TWN Info Service on Finance and Development (Jun24/02)
5 June 2024
Third World Network

CBD: Developing countries decry broken promises on financial resources

London, 5 June (Lim Li Ching) – As the first deadline for the financial resources target of the Kunming-Montreal Global Biodiversity Framework (KMGBF) looms, developing countries have come away from negotiations under the Convention on Biological Diversity (CBD) visibly frustrated.

Target 19(a) of the KMGBF calls for “Increasing total biodiversity-related international financial resources from developed countries, including official development assistance, and from countries that voluntarily assume obligations of developed country Parties, to developing countries, in particular the least developed countries and small island developing States, as well as countries with economies in transition, to at least $20 billion per year by 2025, and to at least $30 billion per year by 2030”.

This is a critical part of the overall Target, to substantially and progressively increase the level of financial resources from “all sources”, by mobilizing at least $200 billion per year by 2030.

Given that the KMGBF was adopted in December 2022, developing countries were asking themselves where the promised levels of financing were, which would amount cumulatively to $40 billion by 2024, and $60 billion by 2025.

The other key demand of developing countries was for the establishment of a dedicated Global Biodiversity Fund, under the authority of the Conference of Parties (COP). This was the final issue that was decided at COP-15 in 2022, with a compromise brokered that dangled the promise that it would be addressed intersessionally and brought to COP-16 for deliberation. COP-16 will be held in Cali, Colombia in October 2024.

On this, the promises of the developed country Parties were also broken, as they backtracked and stalled negotiations, refusing to seriously consider developing country Parties’ proposals to establish the Fund at COP-16.

Parties to the CBD met at the 4^th meeting of the Subsidiary Body on Implementation (SBI-4) in Nairobi, Kenya from 21 to 29 May 2024. The agenda item on resource mobilization was the most contentious and difficult issue.

Discussions were based on the recommendations of the Advisory Committee on Resource Mobilization (ACRM), established by COP-15, which had three elements to its mandate: (i) updating the strategy for resource mobilization adopted at COP-15, to fully align it with the KMGBF; (ii) exploring the current finance landscape with a view to assessing gaps and overlaps; and (iii) exploring proposals for a global instrument on biodiversity finance.

When the resource mobilization agenda was taken up at the plenary session on 22 May, many developing country Parties, in a show of force, took the floor to raise their concerns with the low level of financial resources provided thus far.

They were unequivocal that, without the necessary financial resources, this would jeopardise the implementation of the KMGBF – making the much-lauded Framework, in Togo’s words, “nothing more than a pipe dream”.

Zimbabwe, speaking for the African Group, further stated that this lack of progress would render the goals and targets “meaningless”.

Developing countries, where most of the world’s biodiversity lies, bear the burden of implementing action to address biodiversity loss. Developed country Parties, on the other hand, under the principle of common but differentiated responsibilities that is operationalized through differentiated obligations in Article 20 of the Convention, are obliged to provide the financial resources to enable developing country Parties to implement their commitments.

Jamaica, speaking on behalf of the Group of Latin America and the Caribbean (GRULAC), reiterated the provisions of the Convention that clearly state that the extent to which developing country Parties will implement their commitments depends on the effective implementation by developed country Parties of the provision of the means of implementation.

Many developing country Parties, in addition to the African Group and GRULAC, noted the large gap between reality and the figures set out in Target 19(a) of the GBF. As Brazil said, “Our needs are in the scale of billions, but cooperation comes in the scale of millions”.

They called for urgent increase in resources to be provided by developed countries so that the Target would not be missed. These included Brazil, China, Cuba, Democratic Republic of the Congo, Gabon, Guatemala, India, Indonesia, Kenya, Madagascar, Malawi, Nigeria, the Philippines, Seychelles, South Africa, Togo, Turkiyé and Tonga, speaking also on behalf of the Cook Islands, Fiji and Vanuatu.

Developed countries such as the European Union, on the other hand, felt that the 2025 target of at least $20 billion per year was within reach. They stressed the importance of mobilizing resources from “all sources”.

In particular, Norway called for “more countries to take up the responsibility to expand the donor base”. In this regard, it welcomed Grenada, who has expressed its intention to voluntarily assume the obligations of developed country Parties, in accordance with Article 20 of the Convention.

Australia, Canada and the United Kingdom were also quick to stress this point, as if to absolve themselves from their own legally binding obligations. And as if a tiny country like Grenada, with a GDP of $1.22 billion in 2022, could provide the billions that are not its responsibility, in the first place, to provide. By comparison, according to the World Bank, the GDP of Norway in 2022 was $579.4 billion, more than 470 times greater than that of Grenada in the same year.

On the issue of the dedicated Fund, Zimbabwe, on behalf of the African Group, called for the establishment of a dedicated Global Biodiversity Fund at COP-16 under the authority of the COP. This position was supported by many other developing countries, including the Democratic Republic of the Congo, Guatemala, Ethiopia, Kenya, Madagascar, Malawi, Moldova, Seychelles, South Africa, and Uganda. The Russian Federation also supported this.

These countries were of the view that the Global Environment Facility (GEF) was only an interim financial mechanism for the CBD, as spelt out in Article 39 of the Convention and in the Instrument for the Establishment of the Restructured Global Environment Facility. As such, they argued, the time is more than ripe for the establishment of a financial mechanism for the CBD, under the authority of the COP.

