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TWN Info Service on Biodiversity and Traditional Knowledge (Oct14/09)
21 October 2014
Third World Network

This article was first published in SUNS #7898 Tuesday 21 October 2014

Biodiversity: Finance targets reaffirmed, concrete flows questionable

Beijing, 20 Oct (Chee Yoke Ling) – With no concrete increase in financing for biodiversity in sight, concerns are growing that most developed countries are retreating from their commitment to provide financial resources to developing countries.

At the 12th Meeting of the Conference of the Parties (COP 12) to the Convention on Biological Diversity (CBD) that was held on 6-17 October 2014, in Pyeongchang, Republic of Korea, the target for international financial resource flows from developed to developing countries was a thorny issue that had to be resolved at the ministerial level.

There was contention over the attempt by Switzerland to postpone the previously agreed deadline for doubling biodiversity-related international financial resource from 2015 to 2020, and a proposal by a group of developing countries to double the flows again in 2017 due to the huge gap in the financing needs identified by some studies.  

A proposal by Latin American and Caribbean countries to review the target at COP 13 in 2016, with a view to enhancing flows from developed to developing countries, was also not acceptable by developed countries.

There was also concern at the Pyeongchang COP meeting over the apparent move away from the commitment of developed countries to provide new and additional financial resources to developing countries under Article 20 of the CBD, to other sources including South-South cooperation.  Developed country Parties want to include financial resources from “all sources” which would include also South-South cooperation, the private sector, foundations, non-governmental organizations and academia. Public sector funding as the North-South commitment under the CBD was, as one developing country delegate said, “disappearing into the horizon”.

There is at the same time a growing emphasis on mobilizing domestic resources, that developing countries agreed to in previous COP decisions, but are clearly not sufficient to implement the CBD’s Strategic Plan for Biodiversity 2011-2020 and its Aichi Targets. 

[The second report of the High Level Panel on global assessment of resources for implementing the CBD's Strategic Plan for Biodiversity, presented to COP 12, reiterates that estimates at global, regional and national levels all point to a substantial gap between the investments needed to deliver biodiversity targets and the resources currently allocated. This is true for all of the Aichi Targets. It referred to a 2012 review that estimated current levels of global funding for biodiversity at between USD 51 and 53 billion annually, compared to estimated needs of USD 300 to 400 billion annually.

Aichi Target 20 states: "By 2020, at the latest, the mobilization of financial resources for effectively implementing the Strategic Plan for Biodiversity 2011-2020 from all sources, and in accordance with the consolidated and agreed process in the Strategy for Resource Mobilization, should increase substantially from the current levels. This target will be subject to changes contingent to resource needs assessments to be developed and reported by Parties."]

After long drawn negotiations that ended at the ministerial level on 15-16 October, the four Hyderabad COP 11 targets were reaffirmed with the dropping of the word “preliminary”.  There was no agreement to use the words “final targets” – in 2012 at COP 11 in Hyderabad, India developed countries did not want to commit to numerical targets for international flows and the compromise after very difficult negotiations were a set of “preliminary targets”. The word “final” is not in the Pyeongchang decision. COP 12 President Mr. Seong-kyu Yoon (Minister of Environment of the Republic of South Korea) facilitated the informal consultations that led to the final outcome.

Accordingly, COP 12 in paragraph 1 of the decision on “Resource Mobilization” (UNEP/CBD/COP/12/L.32)“reaffirmed its commitment to an overall substantial increase in total biodiversity related funding for the implementation of the Strategic Plan for Biodiversity 2011–2020 from a variety of sources” (the wording of the COP 11 decision).

It “adopted the following targets for resource mobilization, under Aichi Target 20 of the Strategic Plan for Biodiversity 2011-2020, as follows: …”

Paragraph 1(a) is on the international flow target: “Double total biodiversity-related international financial resource flows to developing countries, in particular least developed countries and small island developing States, as well as countries with economies in transition, using average annual biodiversity funding for the years 2006-2010 as a baseline, by 2015, and at least maintain this level until 2020, in accordance with Article 20 of the Convention, to contribute to the achievement of the Convention’s three objectives, including through a country-driven prioritization of biodiversity within development plans in recipient countries; …

Sub-paragraphs (b) to (d) are essentially national targets from the COP 11 decision (see below).

