COP16: financial roadmap for biodiversity approved

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President of the COP16 Susana Muhamad formalised the approval of the two key documents of the negotiations: Resource Mobilisation and Financial Mechanism. These texts outline a concrete path to close the financial gap needed to reach the set target and clarify the debate on which institution should manage the collected funds. The announcement, which took place on the evening of 27 February, was greeted by lengthy applause from the delegations present and represents a major achievement in maintaining a relationship of trust that will serve to close the funding gap in biodiversity protection.

One of the most discussed points at COP16 bis concerned the financial strategy for the management of biodiversity funds. Specifically, the document Resource Mobilization defines the permanent financial institutions by 2030 that are to manage funds for the enhancement of sustainable biodiversity finance. The Parties considered whether to enhance the Global Environmental Facility (GEF), established in 1992 by the United Nations, to administer at least USD 30 billion annually or to create a new dedicated fund. This issue was particularly relevant for countries subject to international sanctions, such as Russia, which find the GEF a bureaucratic obstacle. In the end, it was decided to maintain the GEF with an interim role until 2030, while in 2026, at the COP17 in Armenia, the criteria for a new institutional structure will be established. By 2028 it will be decided whether to create a new body or continue with the reformed GEF

Among the successes of COP16 bis is the operation of the Cali Fund, voluntarily financed by private companies exploiting Digital Genetic Sequencing (DSI). This fund represents a new form of contribution by the private sector to the protection of biodiversity, with a mechanism involving the voluntary payment of 1% of profits or 0.1% of turnover. Another step forward was the approval of the PMMR, the system for monitoring and reporting on the progress of national biodiversity strategies (NBSAP) and the targets of the Global Biodiversity Framework for 2030. This instrument will ensure transparency in the accounting of funds, avoiding the phenomenon of double accounting, a widespread practice among donor countries.

Despite achievements at the COP16 bis, funding for biodiversity remains a crucial challenge. As of 27 February, funds allocated in the Global Biodiversity Framework Fund (GBFF) amounted to only $382 million, with Italy still absent among the contributors. To reach the target of $20 billion per year by 2025, new public and private funding instruments will have to be lobbied for. One of the strategies envisaged is the involvement of the multilateral development banks and an inter-ministerial dialogue between the Environment and Finance Ministries of the COP countries to find adequate resources. In addition, an international campaign will be launched to encourage companies in the pharmaceutical, cosmetics, animal husbandry and chemical sectors to contribute to the Cali Fund.

One of the most ambitious commitments of the COP16 is to phase out $500 billion of environmentally harmful subsidies by 2030. This goal, envisaged by Global Biodiversity Framework Goal 18, is to be pursued through economic reforms and positive incentives for biodiversity conservation. However, global trade tensions and the weakness of the World Trade Organisation (WTO) could pose significant obstacles.

The debate on the management of the finance for biodiversity will continue in the coming years. If the GEF succeeds in implementing the required reforms, it may retain its management role, otherwise a new dedicated body will be established. The CEO of the GEF, Carlos Manuel Rodríguez, assured that the fund will continue to improve its responsiveness to global needs. To date, the GEF has allocated USD 3.07 billion for biodiversity projects between 2022 and 2024, mobilising more than USD 22 billion in co-financing, including USD 1.9 billion from the private sector. Decisions at the next GEF-9 conference will be crucial in understanding how countries intend to finance biodiversity until 2030.

This article was realised in the framework of the project "Biodiversity services EU expansion" (CUP: E43D22000480009) in the framework of the Lombardy Region's call for tenders "PR FESR 2021-2027 - LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalisation of Italian companies. 3Bee is the naturetech company developing innovative technologies for monitoring, protecting and regenerating biodiversity, supporting companies in defining customised climate strategies based on the analysis of their impacts and dependencies on nature. With an established portfolio in Italy, Germany and France and prominent partnerships, 3Bee continues its expansion into international markets to create real impact through technology.