Other issues / International climate finance

High and dry: finance is crucial to successful negotiations at the 2022 UN Biodiversity Conference

International financial contributions are also scarce for biodiversity conservation. Photo: Ralph Frank/WWF

Just as with international climate finance, financing is a crucial issue in the negotiations on the Convention on Biological Diversity. In a guest post on www.deutscheklimafinanzierung.de, Florian Titze of WWF Deutschland explains the issues that need to be resolved in 2022 for the upcoming UN Biodiversity Conference and what they mean for German politics.

As of June 2022, the UN Convention on Biological Diversity (CBD) is due to receive a new policy framework – a global plan for nature to halt and reverse biodiversity loss – at the UN Biodiversity Conference (COP15) in December 2022. The nearly 200 signatory states will meet in Montreal, Canada, to define the necessary measures and targets, decide on the implementation mechanisms, and last but not least, agree on the financing this will require. The latter may sound trivial, but it has long been a crucial issue in the reality of the CBD negotiations. All countries agree that more resources are urgently needed to ensure that a new agreement is not only a fair deal but can actually be implemented successfully. However when it comes to specific commitments and figures, traditional donor countries on which international financing has heavily depended so far, such as Germany, France and the United Kingdom, suddenly seem rather reluctant. This weighs heavily on the negotiations. Everyone knows that the international community completely missed the Aichi Targets for biodiversity adopted in Japan in 2010, not least due to the lack of funding.

Biodiversity, species diversity, nature – these different terms basically mean the same thing: the web of life on which we all depend. Without functioning ecosystems, we would have no air to breathe, no clean water to drink, no food on our plates – and ultimately no long-term prosperity and no sustainable economic development. The World Economic Forum estimates that approximately 44 trillion US dollars – more than half of global GDP – depends on services that nature and biodiversity provide. Saving nature is thus not only “a task for humanity and an ethical obligation” as stated in the coalition agreement of the current German government, it also makes economic sense.

Originally, 2020 was to have been the “super year” for nature. Major political moments, such as the UN Biodiversity Summit in September of that year, as well as COP15 in China, originally planned for October 2020, were to have set a new course for our relationship to biodiversity. After repeated delays in negotiations due to the covid pandemic, the current plan is to adopt the new agreement in December 2022, on the final day of COP15. Before this can take place, however, a number of preliminary negotiations have been necessary to bring the hitherto still very divergent ideas of the signatory states closer together. The consensus reached at COP15 can only be shaped into a joint agreement supported by everyone if the most important issues have been agreed upon in advance. The last rounds of negotiations in March and June 2022 – with the former being the first to take place in person after more than two years – showed that that is still a long way off. The result of the negotiations was not encouraging: There was virtually no substantive progress on key issues, a lack of mutual trust, too little willingness to compromise, and above all: fundamental disagreement on the issue of financing.

The elephant in the room – development finance

When it comes to money and biodiversity, the international community faces a huge challenge. While official development assistance (ODA) provides the greatest political capital in the negotiations, the overall solution required is more complex. Subsidies that are harmful to nature must be reduced and redirected – Germany alone pays around 68 billion euros per year in government subsidies for economic activities that harm the environment –, financial-sector reforms for a sustainable financial market that no longer invests in the destruction of the natural world must be initiated, and national financial plans must guarantee more efficient handling of biodiversity finance and better policy coherence with CBD-targets in all countries.

Despite the huge challenge of harmful financial flows, one issue is shaping the CBD negotiations more than any other: As in many of the international negotiations in which decisions on how to solve long-term ecological crises must be made by a great number of highly diverse countries, the question of money – development financing – is often decisive. Consensus is only possible once concessions are bought with hard currency. For the CBD, this reality is even enshrined in the text of the Convention. Article 20 stipulates that the implementation of the agreed measures by the developing countries depends on the financial, technical and technological support provided by the “developed” signatory states. Article 20 was a basic political prerequisite for the creation of the CBD in 1992, at the birth of the three Rio Conventions during the Conference on Environment and Development in Rio de Janeiro.

