Joaquim Levy
Author’s bio: Joaquim Levy is a former Finance Minister of Brazil and the former Managing Director and CFO of the World Bank Group.
For as long as I can remember, biodiversity has never been central to global climate negotiations. It was at best a side consideration. However, during the 2022 UN Biodiversity Summit—known as COP15—almost 200 countries committed to halting and reversing nature loss by 2030, as well as to raising billions in new finance. Since then, nature has seen a steady inclusion in global diplomatic moments.
Among the countries committed to the targets is Brazil, which reduced deforestation in the Amazon by two thirds in the last year and a half. But the challenges to protect nature persist: some of the worst wildfires in a decade swept the west of Brazil this month, owing to the instability of our climate with worsening global warming.
Forests are in danger everywhere in the world. That includes rich, temperate countries such as Canada, which saw wildfires consume forests the size of England in 2023. The danger is probably even bigger in poorer, tropical countries, such as the Democratic Republic of Congo, which is home to the world’s second largest rainforest, abundant in wildlife. In the DRC,the question becomes how a country with one of the lowest incomes per capita can afford protecting a rainforest that holds about three times the annual global carbon emissions from fossil fuels.
Preventing the destruction of such a valuable ecosystem will require international resources to ensure that people living within and near the forests are economically better off by keeping them protected. This isn’t just a local problem. The destruction of ecosystems in one country can have dire welfare and geopolitical implications elsewhere. Wealthy countries should be supporting those that are economically poor but biodiversity rich for the simple fact that it is within their own interest.
Colombia and Brazil are set to host important international summits in upcoming months that could start to tackle this conundrum. Colombia will host the next UN Biodiversity Summit COP16 this October, and Brazil the Climate COP30 in November next year. Ways to advance the targets agreed in 2022 and finance the protection of forests and wildlife will be at the heart of negotiations in both global summits.
At COP15, countries agreed on a target of raising $200 billion a year in new finance for nature by 2030. A fifth of that amount was pledged to go to Indigenous peoples and local communities as the prime guardians of nature, in addition to being the first inhabitants of these areas. As part of this goal, high-income countries should be coming forward to contribute $20 billion in new public money by 2025. However, only two of them have been found to be paying their fair share so far.
If rich countries fail to deliver, it will inevitably hurt the chances of next year’s climate change conference, which will be hosted in Brazil, in achieving significant progress in protecting forests and holding the world temperature down in the future.
The International Monetary Fund and other institutions have noted that while funds to protect biodiversity and slow-down climate change remain scarce, the world channels half a trillion dollars to subsidise fossil fuels and other polluting industries every year. A plan is needed to address this discrepancy—and may well emerge from the Colombian biodiversity summit next month and the global climate summit in Baku later in the year.
Tackling fossil fuel subsidies is an imperative strategy for some of the world’s poorest, such as family farmers, who receive little of current subsidies despite being crucial for food production and action on climate change. Brazil spends close to $ 15 billion a year to support small farmers and help them to adopt and use climate-friendly practices on their lands. These families have been crucial to ensuring food diversity at Brazilian tables and reducing the dependence on unhealthy, super-processed food. Other countries in Latin America are following a similar path, but a global effort is needed to support small scale farmers in the poorest countries to switch to nature-friendly, climate beneficial tools.
To get on track to meeting the $200 billion financing commitment by 2030, we also need new ways to pay for nature. There are many ways to pay whilst stimulating a new economy that also provides jobs and alleviates poverty, as I wrote back in 2017. Brazil was one of the creators of a new fund that can be instrumental to save forests and improve livelihoods in Asia, Africa and Latin America by paying out yearly to communities who are reducing or keeping deforestation rates low. Rich and poor countries will be able to contribute to this fund, while the private sector may find there a complement to a global market for carbon and biodiversity credits of high integrity, thus investing in this and other funds for reputational and compliance purposes.
Of course, the upcoming UN meetings will provide just the first steps and the political momentum to advance biodiversity and climate finance. Negotiators at Colombia’s COP16, which wraps up this week, are aiming, for instance, at setting up mechanisms to mandate cosmetics and pharmaceutical companies pay for the genetic information from developing countries that underpins their global products. More generally, attracting private investment will also require innovative techniques to measure the value of ecosystems and the best way to protect them.
The political will of governments that is needed to mobilise resources and stimulate companies to fund the protection of biodiversity and tropical forests will be massive. The science and governance to ensure the efficiency and fairness in using such funds will be complex. However, these challenges should not be a deterrent to action. We already know that if we invest wisely and pay committed people to protect nature, it will protect us. If we don’t, we’ll pay the highest price.
Photo by Geio Tischler on Unsplash
