Landmark Agreement on Preserving Biodiversity Deadlocked Over Financial Compensation to Developing Countries
Health & Environment 16/12/2022 •
The majority of the world’s biodiversity is found in developing countries. Compensation to developing countries for preservation of biodiversity, and use of genetic resources, threaten accord of a landmark agreement to preserve the world’s biodiversity.

The United Nations has described it as “the most important conference on biodiversity in a decade,” aimed at creating a Paris Agreement-style agreement for biodiversity.

Negotiations amongst more than 100 environment ministers and 196 governments at the Conference on Biodiversity in Montreal on the world’s 15th attempt to come to an agreement to protect the planet’s biodiversity are on the brink of collapse.

The agreement includes a precedent-breaking call to conserve 30% of the world’s land and seas by 2030 for biodiversity preservation. 

But currently, 54 developing countries are demanding that in exchange for their support of that pledge a new Global Biodiversity Fund be created to compensate them for the income lost due to the preservation of ecosystems that could be mined, farmed and otherwise exploited for profit.

Storm brewing over genetic ‘access and benefit-sharing’

In the global health sphere, a parallel storm is brewing at the CBD over a draft proposal to explicitly include ‘digital genetic information’ (DSI) in the Convention’s Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits. That would strengthen the hand of developing countries in demanding “benefits” from commercial products developed as a result of the sharing of genetic codes, as well as actual biological samples.

The fact that the Nagoya Protocol has in some countries been applied to harmful pathogens, and not only beneficial plants and animal species, has triggered a polarizing argument among global health groups split along familiar lines.

Groups advocating for the lowering of IP barriers and medicines access have welcomed the explicit inclusion of Digital Genetic Information into the convention as a door to forcing big pharma to pay low-income countries for drugs developed to combat diseases endemic in their region.

Pharma industry leaders, backed by developed countries, have expressed fears that conditioning DIS sharing to financial benefits would impede the rapid sharing of genetic data on emerging pathogens that pose a global health threat.

That sharply contrasts with the experience during SARS-CoV2, when a Chinese scientist posted the genetic code to the new virus in an online platform within days of WHO’s outbreak announcement.

Negotiations on genetics and other issues carry echoes of COP27

Echoes of the COP27 negotiations in Sharm el-Sheikh are everywhere, and the wedge threatening to derail negotiations is a familiar one: compensation for the particular burden that developing countries must shoulder in biodiversity protection.

Yet unlike COP27, world leaders aren’t attending the high-level segment of the conference. Canadian Prime Minister Justin Trudeau, whose country is hosting the meetings, is the only world leader to have addressed COP15.

Led by Brazil, the demand for a ‘loss-and-damage’ style financial instrument for biodiversity protection calls for a “new and additional and separate” fund from other climate and development funding to be established next year and become operational by 2025.

Developed countries have so far taken a hard line against the creation of the fund.

A draft of the Brazilian delegation’s proposal also calls for rich countries to pay “historical reparation” for the “irreversible losses and damages” they have caused to biodiversity.

Brazil also joined a group of countries including Indonesia and the African Group, which represents the 54 African Union member states at the United Nations (UN), in calling for compensation for the sharing and use of genetic resources to be included in the agreement. This includes the use of things like pathogen, virus, or bacterial sequences to create medicines such as vaccines.

“Humanity’s war on nature is ultimately a war on ourselves,” UN Secretary-General Antonio Guterres told the conference. “It is only by investing in planet earth that we can safeguard our future.”

For now, the shape that the future will take remains an open question.

Fund or no fund?

The confusing similarity in name between COP15 in Montreal and COP27 in Sharm el-Sheikh has been compounded by the fact their key drama has revolved around the same question: fund or no fund?

Brazil is leading the charge on demands for the new biodiversity fund and is supported by India, the African Union member states, South Africa, Pakistan, and a series of other developing nations. Low-income and developing countries hold the majority of the world’s biodiversity.

The EU, UK, and JUSCANZ – a negotiating alliance of major economies including the United States, Japan, Canada, and Switzerland – are strongly opposed to the measure, arguing that the Global Environment Facility, a multilateral environmental fund that provides grants and blended finance for projects related to biodiversity and climate change, already exists for this purpose.

“It is extremely important that there is no new fund. It took us seven to eight years to negotiate the Global Environment Facility,” Virginijus Sinkevičius, the EU commissioner for the environment said. “Those talks about the new funds, I think they are misleading. They are not delivering any value so far.”

On Thursday, a series of Global North countries including the U.S., Netherlands and Spain presented updated financial pledges for biodiversity protection, underlining their stance that additional funding can be provided through existing mechanisms.

In the weeks leading up to the conference, the E.U. committed to doubling its international biodiversity financing to 7 billion for the 2021-2027 period, in addition to individual countries such as Germany, France, Spain, and the Netherlands doubling their respective commitments.

The proposal’s inclusion of the language of “common but different responsibilities” – a principle formalized in the 1992 United Nations Framework Convention on Climate Change under which China is considered a developing state – adds a further wrinkle to Global North resistance to the fund.