The background to this agreement also reflects that most of the biodiversity rich areas still remaining on our planet today – including the biodiversity hotspots – are located in poorer countries of the global South. Most Western industrialized nations destroyed most of their “own” nature almost completely in the course of their development. In Germany, for example, protected wilderness areas amount to a mere 0.6 percent of the country as a whole. Worldwide, populations of mammals, birds, fish, reptiles and amphibians have dwindled by an alarming 68 percent since 1970. With the rapid destruction of ecosystems and biodiversity, the cost of preserving them is also rising. The fact that countries are doing nothing in the face of the greatest ecological crisis of our time next to climate change is making the political solution for the urgently needed turnaround increasingly difficult.

At the 11th Conference of the Parties in Hyderabad in 2012 (COP11), countries already agreed to double international funding for developing countries. But how much money is that? Little reliable data is available. The OECD estimates a total of 78 billion to 91 billion dollars per year. However, only a fraction of this comes from international public funds under Article 20 – only 3.9 to 9.3 billion per year. The wide range of the estimate is due to the different definitions of biodiversity funding, depending on whether biodiversity is the primary or secondary objective of a project. About 67.8 billion originates from national budgets and 6.6 to 13.6 billion from private funding. In the context of the far-reaching measures needed to preserve biodiversity, this is far too little.

Is Germany doing enough to contribute to success at COP15 in Montreal?

Are the pieces now in place for a groundbreaking international agreement for biodiversity à la Paris? The current global situation and weakening multilateralism are also casting their shadows on the biodiversity negotiations. Nevertheless, such a Paris moment would be possible if the issue of biodiversity had a political significance appropriate to the crisis, especially in Western countries like Germany. When it comes to international money, however, the advocates of biodiversity conservation are competing not least with their colleagues who are committed to climate protection due to a lack of political will to invest enough in both – this despite the fact that we are experiencing twin ecological crises, with the climate crisis being one of the biggest direct drivers of biodiversity loss and ecosystem degradation. Conversely, ecosystems absorb and store vast amounts of CO2, stabilize the (local) climate and are the basis for effective adaptation strategies. Biodiversity and the climate are interdependent and can only be saved together.

This is another reason why the CBD negotiations are already on the brink with regard to financing. Some countries of the global South, such as Brazil, make virtually every section in closed text negotiations directly dependent on the financial support to be provided in return. After all, they state, the implementation of ambitious measures such as the protection of 30 percent of the land and sea area, which is to be enshrined in one of the targets, will not be possible without solidary-based aid in the form of development finance. While some of the demands, some of the figures in particular, from the global South are unrealistic and unconstructive, in part they are justified. Thus, two extremes have formed that are beyond the spectrum of consensual outcomes. So far, there is no sign of a mutual rapprochement, as Germany and the EU have not shown any signs of flexibility on financing. This needed flexibility is also often beyond the mandate of the negotiators in the room, since ultimately it is the finance ministries, who decide over budgets.  The consequence: a standstill. What is missing is a positive expectation for concessions. There are no political or diplomatic signals that any increase in funding can be expected, no matter how many concessions would be made in return. The only message – from Germany and elsewhere – is currently: “We have no money for biodiversity.”

This lack of expectation is also reflected in Germany’s federal budget for 2022. Despite the coalition agreement’s stated intention to “significantly increase the financial commitment to implement the global framework,” there is no indication of the planned increase in the current budget. Germany is one of the largest donors of financial aid for biodiversity, along with France and the United Kingdom. Germany’s hesitation has therefore further damaged a relationship of trust, especially with African nations, that has been crumbling for some time. Without a strong signal from the government that Germany can be relied upon in the global South to jointly tackle the huge challenges in biodiversity protection, the outcome in Montreal will not be the desired “Paris moment”, but rather the dreaded “Copenhagen moment”, referencing the spectacularly failed climate negotiations there in 2009. Given the failure of international biodiversity policy in recent decades, only a large increase in international biodiversity funding can be considered an appropriate signal.

If this increase fails to materialize, Germany will risk not only a successful global agreement at COP15, but also its own reputation as a reliable global partner and its political credibility in environmental diplomacy. A trip by Federal Minister Steffi Lemke to the conference in Canada could end in a regrettable embarrassment. Germany currently provides an estimated 800 million euros annually to international biodiversity funds. German environmental organizations are calling for an increase to at least two billion euros per year by the end of the current legislative period. Despite all the challenges, an increase to at least one billion euros per year in the 2022 federal budget would be an important step in the right direction and a hugely important signal for the upcoming COP15.

Guest post by Florian Titze, international policy expert at WWF Deutschland.