A Tale of Two Treaties

The new Global Biodiversity Framework could be our last opportunity to save the natural world

Before the new global biodiversity framework (GBF) was adopted in the early hours of December 19, 2022, the general sentiment among participants at CBD COP 15, the global biodiversity summit, was not much different from slogging through the slushy wintry streets of host city Montreal—fatigued and expectant of the destination just around the corner, yet dreary of potentially more icy puddles ahead. A nearly two-year delay, a change of the summit venue, endless bickering over the GBF text, and a world distracted by many other seemingly more urgent priorities are hardly ingredients for an exuberant gathering for the future of our planet. As a result, when the news broke that the new GBF was approved at COP 15   [1]   , many breathed a sigh of relief.

Of course, the new GBF is far from perfect—its key targets are more of a compromise of what can be agreed on rather than what should be done. On the other hand, the new GBF has outlined and reaffirmed some key actions critical to giving ourselves a fighting chance to halt and reverse biodiversity loss before it’s too late. These include protecting 30 percent of the world’s lands and oceans and reforming and reducing financial incentives and investments harmful to biodiversity.

Figure 1. Key GBF targets

Source: CBD Secretariat

Compared to the climate summit, which took place just weeks before, the biodiversity summit didn’t generate as much fanfare, media coverage, or public discussion. Heavyweight political and business leaders were conspicuous at COP 15 by their absence. But this should not encourage the bleak view that biodiversity protection verges on becoming a lost cause. Instead, we should try to find inspiration and motivation from another international agreement hammered out in precisely the same city thirty-five years ago. This agreement showed how humanity, when pooling foresight, resolve, and ingenuity, can work collaboratively and effectively to tackle environmental challenges of global scale and planetary consequences.

The Montreal Protocol   [2]   , a global agreement to protect the stratospheric ozone layer, by phasing out the production and consumption of ozone-depleting substances (ODS, including primarily chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs))  [3]  , is often hailed as the first and most successful environmental treaty. To date, the Parties to the Protocol have phased out 98 percent of ozone-depleting substances globally compared to 1990 levels and helped save millions of people from skin cancer   [4]   . Despite obvious differences in the level of complexity and scale between ozone depletion and biodiversity loss, there is still a parallel warranting a closer look so we can be better equipped to translate the new GBF into action.

Figure 2. The success story of ozone recovery

Source: Scientific Assessment of Ozone Depletion: 2022

Science Matters

Scientists first sounded the alarm about CFCs’ impact on the ozone layer in the early 1970s   [5]   , and the projection in 1983 forecasted a modest 5-10 percent loss of the ozone layer within 100 years if the current use of CFCs continued. Only two years later, the British Antarctic Survey identified a huge ozone hole over Antarctica, a loss of roughly 50 percent of the ozone. Observations from the US and Japan then confirmed this   [6]   . The precipitous drop in ozone contrasted sharply with the earlier prediction of a gradual depletion rate and foreshadowed calamities for human health and food production  [7]  . This jolted the world into action.

In the case of biodiversity, the rapid species loss and ecosystem degradation have been well documented, and its potentially devastating impact on human society has been predicted. Still, it has so far fallen short of generating the urgency for action comparable to that of ozone depletion.

Figure 3. Declining state of biodiversity

Source: AFP, WWF

The reasons behind this are myriad. For example, with all its amenities, modern living has largely insulated and distanced many people from wild nature. As a result, biodiversity loss is often reduced to forgettable numbers and fails to evoke any visceral feelings or exigency. Moreover, as the impact of biodiversity loss on human society can be complex and uneven, countries not immediately in danger can be lulled into a false sense of security.

Given this, the need for science to spotlight the nonlinear nature of crises and the importance of taking a precautionary approach, as demonstrated in the case of ozone depletion, is vital. Science must eradicate the dangerous message and idea that “Biodiversity can wait.” The lingering pandemic has also thrown into sharp relief the risks and consequences of human encroachment on nature. Without a wake-up call for biodiversity, the world risks descending into an ecological catastrophe triggered by an accumulation of “tolerable” biodiversity loss.

Public Policies Should Lead The Way

Another key lesson from the success of the Montreal Protocol is the critical role of government policy. The Protocol provided a stable framework that helped inform and underpin government policies allowing the industry to plan, innovate, and follow through with the transition from CFCs. Absent strong policy direction and signals, a small number of companies, out of reputation considerations, might nevertheless take the lead in phasing out ozone-depleting substances. But they alone would not be sufficient to catalyze an industry-wide change. This is where public policy should come in—setting the right goals and mandating their achievement, thus leveling the playing field. In the case of the Montreal Protocol, the agreement set a series of phased and time-bound targets, which prompted country governments to formulate and implement policies to galvanize sector-wide action.