However there is now an additional target in sub-paragraph (e): “Mobilize domestic financial resources from all sources to reduce the gap between identified needs and available resources at domestic level, for effectively implementing by 2020 Parties’ National Biodiversity Strategy and Action Plans, in accordance with Article 20; …

Observers note that there is no explicit reference to the Rio Principles in both the COP 11 and COP 12 decisions, and thus the fundamental principle of common but differentiated responsibilities (CBDR) that underlies the CBD financial resources commitments may be undermined. In the 2010 Nagoya COP 10 decision X/3 (“Strategy for resource mobilization in support of the achievement of the Convention’s three objectives”) preambular paragraph 3 reads as follows:

Reaffirming the commitment of Parties to meet the obligations set out in the provisions of Article 20 of the Convention and in accordance with the Rio Principles, …

This was a highly contested paragraph that developing countries insisted was necessary, to ensure that CBDR that is operationalized in Article 20(2) and (4) is kept in the forefront. CBDR accordingly applied to ALL the targets including those that require developing countries to take domestic actions.  Developing countries are already taking national actions and the COP 12 decision “acknowledges that, in many developing countries, domestic resources already cover the largest share of biodiversity-related resource mobilization” (preambular paragraph 8). But these are not enough for the scale of need.

[Article 20(2) of the CBD states that: “The developed country Parties shall provide new and additional financial resources to enable developing country Parties to meet the agreed full incremental costs to them of implementing measures which fulfil the obligations of this Convention …

Article 20(4) states that: “The extent to which developing country Parties will effectively implement their commitments under this Convention will depend on the effective implementation by developed country Parties of their commitments under this Convention related to financial resources and transfer of technology and will take fully into account the fact that economic and social development and eradication of poverty are the first and overriding priorities of the developing country Parties”.]

The COP 11 and COP 12 decisions use the words “in accordance with Article 20 of the Convention” and “consistent with decision X/3”.  In the operational paragraph on the target of doubling of international financial resource flows by 2015 there is no reference to decision X/3.

There is reason for serious concern because indirect references to the content of previous decisions can remove institutional memory on the agreement that the Rio Principles, especially CBDR, apply to the financial mobilization targets. The move by most developed countries to shift the doubling of international financial resource flow target beyond North-South flows was evident in the Pyeongchang negotiations. Several developed country Parties pointed to the fact that the words “from developed” countries are not in paragraph 1(a). If one follows this argument, then developing countries will also have to double their contributions to other developing countries, and this could be captured by including South-South cooperation in the equation.

When China raised the issue of South-South cooperation being voluntary and therefore cannot be included in the category of “other official flows” (that are not Official Development Assistance or ODA), it was told during the plenary of Working Group 2 on 17 October that the detailed 14-page Financial Reporting Framework in Annex II of the COP 12 decision is “voluntary”.  Long-time CBD observers, however, caution that this could be a slippery slope where attention and pressure could subsequently be applied to developing countries.  

Nevertheless, at China’s request, the term “other official flows” was clarified (see below).

Contact group on finance entangled

A contact group on resource mobilization and the financial mechanism was established in the first week of COP 12, co-chaired by Jeremy Eppel (the United Kingdom) and Francis Ogwal (Uganda). The contact group met nine times and addressed, inter alia: targets for resource mobilization; mobilization of domestic resources; market and non-market based instruments and biodiversity financing mechanisms; modalities and milestones for Aichi Target 3 (on incentives including subsidies); and the Financial Reporting Framework.  Eppel chaired the negotiations on resource mobilization while Ogwal chaired the one on the financial mechanism.

Due to the failure to reach consensus on the strategy for resource mobilization in the contact group, the matter was sent to the ministerial level. Minister Yoon Seong-kyu as COP 12 President held four meetings on 15-16 October attended by ministers and heads of delegation (HOD) supported by other delegation members to provide support. Co-chair Eppel was present too and tasked with assisting in the drafting of the text.

Although invitations were initially made to ministers/HOD whose delegations had been active in the contact group, other delegations that wanted to participate in the consultations were also able to do so. 

(Observers noted that the recent trend in UN negotiations, as seen in the CBD and UN Framework Convention on Climate Change where contested issues are taken to the “political” level, run the risk of being un-transparent and limited to a small group. Often, the venue and time of the informal meetings are not even known to all delegates. In Pyeongchang, the ministerial consultations were announced on the CCTV screen that displayed the daily COP schedule.)

On Friday, 17 October, Co-Chair Eppel reported to the plenary of Working Group I that consensus had been reached. At that point China raised a “technical issue” with regard to the explanation of “Other official flows (OOF)” in the Financial Reporting Framework contained in Annex II of the draft decision.

In the section on Reporting against 2015 targets, there is a subsection on “International financial resource flows” where all Parties are requested to indicate the amount of resources provided by them in support of biodiversity in developing countries, in particular LDCs and SIDS, as well as countries with economies in transition. A table for collecting baseline information for 2006 to 2010 (in order to estimate the annual average as agreed in the Hyderabad target) identifies Official Development Assistance (ODA), OOF and “Other flows” (private sector, non-governmental organizations, foundations and academia).

