TWN Info Service on Biodiversity and Traditional Knowledge (Mar25/01)
14 March 2025
Third World Network

CBD: Resumed COP16 resolves deadlock, takes long overdue decision on financial mechanism

London, 14 March (Lim Li Ching) – Parties to the Convention on Biological Diversity (CBD) have decided to establish the permanent arrangement for the CBD’s financial mechanism, for the provision of financial resources to developing country Parties.

They also established an intersessional process to do so, based on an initial roadmap that lays out the tasks that need to be accomplished by the Conference of the Parties (COP) at each of its successive meetings to 2030.

This decision was taken at the second resumed session of the sixteenth meeting of the COP (COP16), held in Rome from 25-27 February 2025, following the suspension of COP16 in Cali, Colombia.

(The first resumed session of COP16, to approve the budgets of the Convention and its Protocols, was held online in December 2024 to enable the Secretariat to continue to function.)

The adoption of the decision, under the agenda item on “resource mobilization”, laid to rest the ghost of COP16, which was abruptly suspended in the early hours of the morning of 2 November 2024, due to a lack of quorum as the meeting went overtime and many delegates had to leave already. The suspension followed fractious talks that laid bare North-South divisions, over whether to establish a dedicated instrument on biodiversity finance, as the vehicle through which finance obligations are delivered. (See Biodiversity finance discussions suspended on knife edge, 8 November 2024.)

The February decision recognizes that the operation of the financial mechanism can be entrusted to “one or more entities, new, reformed or existing”. This leaves the door open to the establishment of a dedicated fund for biodiversity finance, under the authority of the COP, which has long been the call of developing countries. (See Developing countries, in show of unity, call for new biodiversity fund, 13 December 2022.)

Article 39 of the Convention made the Global Environment Facility (GEF) the interim institutional structure for the financial mechanism set up in Article 21. However, there have been decades-long issues with the GEF’s governance arrangements and operations that make it inequitable and difficult for developing countries and rights holders to access funds.

The interim arrangements were meant to be in place from the entry into force of the Convention until COP1, or until the COP decides which institutional structure will be designated in accordance with Article 21.

COP1 decided that the GEF shall continue to serve this role and this was reaffirmed by COP2. Successive COP have never taken a decision on the designation. Until now. It has been more than 30 years of this “interim” arrangement, with the Convention having entered into force on 29 December 1993.

Context matters

Other sections of the resource mobilization decision remain unchanged from Cali, including the revised strategy for resource mobilization (2025-2030), which has now been formally adopted. The strategy is seen as pivotal to the financial resources targets of the Kunming-Montreal Global Biodiversity Framework (KMGBF), to provide the means of implementation, without which the KMGBF’s targets would be unachievable.

Target 19 of the KMGBF sets a resource mobilization goal of at least US$200 billion per year by 2030, with subparagraph (a) calling for an increase in total biodiversity-related international financial resources, including official development assistance (ODA), to developing countries, to at least US$20 billion per year by 2025, and to at least US$30 billion per year by 2030.

These quanta were not up for negotiation, having been agreed in 2022, although the failure thus far to meet the targets continues to generate extreme disappointment among developing countries, as well as a lack of trust. (See Like-minded developing countries call for equity and ambition in biodiversity finance, 8 November 2024.)

Article 20 of the CBD clearly articulates the differentiated responsibilities of developed countries to provide financial resources to developing countries, so that the latter can implement their commitments. This differentiation is an acknowledgement of the historical exploitation of resources since the colonial era that led to unequal accumulation of wealth in the North, with continuing natural resources extraction from developing countries that destroy biodiversity while providing low value addition to those countries.

Parties had also gathered in Rome under a cloud of geopolitical uncertainty engendered by the new administration in the United States. While the United States is not a Party to the CBD, it regularly attends the meetings, often indirectly influencing CBD negotiations. This time, no representatives showed up.

Leadership emerged from the BRICS countries which forged a compromise based on their alternative text proposal (BRICS is the acronym for the group of countries comprising Brazil, Russia, India, China and South Africa, with new members Egypt, Ethiopia, Iran, United Arab Emirates, and most recently, Indonesia. Brazil is currently the chair of BRICS in 2025.)

