Background & Context
ODI, an independent think tank, has produced the first systematic analysis of individual countries’ responsibilities toward meeting the target of providing at least $20 billion per year of international biodiversity finance from developed to developing countries by 2025.
The report, A fair share of biodiversity finance: Apportioning responsibility for the $20 billion target by 2025, comes as the natural world is facing greater threats than ever before, with up to one million species facing possible extinction, many within decades.
Without immediate and ambitious action, continued loss of nature will have serious implications for food and water supplies, disease outbreaks, and peace and security globally. Much of the world's remaining biodiversity is located in developing countries, so supporting them with biodiversity finance is crucial for safeguarding a livable planet.
In light of this worsening crisis, 196 countries came together in 2022 to agree to a new global plan for protecting biodiversity – the Kunming-Montreal Global Biodiversity Framework (GBF) – which included the most ambitious targets ever established for ecosystem restoration and land and ocean conservation. A centerpiece of this plan is the target to protect or conserve at least 30 percent of the planet’s land and ocean by 2030, which represents roughly a doubling of current land protections and a quadrupling of ocean protections.
The $20 billion target is the most imminent of several finance targets agreed in the GBF, and the only target for mobilizing additional resources with a deadline of 2025.
While the developed countries that are parties to the UN Convention on Biological Diversity (CBD) agreed to the $20 billion target, there were no details provided about individual country’s portions of the $20 billion. This ODI nature finance report addresses that data gap.
ODI assessed each developed country’s ‘fair share’ of the $20 billion based on each country’s historic responsibility for biodiversity depletion measured by ecological footprint over the past 60 years, capacity to pay measured by gross national income, and population. The analysis then examined each developed country’s progress towards its fair share of international biodiversity finance based on 2021 data, the most recent data reported by governments.
Developed countries that are party to the CBD are the only entities obligated to reach this target, although the target also invites other countries, businesses, and philanthropies to voluntarily assume those obligations and make additional contributions.
The ODI nature finance report reveals serious gaps in key countries' contributions, but it should not be viewed as an effort to expose shortcomings. Instead, the report reveals the starting line, highlighting in clear dollar figures where each country's international public finance was at the end of 2021 – before the GBF was agreed to at COP15 in 2022 – and what ambition for international nature finance must look like for each country to meet their fair share of target 19 (a) on time.
With just months one year until the 2025 deadline, this report shines a spotlight on the importance of the $20 billion target as the first major test that the world faces in implementing the new biodiversity plan and serves as an urgent call to action for all donor countries to increase their investment in nature.
Report Highlights and and Implications
Only two countries were providing their fair share of the $20 billion:
Norway and Sweden provided more than their fair share in the most recent reporting period (2021).
Three countries were close to providing their fair share of the $20 billion:
Germany and France came very close to paying their fair share of the $20 billion, and Australia was not that far off.
Over 80% of developed countries were providing less than half of their fair share of the $20 billion:
23 countries of the 28 members of the OECD’s Development Assistance Committee (DAC) analyzed in the report were providing less than half of their fair share*.
The largest dollar gaps were found in Japan, the UK, Italy, Canada, Korea and Spain, which together account for 71% of the shortfall, though many other countries had larger gaps on a percentage basis.
Public finance provided 85% of total international biodiversity finance reported to the OECD:
While voluntary contributions from businesses and philanthropy and non-DAC countries are part of the solution, it is expected that meeting the $20 billion a year target will be highly dependent on increased public finance, especially due to the tight deadline.
The US is not a party to the Convention on Biological Diversity and did not sign up to the GBF and the $20 billion target, but it still has a major responsibility in increasing international biodiversity finance:
As the largest economy in the world and the owner of the largest historical biodiversity footprint, the US fair share would be to increase its annual contributions to $12 billion by 2025. This should be additional to the $20 billion negotiated and agreed by the parties to the CBD in the GBF.
Unofficial ‘up-to-date’ data on international public biodiversity finance reveals that donors are moving forward, but still a long way off the 2025 target:
ODI has used the most recent official data available from the OECD. Adding up commitments made since the 2021 OECD data results in unofficial, inconsistent and incomplete totals, and based on what has been announced thus far there is no reason to believe that we are on a trajectory to meeting the $20 billion by 2025. For example, the equivalent of $480 million annually from 29 countries has been pledged to the 8th replenishment of the Global Environment Facility** and $32 million annually from Canada, Germany, Japan, Luxembourg, Spain and the UK has been committed to the new Global Biodiversity Framework Fund***. While these are positive developments, it is not expected that these recent contributions substantially move the needle for those countries that are marked as below 50% of their fair share.
Urgent Recommendations
The Campaign for Nature recommends the following based on the findings of the ODI nature finance report.
Developed countries that are party to the Convention on Biological Diversity must urgently increase their international biodiversity finance to developing countries to meet the $20 billion target by 2025.
Developed country parties to the CBD not providing their fair share of the $20 billion must urgently increase their international biodiversity finance, as agreed to in the GBF.
Developed countries that have met their fair share should continue to show leadership and increase their contributions to help close the enormous nature finance gap.
2. Developed countries should immediately launch an initiative at the ministerial level to prioritize and coordinate the delivery of the $20 billion target by 2025.
Biodiversity loss creates local challenges with global implications, requiring a coordinated international response.
