a compromise will have a major bearing on whether the talks will be able to move the implementation of the Global Biodiversity Framework (GBF) forward.

Money was put on the agenda by Colombian COP President Susana Muhamad on Day 1 of the Cali talks, and as soon as negotiators gathered in their working groups, discussion moved to the biodiversity convention’s financial mechanism and whether it should be reformed or replaced entirely.

The issue is not a new one, but has become more prominent after the 2022 Montreal COP agreed to the GBF and to set up a fund to which the Global North has promised to pay $20 billion by next year and $50 bln by the end of the decade.

At the heart of the issue is the Global Environment Facility’s (GEF) role as the administrator of the finance mechanism as well as the GBF Fund (GBFF), which went live earlier this year.

Through the GBFF and the GEF Trust Fund, the agency doles out funds on the basis of rules and regulations primarily set by donor countries.

However, a large number of recipient nations have long complained that the process is slow and lacks transparency, with little say for the Global South on how the money is spent or who gets to spend it.

“They want more transparency and to decide for themselves how to spend the money in accordance with their national targets,” Nina Mikander, global director of policy with NGO Birdlife International, told Carbon Pulse.

To achieve that, they want a new mechanism managed by someone who isn’t the GEF under a framework that gives greater influence to countries hosting the activities funded.

Donor countries, meanwhile, have a clear preference of keeping things largely the way they are, though reforms of the way GEF operates have been implemented, and more is likely on the way.

OPENING SALVO

Right from the outset in Cali, several developing countries raised the issue, according to the Earth Negotiations Bulletin (ENB), the IISD publication that gets access to UN negotiations well beyond what regular reporters do.

India and Bangladesh both said a more transparent and inclusive mechanism is called for, the Democratic Republic of the Congo said GEF should not be the exclusive mechanism for financing biodiversity conservation funding, and South Africa and Colombia argued the GBFF is insufficient, according to ENB.

The GBFF mandate requires the new fund to operate in a more transparent manner than GEF has in the past, and according to Mikander, its first few decisions have included a broader base of stakeholders while also being carried out reasonably fast.

However, behind the recipient countries’ misgivings are other factors as well, including the lack of rich nations following up on their GBFF pledges so far.

While the Global North has promised to contribute $20 bln to the fund by the end of next year, less than $250 million has seen the light of day so far.

“It’s a bad start if we miss the first target [of the GBF],” Mikander said.

Some hold out hope that might be remedied next week, when some 100 ministers arrive for the high-level segment of the talks, but it remains uncertain whether that will happen.

“Are ministers going to make pledges when they come? Right now we don’t have any intelligence that they will,” said Mikander.

Even if they do, she was not convinced it would be enough to overcome the split, given it is a longstanding issue with a lot of grudges.

“Some countries are not going to settle for no text on a new fund,” she told Carbon Pulse.

One potential compromise in Cali, according to Mikander, could be to agree on continuing to improve the GBFF until 2030, when its current mandate ends, while at the same time beginning discussions about a potential new fund to replace it at that time.

At COP15 in Montreal it was decided that the finance mechanism would be brought up for discussion and review at COP17, which will be held in 2026.

NO GUARANTEE

Lina Barrera with Conservation International’s global policy and governmental affairs division agreed on the need for more funding, but warned that replacing the current mechanism might not necessarily give developing countries what they want.

“Historically, establishing new funds has not been fast, and it does not always lead to funds,” she told Carbon Pulse on the sidelines of the talks.

A broader perspective might be more helpful in order to address the finance issue.

“$20 billion is not going to be enough regardless,” she said.

“We must figure out other pieces of the puzzle. Harmful subsidies is a big one.”

In the GBF, countries pledged to do away with $500 bln worth of harmful subsidies annually by 2030.

Little progress has been reported so far, though Barrera said she would reserve judgement until next year, when the first official review will be ready.

“What we need is high-level politicians’ attention on this,” she said.

“If we can get that, we can probably get some kind of agreement”.

Barrera said she was erring on the side of optimism about the outcome in Cali, but stated that without an agreement there might be a drop-off in effort levels across the board, including on nature-related target-setting, which has already been watered down somewhat.

DSI CALI

Although not directly related, difficult discussions on a potential new fund related to Digital Sequence Information (DSI) are spilling into the mechanism talks, making it more complex.

DSI refers to genetic resources stored in databases that corporations in industries like pharma and agribusiness use for new product development.

The idea is that those who profit from the data should pay into a fund, with that money going to biodiversity conservation action in the areas that provided the genetics in the first place.

Many are optimistic that a DSI fund could raise significant funds – not least money that would be additional to the pledged $20 bln from governments.

There are a lot of sticky issues to sort out before such a fund might be established, including whether it should be mandatory or voluntary, and whether developing countries should be the only recipients or if it might also go towards Global North locations.

“DSI has potentially significant sums of money,” said Jeremy Eppel with NatureFinance.

It might be a separate funding mechanism or linked to the GBFF, it could be project-based or based on biodiversity levels.

“Discussions between [DSI and the GEF finance mechanism] are going on in parallel settings, but there is definitely feedback between the two,” he told Carbon Pulse.

“I think there will be a deal for both of them in the end, not one or the other.”

Eppel said issues on other financing instruments such as debt-for-nature swaps, payment for ecosystem services, and biodiversity credits are also gaining a lot of traction in Cali, and not only among observers.

“Negotiators are alert to, and in some cases very interested in, the instruments,” he said. “They are getting real traction in many countries.

By Stian Reklev in Cali – stian@carbon-pulse.com

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