Evolution of texts from Cali to Rome

At COP16 in Cali, after the Contact Group had exhausted discussion on the dedicated instrument, the issue was taken up by the COP Presidency in informal, closed consultations with regional groups. The President’s text on resource mobilization, released on the scheduled last day of COP16 (1 November 2024), had maintained 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 was unacceptable to developing countries.

Heads of delegations met thereafter, and at 3.30am on 2 November, an ‘L’ document (final draft decision with limited distribution) (CBD/COP16/L.34) was released. This time, there was language establishing the dedicated biodiversity financing instrument at COP16, with an intersessional process for the determination of its modalities by COP18, and full operationalisation by 2030.

While this was welcomed wholeheartedly by developing countries, developed countries rejected the deal, leading to the eventual suspension of the meeting when developing countries pushed for a quorum call.

Between the Cali and Rome meetings, the COP16 President, Susana Muhamad, Colombia’s Minister of Environment, conducted informal consultations, including at regional and ministerial levels, on the most contentious paragraphs of L.34 (paragraphs 19-25) and the associated Annex II, on which the Cali meeting failed to reach agreement.

She issued a reflection note providing an overview of the state of affairs, including where there was convergence. She also laid out possible building blocks for consensus, and provided recommendations on the way forward. A revised version of the reflection note, issued on the Friday before the Rome talks commenced, contained textual suggestions for paragraphs 19-25 in an Enclosure  (CBD/COP/16/INF/43/Rev.1).

The President’s text proposals essentially tried to bridge the differences between developed and developing countries, by broadening the scope of the paragraphs in question, away from the focus on the dedicated instrument, to one that would enhance the current “global biodiversity finance architecture”.

The dedicated instrument would be one plank of this, considered alongside existing instruments. Furthermore, the text broadened the options so as to not pre-judge outcomes, with possible designation or establishment of a dedicated global instrument, or set of instruments. This will be only at COP18 (2028), with a view to full operationalization at COP19 (2030).

This shift in framing was also reflected in how criteria were addressed. L.34 had an Annex IIC, which compiled a detailed list of possible criteria for the development of “an instrument on biodiversity finance”. In the President’s proposal, Annex IIC was removed, and instead, much streamlined and more general high-level criteria to “further improve the financial architecture” were worked into an operative paragraph.

The reflection note further laid out intersessional work based on a roadmap, with varied tasks to be achieved at, or by, COP17, COP18 and COP19.

Stark divergences, informal mode

On 25 February 2025, the resumed COP16 picked up from where the Cali talks had left off.

Apart from resource mobilization, there were several other draft decisions crucial to the implementation of the KMGBF that were not adopted at COP16 due to its suspension. This included a decision on the monitoring framework with its indicators for tracking progress in KMGBF implementation, and a decision on mechanisms for planning, monitoring, reporting and review.

In addition, a draft decision on the financial mechanism was viewed as closely linked to resource mobilization.

As such, the COP16 President indicated that substantive discussions would begin with resource mobilization, followed by a specific sequence of consideration of the other items. However, going by the principle that “nothing is agreed until everything is agreed” and given the strong interrelationship among the decisions, she proposed that the plenary would agree on text on each item as much as possible, approve the amendments, but only adopt the final decisions together at the end of the meeting.

Thereafter, many developing countries, including Brazil on behalf of the Like-Minded Megadiverse Countries (LMMC) and on behalf of the BRICS countries, Zimbabwe for the African Group, and Fiji for the Pacific Small Island Developing States (P-SIDS), took the floor to strongly reiterate support for the elements in L.34.

These included: the decisive establishment at COP16 of the dedicated instrument under the authority of the COP, with a clear roadmap and intersessional work to operationalize it; reinstatement of the criteria in Annex IIC as these were seen as essential to the crafting of the dedicated instrument; and reiteration of the financial resources provision targets of the KMGBF and the urgent need to meet these, in order for implementation to occur.