It is critical to have political leadership to drive the success of this target. Leading countries should launch a clear, coordinated initiative, involving ministers of finance and environment, to encourage all donor governments to contribute their fair share of the $20 billion. This Ministers’ Initiative should also work to encourage voluntary contributions from other countries to achieve the $20 billion. Ideally, the initiative should encourage countries to announce new commitments and provide a tracker and a clear roadmap at CBD COP16 on how to achieve the $20 billion by 2025 and the $30 billion target by 2030.
3. Non-Development Assistance Committee (DAC) donor countries should make contributions towards the $20 billion, voluntarily assuming financing responsibilities of the GBF.
Although not assessed in the ODI report as they do not report to the OECD, many non-DAC countries could and should contribute to international biodiversity finance, based on their per-capita gross national income (GNI) and historical ecological footprint, and target 19a invites contributions by “countries that voluntarily assume obligations of developed country Parties.”
The US should urgently increase its international nature finance.
While not a party to the CBD and the GBF, as the largest economy in the world and owner of the largest historical biodiversity footprint, the US should urgently increase its international nature finance.
The majority of international biodiversity finance should be in the form of grants, not loans.
International biodiversity finance should not increase the debt burdens of low and middle income countries, many of which are already suffering from a lack of resources to address poverty reduction, health care, education and other economic development priorities****. Investing in nature often means investing in public goods that yield economic returns but limited or no financial returns.
Donor countries must immediately improve the accuracy, consistency and timeliness of reporting international biodiversity finance.
Donor countries must improve reporting by the OECD which is currently the most definitive scorekeeper for the $20 billion. Specifically, donors should:
report to the OECD the biodiversity-specific portions of the overall development project amounts that have a biodiversity component (as opposed to the current practice of reporting only the full amounts of development projects that have a biodiversity component);
direct the OECD to provide explicit guidance to all its members regarding the definitions and methodologies appropriate for reporting international biodiversity finance;
direct the OECD to report amounts within one year (as opposed to the current 2-year period between funding and the OECD reporting of that funding);
provide their funding data to the OECD in a timeframe that enables the OECD to do this; and
provide evidence of progress toward the $20 billion target by the end of 2025 in order for the public to know in real time whether the target has been met by the agreed deadline.
Donor governments should mobilize private resources through regulation and incentives and not rely on voluntary contributions from the private sector.
Alongside increases in public finance, governments should incentivise private and philanthropic investments in nature, which could help meet the $20 billion target. To the extent private and philanthropic contributions to international nature finance are made, it reduces the pressure on the need for public finance, which historically has accounted for 85% of international biodiversity finance from developed to developing countries, according to the OECD.
However, it takes time to put in place the policies, incentives, disincentives and regulations that are necessary to drive increased private sector investment in public goods, which makes the private sector’s contribution to filling the biodiversity gap unlikely to increase significantly by the 2025 deadline. Similarly, while some initiatives like those looking at payments for ecosystem services are laudable, it is not realistic to expect so-called “innovative finance schemes” to contribute meaningfully to meeting the $20 billion commitment. There is no track record of “innovative finance” or voluntary corporate commitments delivering substantial funding for biodiversity and they cannot be counted on as the solution, particularly before the 2025 deadline.
Philanthropists should increase their international biodiversity funding.
The OECD reports that philanthropists provided $932 million of international biodiversity finance to developing countries in 2021. Philanthropists should increase this figure and use their funding to leverage more public and private funding by partnering with governments and businesses.
Businesses and investors should increase their contributions to international biodiversity finance.
Businesses should support changes to government policies – including subsidy reform – to yield significant increases in private capital for nature. Businesses should also increase their philanthropic support for nature. Currently, total corporate philanthropy amounts to less than 6% of overall philanthropy in the United States and only a miniscule fraction of this goes to nature in developing countries.
Ministers of Finance should recognize funding for nature as an investment, not charity, and realign international finance from the destruction to the preservation of nature.
While donor government treasuries consider this a time of fiscal constraint and are restricting overseas spending, investment in key biomes is a cost effective investment in the biological resources and ecosystem services that we all depend on for clean water and air, food security, pandemic prevention, climate stabilization, as well as securing rainfall and reducing storms in donor countries and significantly reducing future costs of biodiversity loss. The World Economic Forum found that a transition to a nature-positive economy could generate up to $10.1 trillion in business value every year and create 395 million jobs by 2030.
The world is alreadyspending $1.8 trillion each year on subsidies to industries that are destroying nature. $20 billion is equivalent to only 1.1%, or about four days, of those subsidies. While the $20 billion will likely need to come from existing budgets because of the 2025 deadline, a number of new sources should be developed such as wealth taxes, taxing polluters and other levies or fees, as well as payments for ecosystem services mechanisms, to help governments meet the target to deliver at least $30 billion per year in international nature finance by 2030.
* Four members of the of the OECD DAC were not included in the fair share apportioning: the U.S. was not included since it is not party to the CBD; the European Union was not included as a separate donor, rather its internationally biodiversity finance was allocated back to its member states on a pro rata basis based on each member state’s contribution to the EU; Estonia and Iceland were not included due to lack of data.
**GEF-8 commitments totaled $5.33 billion, of which 36% (or $1.919 billion) is allocated to biodiversity. This amount spread over the four-year term of GEF-8 from 2022-2026 results in the equivalent of $480 million annually for biodiversity.
***Pledges to the GBFF total $225 million and, when spread over the 7-year term of the GBFF from 2024-2030, result in the equivalent of $32 million annually for biodiversity.
**** In fact, developing countries’ debt service repayments have reportedly surpassed aid and investment coming into them.