The success of the new GBF hinges on how effectively and faithfully each country’s government translates the targets through a suite of well-thought-out policies and actions.

The same must happen in biodiversity conservation. Without regulatory clarity from the government, corporate players may cling to business as usual. Keenly aware of this, the GBF calls for a whole-of-government approach that demands political will at the highest level of government. Therefore, the success of the new GBF essentially hinges on how effectively and faithfully each country’s government translates the targets through a suite of well-thought-out policies and actions. These could include mainstreaming biodiversity in macro socioeconomic planning, instituting mandatory biodiversity risk disclosure, or implementing biodiversity offsets. To replicate the success of the Montreal Protocol, governments again will need to step up.

Private Sector Can Drive the Change

A key element for the success of the Montreal Protocol has been the ingenuity and innovation demonstrated by the private sector that quickly developed effective substitutes to replace the old ozone-depleting substances for a wide range of applications at a much lower cost than predicted. For biodiversity, it’s more complicated and challenging, as it goes far beyond product substitution. It spans strengthening investment risk screening, instituting effective reform of supply chains, adopting regenerative agriculture  [8]  , and piloting innovative green financial products. Increasingly, sector-leading companies are taking steps to assess and develop strategies to reduce their business’ impact on biodiversity. Nowhere was this more evident than at the  Business and Biodiversity Forum  and the three-day business-focused event series at COP 15. Business leaders reaffirmed their commitments to nature conservation through better due diligence, nature-friendly sourcing policies, and product innovations.

Some financial institutions (both development and private banks), with massive financial resources at their disposal, are now more proactive in addressing their dependency and impact on biodiversity, thanks to the emergence of more standardized disclosure frameworks such as TNFD   [9]   . Aside from biodiversity risks, these financial institutions also see promising business opportunities in “financing the green,” i.e., bankable projects that deliver biodiversity benefits. This was why, for the first time, the CBD Secretariat sponsored  a full-day event  at COP 15 for the financial community to engage in candid conversations about their roles and responsibilities in helping channel the financial flows in a nature-positive manner.

Of course, what we witnessed at COP 15 mainly were highflyers and early movers in their respective business sectors. However, many more companies are still on the fence, citing the lack of data and well-established methodologies for measuring biodiversity impact. In this case, it’s essential not to let the perfect stand in the way of the good. Again, government policies play an indispensable role in creating the necessary enabling environment and incentives to spur a critical mass of businesses into action. At COP 15, it was encouraging that many company representatives called for government policy support and voiced their commitment to beginning their journey to a nature-positive future. In addition, tackling the biodiversity and climate crises simultaneously is gaining traction among many more companies.

Financing Catalyzes Transition

Under the Montreal Protocol, a special multilateral fund, capitalized mainly through contributions from developed countries   [10]   , was established to support developing countries in complying with the control measures. This provided the government and industries in developing countries with strong incentives and resources to phase out ozone-depleting substances and transition to new alternatives.

For the success of the new GBF, financing will remain pivotal and challenging. Of the US$711 billion global biodiversity financing gap  [11]  , about US$500 billion of it can potentially be closed by reforming harmful subsidies, and the remainder would still rely on raising additional funds   [12]   . That many traditional donor countries have stepped up (in some cases more than doubling) their international financial support for biodiversity is a positive sign   [13]   . This includes around 40 developed and developing countries’ endorsement of the 10 Point Plan outlining a comprehensive blueprint for helping close the biodiversity financing gap   [14]   .

As substantial as these funding increases are, vast global biodiversity financing needs still dwarf them. Moreover, given the sluggish post-pandemic macroeconomic outlook, what further contributions these donor countries can realistically make and whether the GBF target of raising international financial flows from developed to developing countries to at least US$30 billion per year can be achieved remains a question. Therefore, deploying international public financing strategically to leverage more private resources (e.g., blended financing for investment in biodiversity), on the one hand, and urging developing countries to mobilize their domestic resources more effectively through a whole-of-society approach on the other is critical. The new GBF is very clear about this challenge, and the pathway forward (i.e., mobilizing biodiversity financing from all resources), which is encouraging. All countries will need to look beyond conventional funding for biodiversity and make genuine efforts to broaden the streams of financing for biodiversity to make the GBF target on resource mobilization a reality.