The explanatory text states that OOF “refers to non-ODA public funding, that is, transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as Official Development Assistance. The category also includes resources provided from other, 'non-donor' countries, i.e. through “South-South Cooperation”.

China said that according to the OECD glossary of statistical terms, OOF is defined as “Transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as Official Development Assistance or Official Aid, either because they are not primarily aimed at development, or because they have a Grant Element of less than 25 per cent.”

Therefore, China said that there should be consistency and thus South-South cooperation cannot be included in OOF.

[Developing countries in all United Nations fora consistently state that south-south cooperation is voluntary and complementary to North-South/ODA flows. Thus the June 2014 Group of 77 Summit Declaration on National Development, South-South Cooperation stated:

“We reiterate the position of the group that south-south cooperation is a complement to, rather than a substitute for, north-south cooperation and reaffirmed that south-south cooperation is a collective endeavour of developing countries based on the principle of solidarity and premises, conditions and objectives that are specific to the historic and political context of developing countries and to their needs and expectations, …]

The relevant final text of Annex II to the CBD COP 12 decision on Resource Mobilization (UNEP/CBD/COP/12/L.32) now reads as follows:

Other official flows (OOF) refers to transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as Official Development Assistance or Official Aid, either because they are not primarily aimed at development, or because they have a Grant Element of less than 25 per cent.

For the purpose of this reporting framework, information on resources provided by other, ‘non-donor’ countries, i.e. through ‘South-South Cooperation’, would also be included in this column, as appropriate.”

Key decisions on resource mobilization

The agreed targets for resource mobilization in the COP 12 decision (paragraph 1) are as follows:

•  Double total biodiversity-related international financial resource flows to developing countries, in particular LDCs and SIDS, as well as countries with economies in transition, using average annual biodiversity funding for the years 2006-2010 as a baseline, by 2015, and at least maintain this level until 2020;

•  Endeavor for 100%, but at least 75%, of Parties to have included biodiversity in their national priorities or development plans by 2015 and have therefore made appropriate domestic financial provisions;

•  Endeavor for 100%, but at least 75%, of Parties provided with adequate financial resources to have reported domestic biodiversity expenditures, as well as funding needs, gaps and priorities, by 2015, in order to improve the robustness of the baseline;

•  Endeavor for 100%, but at least 75%, of Parties provided with adequate financial resources to have prepared national financial plans for biodiversity by 2015, and that 30% of those parties have assessed and/or evaluated the intrinsic, ecological, genetic, socio-economic, scientific, educational, cultural, recreational and aesthetic values of biological diversity and its components; and

•  Mobilize domestic financial resources from all sources to reduce the gap between identified needs and available resources at the domestic level, for effectively implementing by 2020 Parties’ National Biodiversity Strategy and Action Plans, in accordance with Article 20 (of the CBD).

(The first 4 targets are reaffirmation of the COP 11 preliminary targets while the fifth was added by COP 12.)

In paragraph 3, the COP “Further decides to review, (at COP 13), progress towards the above targets and their adequacy, and to consider the need for appropriate action; based on information provided by Parties through the Financial Reporting Framework, including their respective identified needs and priorities, …”

This review uses the weaker text of “consider the need for appropriate action” in contrast to what developing countries has wanted, i.e. enhance the target for international flows from developed to developing countries.

The COP also urges Parties and other governments (referring to non-Parties of which the United States is practically the last country left) to develop national resource mobilization strategies or finance plans, using the targets for resource mobilization above as a flexible framework.

Regarding the strategy for resource mobilization, COP 12 in paragraph 14 of the decision urges Parties and other governments to: further develop and use various sources of funding, as appropriate in accordance with national circumstances and conditions, including market and non-market-based instruments and biodiversity financing mechanisms.

The term “biodiversity financing mechanisms” is now used instead of the controversial “new and innovative financial mechanisms” that at COP 10 in 2010 triggered deep concerns from Bolivia as the term reflected a bias for market-based mechanisms. However there is a footnote in the COP 12 decision as follows:

The term ‘biodiversity financing mechanisms’ refers to ‘new and innovative financial mechanisms’ under Goal 4 of the Strategy for Resource Mobilization, adopted by the Conference of the Parties at its ninth meeting (Decision IX/11). New and innovative financial mechanisms are supplementary to and do not replace the Financial Mechanism established under the provisions of Article 21 of the Convention (see preamble to Decision X/3).”

At COP 12 last week, several developing country Parties also raised concerns that the use of the word “mechanism” could be confusing as Article 21 of the CBD establishes a distinct financial mechanism.

In paragraph 15 the COP adopts the voluntary guidelines on safeguards in biodiversity financing mechanisms in Annex III, to be taken into account when selecting, designing and implementing biodiversity financing mechanisms.