Many developing countries also pointed to the difficulties they faced in accessing funds, with some calling for direct access modalities so that they could access funds without having to go through intermediaries, as is currently the case with the GEF. Bolivia and Panama added that indigenous peoples and local communities should also be able to access funds directly.

Developed countries, including the European Union, the United Kingdom, Norway, Japan, Australia, New Zealand, Switzerland and Canada, largely supported the reflection note. They reiterated the centrality of mobilizing funds from all sources, and the need to “broaden the contributor base”.

The discussions then moved into closed, informal consultations, at Ministers/heads of delegation level, plus one other. These consultations led to a revised L.34 document (CBD/COP/16/L.34/Rev.1), which was introduced at an evening plenary on 26 February.

Developing countries, particularly from the African Group, were deeply disappointed with the revised document. They called for a clear decision on the establishment of the dedicated instrument, with no more delays or a roadmap that only fuels prolonged discussion.

One issue would prove pivotal to providing clarity for the compromise going forward. China pointed out that the approach taken had mixed two elements – how to mobilize resources, including through the revised strategy for resource mobilization, and how to deal with the dedicated instrument. In this regard, China stated that the criteria dealing with biodiversity finance were not the specific criteria for the instrument. These sentiments were echoed by Cuba and the Russian Federation.

Following these first reactions, some fractious responses, and strong pleas for more time for regional groups to consult on the revised text, the COP16 President asked groups to consult further and bring their views the next morning.

Dual-track approach

On the last day of the meeting (27 February), the COP16 President reminded Parties of what was at stake – agreement on resource mobilization would give “arms, legs and muscles” to the KMGBF and facilitate the adoption of the other decisions. Otherwise, there would be an important policy without the means of implementation, and all the work from 2022 (when the KMGBF was adopted) would be lost.

She indicated that the work ahead would be to chart parallel, but distinct, tracks: how to improve finance for biodiversity, and what institutions are needed. She drew on a metaphor expressed by the Democratic Republic of Congo – that we are discussing how to bring the food (resources) to the table, but that we also need the plate (institutions) for the food.

Zimbabwe, for the African Group, reiterated that Article 21 should be operationalized as soon as possible, with a roadmap that helps get there, alongside clear criteria and modalities.

Brazil, speaking on behalf of the BRICS countries, introduced an alternative proposal, which comprised two workstreams: addressing the “global biodiversity finance gap”, and fully implementing Article 21, by assessing and improving the mobilization of finance from all sources and performance of existing instruments, and establishing the permanent arrangement for the financial mechanism, respectively.

These goals, actions to meet the goals, and a roadmap to COP19 were distinctly articulated for each workstream, with an attempt to balance both workstreams. The endpoints would be essential; as Brazil remarked, we’re “running a marathon but not on a treadmill”.

Brazil also recalled that there is an important Annex from Cali (that contains the possible criteria for a dedicated instrument).

Jamaica, speaking on behalf of the Latin American and Caribbean Group (GRULAC), Cambodia, on behalf of the Asia-Pacific Group, and Fiji, on behalf of the P-SIDS, reiterated support for the two-track approach and specific criteria for the dedicated instrument.

Following further interventions, the COP16 President tasked up to five representatives from each negotiating and/or regional group to work on and bring a revised draft decision to the evening plenary.

After six hours of intense closed negotiations, a representative of the Presidency, who facilitated the informal group, presented a non-paper, containing only one pair of remaining brackets. He confirmed that the BRICS proposal had been the basis of negotiations.

The compromise that was brokered largely kept the structure and content of the BRICS proposal, with the dual-track approach. The two workstreams were clearly set out as distinct but interrelated pathways, each comprising broad guiding criteria and with roadmaps that set out clear tasks for successive COPs.

The remaining brackets were in a paragraph containing broad criteria for the institutional structure operating the financial mechanism. The criterion in question stated that the entity: “is accessible by all eligible country Parties of the Convention [in a fair, timely, simplified, equitable, inclusive, and non-discriminatory manner]”.

Developing countries called for the brackets to be lifted, while the EU preferred the deletion of the text in brackets, claiming that this would be the prerogative of the relevant governing bodies of the financial instruments, as it relates to their authority and autonomy.