Reporting Counts

Accountability is grounded in rigorous measurement and reporting. The demonstrable decline in global ozone-depleting substances since the adoption of the Montreal Protocol speaks to the importance of its sound reporting mechanism, which requires each party to provide statistical data on its production and imports/exports of the controlled ozone-depleting substances annually.

It will be crucial for the Parties in future negotiations to find ways to strengthen the reporting mechanism under GBF further to increase its chance of success.

At COP 15, conflicting views on the reporting obligations among the delegations resulted in weak language in the GBF, omitting specific timeframes for national-level reporting. In addition, the GBF stated that the reporting mechanism will be undertaken in a non-intrusive and non-punitive manner and should avoid placing an undue burden on Parties. Given this, the specificity and actionability that characterized the Montreal Protocol’s reporting mechanism appear to elude the GBF in its current form. As a result, the reporting mechanism under GBF may not be powerful enough to promote transparency and impose accountability through peer pressure. Thus, it will be crucial for the Parties in future negotiations to find ways to strengthen the reporting mechanism under GBF further to increase its chance of success.

Investors and Consumers Can Wield Power Too

While government policies can push companies to change their business practices to reduce their impact on biodiversity, consumers, with their purchasing choices, can “pull” companies towards more sustainable sourcing and production. In the case of the ozone layer crisis, one of the key motivators for companies to shift away from CFCs was that consumers started to buy fewer CFC-based products (e.g., spray cans) after the warning about ozone depletion was publicized in the middle of the 1970s. More importantly, this change among consumers generated considerable public support (if not pressure) and momentum for the government to regulate CFCs.

Consumers can wield a similar level of power for biodiversity protection through their conscious spending decisions. By reducing their consumption and buying sustainably produced products, the confluence of millions of consumers’ purchasing choices will be compelling enough to sway any companies to rethink their business strategies and product lines. For this reason, sustainable consumption continues to feature prominently in the new GBF.

We, as consumers and investors, can help shape the outcome of the GBF with our choices and behaviors.

In addition, many consumers are also investors through their retirement portfolios and other investment activities. Which sectors, companies, and funds they decide to invest in and what environmental and social standards they expect the companies to follow will influence how financial institutions and businesses channel their financial resources. In this sense, we, as consumers and investors, can help shape the outcome of the GBF with our choices and behaviors.

Final Thoughts

Thanks to continued and disciplined global efforts to phase out ozone-depleting substances through the Montreal Protocol, we have managed to avoid a potentially devastating calamity for humans and our planet. Today, when the biodiversity crisis looms larger than ever, we would be wise to draw lessons and inspirations from the success of the Protocol to help us more effectively implement the new GBF. The GBF’s approval against all odds at COP 15 provides glimmers of light at the end of the tunnel. But ultimately, determination and action get us to the other end of the tunnel. Given that the GBF is essentially an intergovernmental agreement, governments taking necessary action to ensure their national economies are consistent with the goals of the GBF is critical. Urgent actions should include:

  • Identifying, reviewing, and phasing out subsidies and incentives harmful to biodiversity
  • Putting in place the regulatory framework to make it costly to harm or destroy nature and reward those who protect and restore it
  • Demanding that multilateral development banks align their funding flows with the GBF, in the same way they are doing with the Paris Agreement on climate change
  • Instituting mandatory reporting for major companies on their impact on biodiversity

Figure 4. Bending the curve of biodiversity loss

Source: phys.org

As forcefully stated by the GBF, averting the biodiversity crisis requires a whole-of-society approach. We, as homo sapiens, would be wise to remind ourselves that we are part of nature, and destroying nature as our life support system will only hasten our demise. At this critical juncture of the twin crises of climate change and biodiversity loss, ensuring the successful implementation of the GBF is probably our last hope to save nature—and ourselves.

As forcefully stated by the GBF, averting the biodiversity crisis requires a whole-of-society approach.


Sources:

  [3]   ODS include mainly manufactured chemicals, especially manufactured halocarbon refrigerants, solvents, propellants, and foam-blowing agents (chlorofluorocarbons (CFCs), HCFCs, halons).

   [10]    By November 2022, the contributions received by the fund from developed countries totaled over US$ 4.56 billion.

Related content:


Source: CBD Secretariat

Source: Scientific Assessment of Ozone Depletion: 2022

Source: AFP, WWF

Source: phys.org