PerspectiveBridge: Climate and Biodiversity

How to pay for saving biodiversity

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Science  04 May 2018:
Vol. 360, Issue 6388, pp. 486-488
DOI: 10.1126/science.aar3454

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The 1992 Convention on Biological Diversity (CBD) was one of the first international environmental agreements negotiated. In the same year, the Global Environment Facility (GEF) for funding biodiversity conservation in developing countries was launched. Yet 25 years later, biological populations and diversity continue to decline both on land (1) and in the oceans (2). The main reasons are chronic underfunding of global biodiversity conservation; the lack of incentives for global cooperation; and the failure to control habitat conversion, resource overexploitation, species invasions, and other drivers of biodiversity loss. Dinerstein et al. recently called for a global deal, complementing the 2015 Paris Climate Change Agreement, for conserving half of the terrestrial realm for biodiversity by 2050 (3). Here, we explore how such a deal might be implemented to overcome the funding problem in biodiversity protection.

As with any public good, biodiversity conservation suffers from a free-riding problem, in which governments have an incentive to provide less than the optimal level of funding in the hope that others will cover the costs. This is especially pertinent when the benefits of such payments accrue to other countries. In particular, global funding to support conservation efforts in developing countries, which host most biodiversity, is woefully inadequate to prevent habitat loss and overexploitation. The global benefits of biodiversity conservation are much greater than the benefits accruing to developing countries. Left on their own, the latter countries will preserve insufficient biodiversity. Existing international institutions and funding mechanisms, including the CBD and GEF, have boosted conservation efforts but failed to deliver enough funding to where it is most needed. As a result, global conservation falls far short of what is required to attain safe biodiversity levels.

A Global Agreement for Biodiversity

Governments around the world have agreed to the Aichi Biodiversity Targets, which include the goal of conserving at least 17% of terrestrial and inland water habitats and 10% of coastal and marine areas by 2020 (4). However, the existing Aichi Biodiversity Targets are widely seen as too modest in scale to save global biodiversity (13). Scientists are increasingly calling for an expanded goal of saving half the terrestrial realm, which could cost up to $80 billion annually (3). If a new biodiversity agreement also extends the Aichi Target of conserving 10% of coastal and marine areas (4) to 50%, an additional $19 billion could be required each year (3). This suggests a total annual biodiversity conservation bill of $100 billion. For comparison, the international community currently spends only $4 billion to $10 billion each year (3, 5, 6).

The flexible architecture of the Paris Agreement is ideally suited to a biodiversity accord. Under the Paris Agreement, a global target was agreed to, but countries made individual pledges to meet the goal. Negotiated within the United Nations Framework Convention on Climate Change, the Paris Agreement is based on all 195 signatory countries reaching a consensus on a few key goals: limiting global warming to 2°C, substantially reducing greenhouse gas emissions by 2050, and having rich countries assist poor nations in abating emissions. The accord allowed individual countries to pledge their own national targets, abatement policies, and timelines for emission reductions, subject to 5-year review. In addition, wealthy countries have pledged $100 billion a year in climate finance for developing countries by 2020 and have pledged to continue raising $100 billion a year until 2025.

Similar to the Paris Agreement, a global agreement for biodiversity would address the loss of uncertain but potentially irreversible and essential global ecosystem benefits. As the governing body of the CBD, the Conference of the Parties (COP) would be well placed to initiate negotiations for such a global agreement. Like the Paris Agreement, the key objective should be agreeing on a global target, with countries making voluntary pledges to meet the goal. The broad goal and time frame could extend one or more of the existing Aichi Biodiversity Targets (4), for example, to conserve at least 50% of terrestrial, inland water, coastal, and marine habitats by 2050, as proposed in (3). However, establishing an overall target for the global agreement for biodiversity is only a first step. As in the Paris Agreement, all countries should declare their own national targets, policies, and timelines, subject to 5-year review, for attaining the overall target. For wealthier countries, these targets and timelines should also include financial and technological commitments to assist conservation in developing countries through the GEF, other international bodies, or bilateral pledges.

Going Beyond National Pledges

A Paris-style agreement among countries would raise current global biodiversity conservation toward safer levels. However, national governments are unlikely to provide sufficient funds to enable global conservation to reach safe levels of biodiversity. Again, the Paris Agreement is instructive. Current national pledges, if fulfilled, will limit green-house gas emissions substantially by 2050, but unless pledges are amended to be more ambitious, the aggregate reduction will fall short of limiting global warming to 2°C. Although some corporations have announced voluntary pledges and low-carbon strategies to comply with the Paris Agreement, the private sector does not participate formally in the accord, nor do corporations contribute to its climate financing. A recent proposal advocates that the Paris Climate Change Agreement should add a formal mechanism to allow corporations, cities, and other nonstate actors to formally join the accord (7).

We should expect a similar outcome from any new global agreement on biodiversity that relies just on targets and funding by governments. Overcoming the critical funding gap and extending the Aichi Targets for saving global biodiversity thus requires not only a Paris-style deal but also the direct involvement of the private sector. Cities, nongovernmental organizations, and other nonstate actors could also have a role, as proposed for the Paris Agreement (7). Corporations in key sectors—such as seafood, forestry, agriculture, and insurance—have a considerable financial stake in global biodiversity conservation and thus should be able to formally join the global agreement. As full participants, companies would declare their own corporate targets, policies, and timelines, subject to 5-year review, for attaining the overall goal of conserving at least 50% of terrestrial, inland water, coastal, and marine habitats by 2050. In addition, corporate participants should provide financial and technological assistance for conservation in developing countries, through international bodies such as the GEF.

