Policy Watch: Tough road ahead for nature, despite ‘historic' conservation pact

Reuters

17-03-2025

Summary
$200 billion in annual funding for developing nations under new conservation strategy
But U.S. cuts to Green Climate Fund and USAID leave a $365 million funding gap
Developed nations to raise $20bln this year, scaling to $30bln annually by 2030
$2.6 trillion identified as harmful subsidies driving nature loss
The Global Environment Facility pledges $383 million for biodiversity
March 17 - There were tears of joy in Rome last month as negotiators reconvened to pick up where COP16 biodiversity talks left off last November. In what was described as a win for multilateralism, they agreed a strategy to mobilise $200 billion annual funding for developing nations by 2030 and beyond, to halt the destruction of nature.
Some of the money will be generated by instruments including debt-for-nature-swaps and biodiversity offsets. Parties also agreed a mechanism to assess progress towards meeting the target to protect and restore 30% of land and ocean by 2030, which was agreed at COP15 in Montreal two years ago.
But with less than five years to go, there's little time to turn an historic agreement into concrete action.
The task is made more daunting by the U.S. pulling funding for nature and climate, and denouncing the United Nations sustainable development goals. Some European nations, including the UK, are also pivoting from development aid to defence in response to the Trump administration's rethink of its approach to European security.
The U.S. has reneged on $4 billion of pledges to the Green Climate Fund and axed almost all the U.S. Agency for International Development (USAID) budget, opens new tab. This year, more than $365 million was to have been made available via USAID for biodiversity conservation programmes – money that often provides an anchor to pull in other funders.
For example, in the five years to 2023, USAID tropical forest conservation work mobilised over $1 billion, opens new tab in public and private sector investment. All over the world project partners are trying to work out how to plug the gaps.
In Cambodia, the loss of just a $1 million bridging funding threatens a $15 million project to protect the pristine forest of the Cardamom Mountains, and the rare wildlife within it.
It has left conservation groups scrambling to try to find new funding. Jill Hepp, senior director in Conservation International's global policy team, says: 'It is the question around foundations and private sector partners being able to step up (and) other donor governments potentially taking more of a role.'
Eliane Ubalijoro is chief executive officer of the Centre for International Forestry Research and World Agroforestry (CIFOR-ICRAF), which has 270 active conservation projects around the world.
'We can start with a coalition of the willing, and over the next decade, get more people involved to ensure that financing nature is something that all parts of society take a part in,' she says. Her argument: 'We can all thrive together if we all invest in nature together.'
To speed up delivery of money, the COP16 secretariat is tasked with encouraging a dialogue between environment and finance ministers, something that already happens in the climate space.
Brian O'Donnell executive director of the conservation NGO Campaign for Nature, describes it as a key opportunity: 'Process alone won't solve it, but it will certainly elevate the issue and have (ministers) recognise the challenge,' he adds.
Ubalijoro agrees, and says the question now is 'how do we get granular data going out so that the people who need to look at the financial flows from governments, financial flows from the private sector, from an investment world, all help us build a nature positive net zero world.'
One positive sign that the financial world has got the message comes in a recent report from investors BlackRock, opens new tab, which acknowledged that more than half of GDP – some $58 trillion – is 'moderately or highly dependent on nature.'
Ubalijoro, who is based in Nairobi, Kenya, says: 'I've been to meetings with the insurance banking community to discuss how are they accounting for nature in their bottom line. So, if we can do this here in Africa, this can be done everywhere in the world.'
As the first staging post to filling the $700 billion biodiversity finance gap, developed countries (other than the U.S. which is not a signatory to the convention), agreed to come up with $20bn this year, ramping up towards $30 billion a year by 2030.
The latest figures collated by the OECD, opens new tab are already out of date, but they suggest that in 2022 (when the Kunming Montreal Global Biodiversity Framework was agreed), biodiversity-specific development finance amounted to $15.4 billion. So 'coming up with $20 billion per year can and should be achievable,' says O'Donnell.
At COP15 in Montreal, China committed $200 million to a biodiversity fund but has contributed just under $7 million , opens new tab so far. The Global Environment Facility (GEF) which currently hosts the Global Biodiversity Framework Fund, established after COP15, announced it had $383 million in pledges and had approved over $3 billion in projects that are expected to mobilise $22 billion in co-financing, including $1.9 billion from the private sector.
Other recent announcements include a $100 billion Nature Investment Coalition launched by Denmark's World Climate Foundation and Goldman Sachs' Biodiversity Bond Fund, which aims to raise up to $500 million over the next five years, reflecting a demand from investors especially in Europe.
In the final days of the Biden administration, Congress established the US Foundation for International Conservation, which was designed to provide up to $100 million each year in federal funds, matched two to one by philanthropy and the private sector. 'While the board still needs to be selected, it is one of the only bright spots for international conservation funding from the U.S.' notes O'Donnell. It's also a model that other governments could adopt.
OECD figures suggest a small but growing share of biodiversity finance mobilised from the private sector. Between 2021 and 2022 this more than doubled to over $1.7 billion, albeit the majority from just three nations – the U.S., France and Australia.
As with efforts on climate, the elephant in the room is subsidies. When the GBF was agreed in Montreal in 2022, nations agreed by 2025 – that's this year – to identify the subsidies that need to be phased out, reformed or substituted and to progressively reduce them by $500 billion a year by 2030. They should also scale up positive incentives to conserve nature.
'There has been almost no movement in governments to reform those subsidies,' says O'Donnell. '(It) should be obvious now in these constrained times that if you say you have no money to fund the conservation of nature, then you shouldn't have the money to fund the destruction of nature.'
Conservation International's Hepp points to the need for policy coherence. Alignment of finance and environment ministries potentially frees up resources or avoids resources being used to repair problems caused by, for example, deforestation – that were themselves unintentionally encouraged by subsidies.
'Given the shifting development and aid landscape, this focus on efficiency of use of existing resources is going to be even more key over the next five years,' she suggests.
Research carried out for Business for Nature put global environmentally harmful subsidies at least $2.6 trillion, opens new tab, or 2.5% of global GDP. They include fossil fuels and non-energy mining, because these sectors combine to drive nature loss.
EU member states had until this month to report on energy subsidies and set out any measures to reform them. When it comes to other environmentally harmful subsidies, the European Commission has developed a methodology to guide member states, but so far, reporting is voluntary.
Governments alone won't be successful in redirecting subsidies, suggests Eva Zabey, who leads Business for Nature. 'Business has to be part of that.'
Businesses that benefit from genetic resources can also start contributing to the Cali Fund, that was formally launched at COP16 in Rome. Companies that use digital sequence information from genetic resources, including pharmaceutical, biotech and agricultural companies, are being asked to share a portion of their revenues with developing countries, indigenous peoples and local communities. But it is voluntary.
'I think there's an appetite to want to be part of the solution and to want to contribute. But there are practical questions of how the money will be collected (and) used. What will the overall governance be?' says Zabey.
The UK government says it's been engaging with industry since the benefit-sharing mechanism was adopted last November, while companies such as Novo Nordisk (whose Ozempic drug has its origins in the poisonous venom of a north American lizard) say they're 'actively following the process'.
Perhaps the best hope for nature depends on setting aside the politics and looking at the bottom line.