by Mirna Fernandez (Third World Network)
At COP17 many of the discussions focused on ways to close the biodiversity finance gap, an estimated USD 700 billion annual shortfall in the resources needed to protect and restore nature. To close this finance gap, target 19 of the GBF aims to mobilise a total of USD 200 billion per year for biodiversity, and highlights the importance of ‘innovative finance schemes’, such as Payment for Ecosystem Services (PES), green bonds and biodiversity offsets and credits.
All these schemes apply different components of the market logic, which are flawed when applied to nature. The main problem is that these mechanisms all consider nature as an asset to be sold, exchanged, or invested in, and that market prices will incentivise the protection of biodiversity. The most obvious shortcoming of this logic is that the market does not care about nature, threatened species or fragile ecosystems. Markets favour projects that generate attractive financial returns, whereas many of biodiversity’s benefits are public goods that cannot easily be captured as revenue. This logic is especially useful for biodiversity-destructive sectors as it allows them to continue destroying ecosystems while claiming they are doing their part, either by offsetting, purchasing credits or investing in nature protection elsewhere. Meanwhile, the urgent regulation and restriction of biodiversity-destructive activities continues to be postponed.
These schemes respond to the push for private finance to replace the public funding needed for biodiversity protection, but by doing so, they reduce political pressure for stronger regulation and public investment. They also add pressure on recipient governments that face unstable revenue streams and fluctuating conservation incentives while being expected to provide the institutional infrastructure for the mechanisms to function.
As market rules legitimise and enable further destruction, financial benefits flow mostly to intermediaries who identify, aggregate, package, certify and market biodiversity conservation and restoration activities as investable assets, capturing fees and other forms of aggregated value at several stages of the transaction. By contrast, rights-holders, such as Indigenous Peoples, small-scale farmers and local communities, only get a small fraction of the revenues, and often face the impacts of the implementation of mechanisms with poor social and environmental safeguards, including displacement, land conflicts and loss of their means of life. The environmental impacts of these mechanisms are also vastly documented, leading to lack of additionality and permanence of the conservation gains, leakage of impacts, monoculture risk and greenwashing.
While it is true that current global biodiversity finance remains insufficient, and that Global North governments have failed to live up to their financial commitments, this is not the only gap that should be addressed. There is also a justice gap, which results in an unequal distribution of benefits, exclusion and underfunding of biodiversity stewards on the ground. Therefore, the aim must not be to make nature attractive to financial markets, but to make biodiversity protection a non-negotiable public responsibility and to ensure that those who steward it have the resources and power to do so.