On modalities and milestones for Aichi Target 3 (incentives including subsidies) in paragraphs 19 to 23, the COP adopts the milestones contained in Annex I of the decision as a flexible framework that includes timelines from 2015 to 2018. Parties are invited to report progress in achieving these milestones, as well as any additional milestones and timelines established at the national level; and include information on practical experiences in the implementation of biodiversity-related positive incentives and lessons learned in applying options for overcoming obstacles encountered in implementing policies for addressing harmful incentives.  According to several developing country delegates, meeting these milestones will be a major challenge and.

Regarding financial reporting, transparency and accessibility of information (paragraphs 24 to 33), the COP adopts the revised 14-page Financial Reporting Framework in Annex II.  The deadline for the online reporting is 31 December 2015, where feasible.

The first meeting of the Subsidiary Body for Implementation of the Convention (SBI), that has just been established by COP 12, will consider options for strengthening information systems on biodiversity-related international financial flows to developing countries, as well as domestic resource flows, making use of the Financial Reporting Framework. This will be with a view to further increasing transparency and accessibility of information to support the implementation of Article 20 of the Convention. According to some observers, the situation now is not just about monitoring developed country Parties’ financial commitments but also the efforts of developing countries.

Statement by Bolivia on interpretation and reservation

At the closing plenary of COP 12 on the night of 17 October, after the financial mobilization decision as adopted, Bolivia made a statement on its interpretation and reservation that it requested to be reflected in the records of this meeting.

Bolivia stated that it interprets the paragraph 1 (a) of the decision under Article 20(4) of the CBD as international financial flows that are public funds from developed to developing country Parties. Any interpretation that referred to a variety of financial sources for developing countries that include South-South cooperation, and private funding, does not reflect the Article 20 of the Convention, said Bolivia.

It further said that it rejects the concept of the “Green Economy” because this is a tool for promoting the privatizing of nature and society. Bolivia, in accordance to its national legislation, therefore reserves its position on all references to the instruments of implementation of the Green Economy included in the Annexes I, II, III and IV of this decision of Resource Mobilization of the COP12 of the Convention, and particularly references related to “market-based approaches”, “biodiversity financing mechanisms” as market-based instruments, and “new and innovative financial mechanism" as referred to in the strategy for resource mobilization adopted by the COP at its ninth meeting (Decision IX/11).

Bolivia reserved any interpretation derived from these approaches, mechanisms and instruments that could be construed as means for the commodification and financialization of the environmental functions and cycles of nature, or as means that allow developed countries to evade their commitments and obligations to developing countries under the CBD.  Bolivia reaffirmed that market-based approaches are not the solution to restore the balance between humankind and Mother Earth. 

It further upheld and reaffirmed, as stated in the paragraph 56 of the Outcome Document of the Conference on Sustainable Development of Rio+200 “The Future We Want”, that there are different approaches, visions, models, and tools available to each country, in accordance with its national circumstances and priorities, to achieve sustainable development.

Bolivia has opted in a sovereign manner for the vision of “Living-well in balance and harmony with Mother Earth” through holistic and comprehensive development in harmony and balance with Mother Earth, and will implement any action under the Convention in this framework, said its head of delegation, Mr. Diego Pacheco.

“Pyeongchang Roadmap”

COP 12 agreed to the Pyeongchang Roadmap that comprises five decisions: (i) mid-term review of progress towards the goals of the Strategy Plan for Biodiversity 2011-2020 and the Aichi Targets; (ii) biodiversity and sustainable development; (iii) review of progress in providing support in implementing the objectives of the Convention; (iv) cooperation with other conventions; and (v) a strategy for resource mobilization.

COP 12 President Seong-kyu Yoon closed the meeting at about 8:40 pm on Friday, 17 October. This was an early end compared to the last two COP meetings in Nagoya, Japan (2010) and Hyderabad, India (2012) that went on till the early hours of Saturday – in both cases due to the deep differences between developing and developed countries over concrete targets for the mobilization of financial resources.

In an official press release on 17 October, the CBD Executive Secretary, Braulio Ferreira de Souza Dias, said that,“Parties have listened to the evidence, and have responded by committing themselves to redoubling their efforts in support of the vision of the Strategic Plan for Biodiversity, including the financial resources needed to make this a reality.”

More than 3000 delegates from governments, civil society groups, indigenous peoples and local communities, business and international organizations attended the meeting.  Thirty-three decisions were adopted. Other key decisions from COP 12 will be reported in a separate article.

CBD COP 12 was convened concurrently with the first meeting of the COP serving as the Meeting of the Parties to the Nagoya Protocol on Access and Benefit-sharing. There will be a separate article, too, on the outcomes of Nagoya Protocol meeting.)+

 


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