Living in Peace with Nature: COP16

The 16th Convention on Biological Diversity (CBD) will be held in Cali, Colombia from October 21 to November 1, 2024. This year’s COP16 theme “Living in Peace with Nature” reflects the urgency of global collective action for biodiversity. In addition to the COP16 meeting, the 11th meeting of the Cartagena Protocol (CP-MOP-11) and the 5th meeting of the Nagoya Protocol (NP-MOP-5) will also be held simultaneously, focusing on biosafety and access to and use of genetic resources respectively.

Foundation of Biodiversity Protection: Reviewing COP15 Goals Progress

COP15 in 2022 proposed the “Kunming-Montreal Global Biodiversity Framework,” establishing 23 measurable and trackable targets to halt biodiversity loss. The most representative is “30x30,” aiming to protect 30% of global land and oceans by 2030, similar to the 1.5-degree target in climate change issues. However, according to the latest reports, COP15 targets such as sustainable use of wild species, controlling invasive species, and raising $200 billion annually for biodiversity protection funds have not yet been implemented. COP16 parties will take stock of the progress and resource gaps of these targets.

Main Negotiation Issues: National Biodiversity Commitments, DSI Sharing, and Financing

1. Progress and New Targets for National Biodiversity Commitments

To achieve COP15’s goals, countries should demonstrate their respective national commitments. However, progress is clearly not as expected. Currently, only 25 countries (including China, Canada, Australia) and the EU have submitted updated biodiversity protection targets, while the other 170 countries have yet to announce new commitments. Among the world’s 17 biodiversity-abundant countries, only 5 have made new commitments. -> COP16 will review these targets and progress, develop plans for the 2026 progress review, and prepare for the first global progress review at COP17 in 2026.

2. Digital Sequence Information (DSI) Sharing and Fund Allocation

DSI use and benefit-sharing issues are expected to be a focus of the meeting. Although DSI has enormous potential in biodiversity research, funding responsibilities and national database coverage remain controversial. For example, the US opposes using DSI royalties for development aid, believing resources should remain in data-providing countries. Meanwhile, the EU and Japan also oppose expanding DSI use to national public databases. -> COP16 will continue to negotiate this issue, balancing the interests of developing and developed countries while ensuring fair use of DSI.

3. Private Capital Entry into Nature-based Carbon Markets

Private capital integration into nature-based carbon markets could accelerate biodiversity financing, but this issue is equally challenging. Brazil strongly opposes such carbon credit trading, concerned about the commodification of natural resources and potential exploitation issues. On the other hand, the EU and Australia support this plan, provided that double-counting of carbon credits is prevented. This controversy reflects the divergent values of different countries regarding biodiversity: some view it as a resource that should be protected, while others see it as a tradable asset. -> COP16 negotiations will bring new opportunities for the biodiversity credit market. As this market is in its early stages of development, understanding and recognition of biodiversity credits are still limited across sectors, requiring time for development.

COP16 Implications for Businesses…

1. Impact and Dependence

Businesses will inevitably become important participants in achieving biodiversity goals. Business operations not only affect biodiversity, but biodiversity stocks will also influence the abundance of business production inputs. This point alone seems sufficient to make businesses take notice of this issue.

2. Risks and Responsibilities

As 196 parties gradually implement biodiversity protection policies, businesses will face higher compliance and reputational risks. For example, businesses and their supply chains may damage ecosystems during production, procurement, and operations. Businesses should responsibly manage their supply chains to avoid and mitigate damage to natural habitats, or face legal and reputational losses.

3. Opportunities and Innovation

The biodiversity protection trend driven by COP15 and 16 has created numerous investment and market opportunities for businesses, such as biodiversity credits, biodiversity funds, and financing, creating not only sources of funding for businesses but also opportunities for impact investing.