In this piece courtesy of Accion Acologica under its COP16 Series, the group attempts to justify why it is dangerous to talk about a $700 billion shortfall in biodiversity funding

The COP16 of the Convention on Biological Diversity (CBD) held in Cali, Colombia, from October 21 to November 1, 2024.

The framework document for the negotiations at COP16 is Decision 15/4 adopted in 2022 by COP15, the Kunming-Montreal Global Biodiversity Framework (GMBF).

The Global Mechanism for Biodiversity Finance (GMBF) sets, among its global targets for 2050, the goal of achieving sufficient financial resources to progressively close the US$700 billion annual biodiversity financing gap. For this reason, one of the key issues discussed in Cali at COP16 is the financial mechanisms needed to close this gap.

However, as with climate finance, which claims that at least $100 billion a year would be needed to combat climate change, these figures are wild calculations, clearly aimed at trying to save capitalism from its current crisis of accumulation.

One of the key reports for the CBD to have arrived at this $700 billion figure at the Kunming- Montreal Global Biodiversity Framework is the document “Financing Nature: Closing the Global Biodiversity Finance Gap”.

“Financing Nature” was produced by three organisations. The Paulsen Institute, founded by Henry Paulsen, former US Treasury Secretary and former Goldman Sachs senior manager; The Nature Conservancy, the world’s largest transnational conservationist and now a partner of the international financial system; and the Cornell Atkinson Center for Sustainability, a US think tank created by David Atkinson, former vice president of JP Morgan, one of the world’s largest financial conglomerates.

The foreword to the publication includes names such as directors of the IMF, the World Bank, the Inter-American Development Bank, the European Central Bank, as well as Michael Bloomberg, founder of the financial information company Bloomberg, among others.

It is not surprising that these reports, such as “Financing nature: Closing the global biodiversity finance gap”, are led by bankers, as they are not proposals to address the underlying causes of biodiversity loss or climate change, but to further the financialisation of nature in order to profit from environmental crises and favour the private corporate sector with the help of the global financial system.

In the following interview with Andre Standing of the Coalition for Fair Fisheries Agreements (CFFA), we will learn more about the “Financing Nature” report and the dangers of putting a price on biodiversity.

Acción Ecológica: Andre, you have just published a long article on the document “Financing Nature: Closing the Global Biodiversity Finance Gap”, which has become one of the most cited reports on biodiversity conservation. It is also referred to in Goal D of the Kunming-Montreal Biodiversity Framework and was used to set precise targets for resource mobilisation by Parties to the UN Convention on Biological Diversity (CBD). So, it is argued at COP16 that there is a huge funding shortfall, or gap, of at least $700 billion a year.

Tell us, why is there so much talk about a biodiversity funding gap, what do you mean when you talk about a shortfall in the money that should be invested?

Andre Standing: “Financing nature” has been an incredibly influential report. Many organisations accept the $700 billion funding gap with blind faith, and of course this also includes the architects of the Kunming-Montreal Global Biodiversity Framework. There is something very attractive about seeing the biodiversity crisis as a problem that requires a lot of money to solve.

However, I think it is essential that people realise that this figure is nonsense, based on very dubious calculations. I also believe that the idea of a funding gap is a dangerous way to approach debates about what is needed to transform societies to improve nature conservation.

But it is an approach that suits many organisations.

Funding gap reports have become a popular type of publication in the last decade. They all follow the same formula and consistently show that the gap is so large that public funding cannot close it, so private funding must come to the rescue. Their recommendations always include strategies such as ‘blending’ public money with private investment.

So, the important thing to consider is that these reports on the funding gap, including “Financing Nature”, are ideologically motivated. No one should accept these figures unless they are willing to endorse the view that saving biodiversity depends on a massive transfer of power to the private financial sector.

Acción Ecológica: In your article you describe why the 700 billion figure is unreliable. Can you explain what the problems are with this figure?