Brazil, along with others such as the African Group, the Russian Federation and Turkiyé, further spelt out the need for an inclusive intergovernmental process, such as an open-ended working group, to ensure further discussions based on a list of elements on a possible dedicated global instrument for biodiversity finance (Annex III of the ACRM recommendations), along with the criteria contained in Articles 20 and 21 of the Convention.

The developed country Parties, on the other hand, were not in favour of establishing a dedicated Global Biodiversity Fund, reiterating their view that the GEF was the financial mechanism of the Convention. Further, they were of the opinion that the Global Biodiversity Framework Fund, which was established under the GEF as part of the compromise brokered at COP-15 to finance the implementation of the KMGBF, was a good modality for this purpose.

The EU reiterated that it “has not identified any element that would support the need for a dedicated global instrument outside of the existing funding structures”. It therefore did not see added value in further discussions on a new instrument, nor for a dedicated process to do so, and proposed the deletion of Annex III. This position was broadly supported by Australia, Canada, Japan, Norway and Switzerland.

New Zealand alternatively suggested that the GEF’s Global Biodiversity Framework Fund be given time to deliver biodiversity outcomes, before re-opening discussions on a new financial instrument. A small minority of  countries such as Colombia, Costa Rica and Mexico forwarded a similar compromise position of continuing the dialogue as to whether the Global Biodiversity Framework Fund could become the dedicated fund, and postponing the decision on this in the meantime.

Given the divergence of views, a Contact Group was established, co-chaired by Salima Kempenaer (Belgium) and Shonisani Munzhedzi (South Africa). The Contact Group met four times over the course of the SBI-4 meeting, with an extra session scheduled after negotiations failed to move forward following the initially scheduled three sessions.

The Contact Group took up a non-paper prepared by the Co-Chairs, and planned to consider (i) the recommendations from the SBI, the recommendations on the revised strategy for resource mobilization and Annex I containing the revised strategy; (ii) the issue of the global instrument for biodiversity finance and the Annex III containing the list of possible elements; and (iii) the assessment of gaps and overlaps as conducted by a biodiversity finance landscape study commissioned by the CBD Secretariat and Annex II containing a non-exhaustive list of actions based on the study.

Nonetheless, it was clear from the outset that the negotiations would pivot on a few key contentious issues, namely that of the (lack of) provision of financial resources to developing country Parties, and the Global Biodiversity Fund. Developing country Parties were frustrated by the lack of serious consideration of their demands by the developed country Parties, and the perceived delay and obstruction on the latter’s part.

After four arduous sessions of the Contact Group, and two more versions of the non-paper, there was little to show. A large number of brackets remain in the text, with almost every paragraph of the draft decision of COP-16 either bracketed in their entirety or containing brackets, indicating both disagreements and issues that were not discussed due to a lack of time.

A series of options are now laid out, on the establishment (or not) of the dedicated biodiversity Fund, the substance of the intersessional process, and on the intersessional process itself. Essentially, everything is still on the table, with the polarized views all reflected.

One set of issues that was not discussed at the Contact Group, despite several Parties raising them at the plenary, was around the need to circumvent the embrace of private sector and blended financing, including market-based instruments (as part of the “all sources” mantra), with a concomitant need to assess their impacts on biodiversity, gender equality and human rights.

This is because there is acknowledgement that these measures may not actually result in biodiversity outcomes, or may have adverse impacts on indigenous peoples and local communities, women and youth. The ACRM recommendations were clear in this regard, and should be taken up accordingly.

The conference room paper (CRP) produced following the Contact Group deliberations was discussed on the morning of the last day of the meeting (29 May 2024). The SBI-4 Chair, Chirra Achalender Reddy (India), proposed that the document be adopted in its entirety with all the brackets remaining.

Following several statements, with developing countries expressing further frustration with the slow progress in the discussions on resource mobilization, and hope that this would be seriously addressed at COP-16, in equal measure, the CRP was forwarded as an L-doc for adoption. The L-doc was subsequently adopted without further discussion.

There will be a third meeting of the ACRM in Montreal in August 2024, immediately following the second meeting of the Ad Hoc Open-ended Working Group on Benefit-Sharing from the Use of Digital Sequence Information on Genetic Resources.

This is so that the ACRM can complete its mandate dealing with which funding mechanisms would be the adequate entity to receive and disburse the revenue generated by the multilateral mechanism on digital sequence information established under decision 15/9. The ACRM will then report the outcomes of that meeting directly to COP-16.

In a statement at the plenary, Cuba, on behalf of GRULAC, expressed its deep frustration and concerns with the lack of progress on the resource mobilization agenda. It said that developing country Parties “cannot afford to continue to keep having extensive discussions with no end in sight”.

It reiterated that, “the mobilization of resources is a critical factor in whether developing country Parties will be able to implement the KMGBF”. It called on developed country Parties to full their obligations on the provision of financial resources, in order to enable developing country Parties to effectively meet their targets and drive forward the collective goals of the Convention.

In this regard, GRULAC emphasized that, “making headway on this agenda item is crucial for unlocking progress in various other domains”. This will no doubt set the tone for the negotiations at COP-16, which will be the first COP following the adoption of the KMGBF.

The battle lines are clearly drawn, and COP-16 will have to grapple with this, the most vexatious of all issues for the CBD implementation. +