The final session of the Conference of the Parties to the Convention on Biological Diversity (COP 16) stretched into Saturday morning in Colombia, about 12 hours longer than planned. It concluded only when so many delegates had left for flights that quorum was lost and the meeting was suspended.

In that time, however, there were breakthroughs on issues that, in the two weeks prior, had begun to seem intractable. Progress had been arduous, snarled up in procedural objections, nit-picking and political manoeuvring. On specific matters, resistance could be vigorous. And logistical challenges, such as the venue’s faltering wifi, slowed down communications and information sharing.

Funding to protect ecosystems

Nevertheless, delegates reached an important agreement on a benefit-sharing mechanism for digital sequence information on genetic resources (DSI). Under the recommended guidelines, large companies and other major entities benefiting commercially from DSI uses should contribute 0.1% of revenues from these products to the “Cali Fund”. This funding will go toward the protection of ecosystems that hold these valuable genetics, with at least half of the funding expected to be distributed to Indigenous peoples and local communities.

Also, negotiators agreed to create a permanent subsidiary body to support Indigenous peoples and local communities to participate directly in the implementation of the Kunming-Montreal Global Biodiversity Framework. This was complemented by a new recognition of the role of Afro-descendant people in protecting nature and traditional lifestyles.

On the other hand, efforts to establish a new multilateral fund, as well as a new framework for monitoring countries’ progress on tackling biodiversity loss, were left unresolved. The next biodiversity COP is two years away, but these issues can be revisited at intersessional meetings next year.

'The peoples' COP'

In a way, the successes validated the event’s promise to be the “peoples’ COP”. Colombia’s environment minister Susanah Muhamad, also now the president of COP16, advocated powerfully for the social dimensions of biodiversity protection. As a person of Palestinian ancestry who lives in a country with some of the world’s highest rates of violence against environmental defenders, she brought gravitas to the conference theme of “Peace with Nature”. Others reinforced this message, such as Ukraine’s delegate who described not only the human toll of Russia’s ongoing invasion, but also the destruction of valuable ecosystems as forests are razed, rivers poisoned, and dams destroyed.

COP16 has set clear expectations about how governments, markets and civil society ought to approach the biodiversity crisis, treating the social and ecological dimensions as intertwined.

Massive financial shortfall

However, much of what needs to be done needs to be paid for. Thus, the lack of progress on funding and financing is a major setback.

At COP16, parties only committed USD$163 million to the Global Biodiversity Framework Fund (GBFF), raising the total commitment to about USD$400 million.

The fund, which was announced two years ago at COP15 in Montreal, was intended to provide USD$20 billion in annual conservation financing for developing nations by 2025, rising to USD$30 billion annually by 2030. This shortfall reflects global economic uncertainty which is likely to constrain what’s possible in this month’s climate COP in Baku, Azerbaijan.

The New Zealand Government committed NZ$20.0 million to the GBFF, one of only twelve donors to date. New Zealand is also among the nearly 80% of countries that did not submit National Biodiversity Strategy and Action Plans, although it has pledged to submit the existing ANZBS (Aotearoa New Zealand Biodiversity Strategy) and its forthcoming implementation plan when the latter is finalised. Overall, New Zealand’s presence at COP16 was muted, perhaps reflecting the tensions between its cooperative international stance and its controversial domestic approach to resource management.

Peripheral deals

Yet the UN Biodiversity Conference is about more than what happens in the central plenary. On the periphery, deals were hatched in closed rooms, lunch tables and patio cafés. In various plazas and pavilions in the main conference area, known as the Blue Zone, knowledge was exchanged across over three-hundred side-events attended by NGOs, researchers, innovators, Indigenous representatives, businesses, and others. In the city centre’s open-access Green Zone, civil society and Cali’s citizens were celebrating Colombia’s unique biodiversity and culture along the riverside and busy streets. And in nearby hotels, investors and financiers were flitting between functions and cocktail parties to build their confidence in nature-aligned investment.

Perhaps this is where the real progress will be made. NatureFinance’s Simon Zadek observed that the scale of multilateral funds pales in comparison to USD$100 trillion that moves through the global economy annually. Much of this is misaligned with biodiversity, including the estimated USD$7 trillion in subsidies and private investments which are directly harmful to nature. If these capital flows are not redirected, the multilateral funds are merely a band-aid, unable to arrest the structural trends toward biodiversity loss. Whole-of-system change is what is required.

Biodiversity credits dominate

The conversation on financial innovation was dominated by biodiversity credits, which has advocates and critics in equal measure. What biodiversity credits lack, however, is a clear pathway to scalability. It is as if the financial economy has run ahead of the real economy, swinging its economic weight behind a product that satisfies its own preferences for tradability and fungibility, but does not meet the needs of prospective buyers. This market might develop in time, but small-scale issuance seems most likely over the next few years. The New Zealand Government would do well to be realistic about demand-side factors whenever it picks up again on its 2023 consultation on a biodiversity credit scheme.

In the meantime, biodiversity credits overshadow other financing options in the broader ecosystem of nature investment. This includes calls by Indigenous peoples and local communities for direct stewardship payments and benefit-sharing mechanisms, the repurposing of traditional investment instruments like bonds for nature-positive purposes, new disbursement schemes for public conservation funding, and emerging markets for nature data for reporting and disclosure.

As part of COP16, the organisation I work for, the Toha Network, announced its own pilot in nature data payments last week.

We do not need to wait – nor can we afford to wait – for the next biodiversity COP to make progress in these areas. However, the conference in Cali, with its glorious intermingling of sectors and cultures, might provide inspiration and momentum – through the exchange of ideas, the expansion of networks, and the renewed ambition to defend the rights of people and nature.

Dr David Hall is Policy Director for the Toha Network, which is a member of the UN-led Biodiversity Credits Alliance (BCA). He attended COP16 to launch Toha’s inaugural pilot for MAHI, a digital token to support nature-based jobs, and to support Toha’s involvement in the BCA’s Community Advisory Panel.