Brazil stressed that this idea unites the developing world and countered the EU sharply, asking if the entity to the financial mechanism of the Convention should instead have “unfair, delayed, complicated, unequal, exclusionary and discriminatory” practices.

The EU also asked for the deletion of a subparagraph asking the Executive Secretary to commission a study benchmarking the GEF against other financial mechanisms of relevant multilateral environmental agreements, noting that this could be taken up in the decision on the financial mechanism. This was opposed by Brazil, which cautioned against reopening agreed text in what was now a carefully balanced, negotiated package.

The COP16 President then undertook consultations to resolve the brackets, and a L.34/Rev.2 document was produced. Sources told Third World Network that there was willingness to lift the brackets, if the GEF benchmarking study was dropped.

At 10.40pm, L.34/Rev.2 was reissued for “technical reasons”, and the plenary reconvened. The document no longer had brackets, and the text was retained. The Secretariat further explained that the paragraph on the GEF benchmarking study was moved from the decision on resource mobilization to the decision on the financial mechanism. Likewise, the associated Annex IIB on the assessment of GEF effectiveness and possible elements for its reform, was also moved.

The resource mobilization decision was then adopted to applause, followed by adoption of the decision on the financial mechanism. With resolution achieved on these difficult issues, the other decisions, including on the monitoring framework and on planning, monitoring, reporting and review, were also adopted.

The plenary closed at around 1.40am on 28 February.

Compromise reached, but difficult fights ahead

Despite the clear divergence between developed and developing countries at the start of the meeting, the mood in Rome, perhaps aided by the need to respond to the current geopolitical environment and the concerted efforts by the COP16 Presidency to bridge the differences, appeared to be more conducive to achieving consensus.

“Multilateralism works” was an oft-repeated phrase heard at the end of the meeting, as was sincere appreciation for the COP16 President. Although she had resigned as Minister of Environment of Colombia just before the resumed COP, on a matter of principle with regard to national politics, she stayed on as COP16 President to shepherd the Rome talks through.

The COP16 decision on resource mobilization is indeed a long overdue decision establishing the permanent arrangement of the Convention’s financial mechanism. While the operation of the financial mechanism could be “entrusted to one or more entities, new, reformed or existing”, importantly, it has to fulfil at least the following criteria:

“(a) It functions for the purpose of implementing the Convention and its Protocols,

(b) It is under the authority and guidance of, and accountable to, the Conference of the Parties.;

(c) It operates within a democratic and transparent system of governance, ensuring a structure that is fair, equitable, inclusive, efficient and representative;

(d) It is accessible by all eligible country Parties of the Convention in a fair, timely, simplified, equitable, inclusive, and non-discriminatory manner”.

Moreover, these criteria are to be developed further by COP17, “taking into consideration the compilation of views contained in Annex II”. This is the former Annex IIC that developing countries had fought to retain, which had specific criteria for the dedicated instrument. Any GEF reform as a result of the review of its effectiveness, should also be benchmarked against the COP17 criteria.

COP18, scheduled for 2028, is to then decide on either to establish a new entity to operate the financial mechanism, either by itself or alongside an existing entity or entities, or to confirm an existing entity or entities in that role.

If a new entity is decided upon, as long called for by developing countries, COP18 is to establish an intersessional process to develop its terms of reference and modalities, on the basis of the criteria developed at COP17. The new entity should start operations by COP19.

COP18 is also to “[a]ct upon the stocktake review on the operations and performance of the Global Biodiversity Framework Fund, as already mandated by decisions 15/15 and 15/7”. This Fund, set up to finance the KMGBF as a compromise at COP15 when developed countries refused to establish a dedicated fund, has, unless otherwise decided by the COP, a sunset clause to 2030. Transitional arrangements would be needed in that case.

Considering the above, COP19 “shall determine the institutional structure permanently operating the financial mechanism”.

At every step of the way, there will no doubt be more disagreements to come and much effort will be needed to shape the outcomes well, particularly the criteria that will characterise the new entity. But at least, after three decades, the decision finally sets into motion and locks in the pathway for completing the unfinished business of the Convention with regard to its financial mechanism. +