Andre Standing: I think the problem is that many of the people who use this figure probably haven’t read the report in its entirety.

Reports on the financing gap start by establishing a baseline of what is currently being spent. Thus, the “Financing Nature” document attempts to account for all the money being spent in the world that would have a positive impact on biodiversity conservation. It seems strange to me to imagine that anyone could do this.

However, what the authors of this report did was to add up all the money spent by governments on biodiversity, with all the money spent through development aid, as well as the money spent through private finance and market- based schemes such as eco-labelling, biodiversity offsets and green bonds. The result, according to the authors, is that the world spends about $140 billion a year on saving biodiversity.

As I describe in my article, there are many problems with the underlying data. Part of the problem is that this method accounts for things that we know are ineffective. “Financing nature”, for example, assumes that when the World Bank reports that it has spent millions on a project aimed at forestry or fisheries reforms, that money has been successful. It also assumes that the billions spent on biodiversity offsets have produced a net benefit for nature.

A large part of the funds accounted for by this same report also comes from fake green bonds and the global value of things like the Forest Stewardship Council (FSC) and “sustainable palm oil”.

But there are also more fundamental issues. The report assumes a straightforward link between money and biodiversity conservation. More money equals more success. But comparing the costs of a US company paying for a biodiversity offset with those of a community organisation working on a permaculture project in a Southern country makes no sense. What is also particularly problematic about “Financing Nature” is that it makes no effort to capture the efforts and expenditures of millions of Indigenous peoples and small farmers or fisherfolk who act as custodians of vast areas of the planet.

They are not included at all, whereas a few million dollars raised in a green bond is. Similarly, the value of a product with a corporate eco-label is added to the total biodiversity expenditure, but something produced by small-scale farmers or fishers without a label is not counted, even though we know that the latter is much more environmentally friendly than the former.

So, the baseline figure of what is being spent is not only false, but also based on the wrong perspective. There is no critical reflection on the results of the money earmarked to save nature. Much of the money represents corporate greenwashing, which, in fact, has a detrimental impact on biodiversity.

Acción Ecológica: So, if the “Financing Nature” report has invented a figure for what is spent, how does it arrive at a figure for what is needed?

André Standing: Well, the short answer is that they make up this figure based on a few controversial reports. It is incredible that the authors of the report claim to know how much money is needed to solve the biodiversity crisis.

Of course, the problem of calculating how much money is needed to save nature depends on the approach taken. A good example is the 30×30 target. In ‘Financing nature’ they draw on a figure produced by another report that estimated how much it would cost to declare 30% of the planet a strict nature reserve.

According to that report, the annual running costs of protected areas would amount to about 190 billion dollars. Many things could be said about the accuracy of that figure, but the most serious is that the $190 billion estimate is based on a specific type of management regime, based largely on law enforcement and ecotourism.

Someone would come to a completely different perspective on costs if they believed in protected areas managed by local communities, where many management functions are based on volunteerism and mutual aid.

I am particularly interested in marine fisheries, and “Financing Nature” assumed that the world needs to spend between $23 billion and $47 billion on fisheries management to ensure the sustainability of fisheries and the recovery of fish stocks. This is a ridiculous figure based on an obscure academic paper written by US marine biologists that projected the global costs of fisheries management if all countries managed their fisheries as the US does: through individual catch quotas.

Anyone familiar with fisheries knows that this model is totally unacceptable to many countries in the South, as it would jeopardise the livelihoods of millions of people. Also, a considerable amount of literature on fisheries management shows that how much governments spend on management is not a good indicator of how well fisheries are managed.

Experts disagree on what the ingredients for success are, but many point to the importance of democratic governance, the ability to resist corporate lobbying and corruption, and tenure systems that favour low-impact artisanal fishing methods. Money, or lack of it, is not the biggest problem.

So, if we ask ourselves how the authors of “Financing Nature” have arrived at an estimate of what needs to be spent, it is quite clear that these figures come from some very dubious research that no one should take seriously.