“How can the developed world recognise the magnitude of the triple planetary crisis and not respond to calls for greater ambition in biodiversity funding beyond the existing financing architecture through additional and innovative strategies and instruments?” a letter from incoming Brazilian President Lula da Silva’s transition team asked conference delegates.

A draft of the Brazilian delegation’s proposal also calls for rich countries to pay “historical reparation” for the “irreversible” damage caused to biodiversity.

Until progress on the financial front is made, negotiations are set to remain deadlocked.

Benefits for sharing of country’s genetic data : another poorly understood deal-breaker

A second, more obscure potential deal-breaker has emerged as negotiations kick into high gear: the question of ownership over digital sequence information (DSI) of countries’ indigenous genetic resources.

Digital sequence information refers to access to genetic codes typically shared through digital databases. African Union member states and Asia-Pacific countries like India and Bangladesh, have signaled they view an agreement on digital sequence information benefits sharing as a non-negotiable part of any final agreement.

Of particular ire to developing nations is the fact that freely sourced genetic information can be used to create patented products by large multinational companies, effectively locking out the country from related profits from new cosmetics, foods and other products based on their indigenous resources. While the Convention’s Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits creaed a framework to address that, this year’s conference is considering an extension of the protocol to include digital gene sequences, as well, in light of the fact that such information is increasingly being used as a substitute sharing of physical samples.

But the pharmaceutical is sounding the alarm over one particular class of biological material: pathogens. The industry has argued that placing the sequences of viruses, pathogens, or other microorganisms under the ownership of governments that can bargain for benefits before sharing the sequences, would slow the transparent sharing of information during outbreaks. And this, they argue, would have significant knock-on effects for pandemic preparedness. 

A panel on the questions of digital genetic information benefits sharing and the Nagoya protocol on Thursday.

Industry leaders are thus pressing for an exclusion of pathogens and viruses from the agreement.

“The Nagoya Protocol has the laudable goal of encouraging biodiversity-rich nations to share useful resources derived from their flora and fauna, while ensuring that they’re properly compensated. But if this is applied to viruses, bacteria, and other microorganisms that can cause disease (aka pathogens) this could hinder, or even prevent, the global collaboration required to find new treatments or vaccines.” said the IFPMA in an oped, published 16 December.

“Regarding negotiations on digital sequence information (DSI), any policy option or mechanism currently under consideration by member states must include an exemption for pathogens in order to prevent delays in the sharing of pathogens. The current options, as they are formulated, could have serious consequences for the surveillance of pathogens, as they are not specially tailored for the world of public health and thus risk undermining ongoing and future pandemic preparedness and response efforts,” said a December 8 IFPMA statement.

At the same time, advocates of medicines argue that vaccine sales from COVID vaccines have amounted to tens of billions of dollars, $34 billion in the case of Pfizer for 2022. With the genetic sequence underlying early patents emanating from China, the inclusion of a digital sequence information clause in the final COP15 agreement would entitle China, for instance, to a share of that money, as well as South Africa to a share of profits from the development of subsequent bivalent vaccines out of its mapping of the Omicron variant.

In addition, pathogens know no national borders. Early relatives of the SARS-COV2 virus were circulating not only in China but also in Myanmar, and the virus soon spread to dozens of countries elsewhere, including Europe. And there is no clearcut method for granting compensation to countries for sharing of genetic data.  Negotiations around the inclusion of digital sequence information in the Nagoya protocol suggests this might be done through an international mechanism that would track the access of countries and companies to genetic information, and distribute a portion of revenues or other benefits to the countries with ownership of the sequences used.

But the questions of who would make the determination of ownership, of what constitutes fair compensation, or where the line between research, development, and open-source genetic data lies, remain unaddressed.

The Sixth extinction

COP15 is taking place at a critical juncture in the fight to preserve the planet’s biodiversity. Experts believe the world to be in the middle of a 6th mass extinction event.

Unlike previous mass extinctions – the last of which occurred 66.5 million years ago – this one is not caused by natural phenomena, but by human activity.

A new report by the UN Environment Programme, released a week before COP15, warned that investment in nature-based solutions must double by 2025 if the world is to limit global warming to 1.5°C, as well as halting biodiversity loss and progressively increasing land degradation.

The World Wildlife Fund’s (WWF) 2022 Living Planet Report found an average decline of 69% in the relative abundance of wildlife populations studied around the world between 1970 and 2022, marking a staggering nearly two-thirds decline in its index in less than 50 years.

“We know what’s happening, we know the risks, and we know the solutions,” said Marco Lambertini, Director General of WWF International. “World leaders have an unmissable opportunity in December 2022 to embrace a nature-positive mission.”

The previous biodiversity framework agreed by over 200 governments in Nagoya, Japan in 2010 set 20 biodiversity targets to be achieved by 2020. Ten years later, zero of the 20 targets had been met.

If leaders fail to find a compromise, history risks repeating itself – and this time there may not be another chance to right the ship.

“Our society is at the most important fork in its history, and is facing its deepest systems change challenge around what is perhaps the most existential of all our relationships: the one with nature,” Lambertini said. “And all this at a time when we are beginning to understand that we depend on nature much more than nature depends on us. The COP15 biodiversity conference can be the moment when the world comes together on nature.”

Image Credits: Lubasi, UN Biodiversity.

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