Two years ago, at the COP15 UN biodiversity summit in Montreal, 196 countries agreed to set up a fund for projects to conserve and restore nature – but it has struggled to attract large contributions. Now, at COP16 in Cali, government negotiators are clashing over what to do with it.

A group of developing countries – concerned about their access to the existing fund – is pushing a proposal to establish a new fund for biodiversity under the COP. The plan is for it to replace the one created in Montreal, which is managed by the Global Environment Facility (GEF), and offer biodiversity-rich developing countries a bigger say in how it is run.

“Biodiversity finance should be flowing to where biodiversity is. The voice of countries bearing a greater burden should count more than it does in the GEF governance system,” Brazilian negotiator André Aranha Corrêa do Lago said at the opening session of COP16 on Monday.

Experts told Climate Home News the future of the fund could become the biggest issue for debate at the Colombia summit, adding that disagreements over the developing-country proposal were starting to obstruct progress on other finance negotiations.

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Old divisions re-emerge

In 2022, countries decided to host the newly created Global Biodiversity Framework Fund (GBFF) at the GEF – a multilateral agency co-founded by the World Bank and other UN agencies – through to 2030, with the option to extend the arrangement after that year.

Some developing nations strongly opposed the GEF as host of the fund, fearing they would not have enough influence over it, with the Democratic Republic of the Congo (DRC) objecting to the entire new global nature pact agreed in Montreal due to the row about the fund.

Decisions about what to do with the fund’s money are made by a council that has 16 members from developing countries, 14 from developed countries, and two from the countries of central and eastern Europe and the former Soviet Union.

The fund is supposed to provide “enhanced access for Indigenous peoples and local communities, according to their own priorities”. But, in a recent briefing shared with Climate Home, Survival International argues that conflating Indigenous peoples and local communities is “highly problematic” – and claims the GEF does not have adequate safeguards to ensure consent from Indigenous people.

Survival International, a campaign group for the rights of tribal people, also says the fund’s portfolio “so far is dominated by UN agencies and a select handful of mostly US-based conservation organisations” and reinforces “old and failing models of top-down, colonial conservation especially through the establishment of national parks”.

This week, efforts to take management of the fund away from the GEF have resurfaced at COP16.

Brazil backs a proposal to establish a new fund designed in “an inclusive and innovative way, learning from the experience of current instruments”, Corrêa do Lago told the opening plenary. Other countries – from India and Bangladesh to South Africa and China – have also called for a more equitable and transparent approach to biodiversity funding, according to the Earth Negotiations Bulletin.

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As talks ramped up during the first week of the conference in Colombia, divisions started to surface. Canada, for example, rejected the idea of a new fund during a finance session on Tuesday.

“The proposal to create a new donor-based fund or financial mechanism would serve to further fragment the biodiversity finance landscape and lead to increased administrative costs, without mobilizing new donor funding,” reads the Canadian statement.

One source inside the negotiating rooms told Climate Home News the DRC said it would not proceed with any discussions on finance until the issue of the funding mechanism was resolved.

The chair of Working Group 1, Charlotta Sörqvist from Sweden, during biodiversity finance discussions at COP16. (Photo: IISD/ENB | Mike Muzurakis)

“Toxic” issue

According to Thomas Pickford, UK policy and partnerships lead at The Nature Conservancy, the future of the UN biodiversity fund has “real potential to be an obstacle for progress”.

“It’s kind of become a toxic issue that we’re trying to work through,” he told Climate Home News. “There’s obviously a big disagreement between donor countries and recipient countries.”

WWF’s head of global advocacy, Bernadette Fischler Hooper, said wealthy countries could build trust by sending strong signals on their funding commitments.

Finance for the GBFF’s coffers has so far been scarce. Developed countries have pledged around $243 million, of which the fund has received nearly $194 million, with COP15 host Canada – which made the largest commitment – yet to pay in the full amount.

The pledges to the GBFF, from just a handful of countries, are only a fraction of the COP15 target for donor governments to provide $20 billion a year for biodiversity protection by 2025, rising to $30 billion by 2030.

Broader development funding from donors for efforts to protect and restore nature grew from $11.1 billion in 2021 to $15.4 billion in 2022, according to the Organisation for Economic Co-operation and Development – but much of it came in the form of loans.

Reform needed?

So far, the GBFF has approved 22 projects, mainly to be implemented in the Global South but nearly all managed by large accredited organisations including multilateral development banks, UN agencies and Global North green groups like WWF and Conservation International.

At COP16, some developing countries said the number of projects was low partly due to difficulties in accessing the money. In a statement during the finance talks, Uruguay noted that of 66 projects applying for the second round of GBFF grants, only 18 were approved.

WWF’s Fischler Hooper called for “flexibility and openness from countries to have a conversation about all available options and unblock the current deadlock in the negotiations” on the biodiversity funding mechanism.

Pickford of The Nature Conservancy said the main options on the table are: creating a new fund in Cali, deferring the decision until COP17 in two years’ time, doing more assessments on whether a new fund is necessary, or ratifying the current fund as the final financial instrument.

He emphasised that the GBFF so far has “nowhere near enough funding” and called for reform to how the GEF runs it.

“We want streamlined access to developing countries. For Indigenous people and local communities, it’s still too hard to access funding,” he added.

(Reporting by Sebastian Rodriguez; editing by Megan Rowling and Joe Lo)

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At COP16, countries clash over future of global fund for nature protection