Rationale for Corporate Involvement

Corporations that undertake climate change mitigation may not gain financially from their actions. Instead, the benefits from averting global warming occur only over the long term and are shared widely. By contrast, certain industries—such as seafood, forestry, agriculture, and insurance—can benefit directly from supporting biodiversity conservation. For example, conserving marine stocks could increase annual profits of the seafood industry by more than $50 billion (8); similarly, protecting coastal wetlands could save the insurance industry $52 billion annually through reducing flood damage losses (see the table) (9). The inclusion of corporations alongside governments in the design and implementation of a global agreement for biodiversity could help coordinate and align incentives to support greater and more effective conservation. This is especially important for agricultural concerns, which if they agree to join the global agreement for biodiversity could curtail global land-use change that is threatening terrestrial biodiversity (1, 3). For example, agriculture has an incentive to protect habitats of wild pollinators, who along with managed populations enhance global crop production by $235 billion to $577 billion annually (10). The distinctive partnership between countries and companies may also create new marketing opportunities, such as certified and legitimate product and labeling schemes, further boosting benefits from biodiversity conservation and creating additional incentives to support a global agreement for biodiversity.

Some leading corporations and industries in natural resource–based sectors are already taking concrete steps toward conserving biodiversity. For example, 10 of the 13 seafood companies that control up to 16% of the global marine catch and 40% of the largest and most valuable stocks (11) have committed to the Seafood Business for Ocean Stewardship initiative for more sustainable management of seafood resources and the oceans (12). Similarly, in 2006 the International Council of Forest & Paper Associations, which represents the global forest products industry, committed itself to improving energy efficiency, reducing emissions of greenhouse gases and other pollutants, increased recycling, controlling illegal logging, and sustainable forest management (SFM) certification (13). Between 2000 and 2015, the total SFM-certified area supplying the forest products industry increased from 62 million hectares (Mha) (12% of the total forest area) to 310 Mha (54% of the total forest area) (13).

Financial benefits from biodiversity conservation

Examples of biodiversity financial benefits and potential investments by key global industries

Designing a Global Agreement for Biodiversity

The first step in designing a global agreement for biodiversity would be for the COP of the CBD, which comprises solely national governments, to begin negotiating such an agreement. The key objectives of the COP should be to establish a global target—such as conserving at least 50% of terrestrial, inland water, coastal, and marine habitats by 2050—and an overall financing goal, such as providing $100 billion annually to assist conservation in developing countries.

The agreement should also include a mechanism for corporate leaders to formally commit their organizations to the accord's global conservation target and financing goals. Individual corporations and industrial organizations can then be invited to accept, or accede to, the negotiated agreement. By joining the global agreement for biodiversity, companies and associations could cooperate with governments to establish well-defined, quantifiable conservation goals for critical habitats and determine the financing targets and timelines for providing assistance to developing countries.

For example, if they join the accord, leading corporations and associations in the seafood, forestry, agricultural, and insurance industries should be involved in establishing the targets for marine, terrestrial, and coastal habitat and biodiversity conservation that are consistent with the overall global conservation goal and timeline. These targets could include specific objectives relevant to each industry, such as increases in marine stocks for seafood companies, forest area protection for forestry industries, and coastal wetland habitats for insurers (see the table). Furthermore, as part of the global agreement for biodiversity, individual companies should pledge their own business targets, policies, and timelines for attaining the overall industry goal.

Participating corporations could also partner with governments in providing financial and technical assistance for conservation in developing countries. Because much of the world's remaining biodiversity habitat is in tropical zones, there is a direct financial benefit to natural resource–based companies that assist developing countries in protecting this habitat. For example, if the seafood, forestry, and insurance industries allocated just a small fraction of the likely revenues and profits they earn from conservation to assist developing countries, this could raise $25 billion to $50 billion annually in additional funding (see the table).

Such a corporate contribution would mean that these industries would share with governments in meeting the estimated $100 billion annual funding needed to protect biodiversity (3). The financial commitment could be even larger if other major global industries and corporations with a stake in biodiversity conservation, such as the food and beverage industry and other agricultural concerns, also agreed to join the global agreement for biodiversity and contribute to its funding objectives. For example, if agriculture contributed 10% of the estimated $235 billion to $577 billion that it receives annually in wild and managed pollination services (10) to the agreement in order to conserve, create, and restore wild pollinator habitats, this would amount to about $20 billion to $60 billion per year in additional financing.

A global agreement for biodiversity would engage government and industry, and hopefully other nonstate actors, in a manner unparalleled in the history of conservation. In addition, the current global biodiversity crisis is in large part due to the lack of international commitment and funding over the past 25 years. A global agreement for biodiversity would also overcome these shortcomings. Ensuring safe levels of global biodiversity will require the corporations that can benefit financially from conservation to join efforts in order to avoid continued irreversible loss of biodiversity.


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