February 20, 2025 • 30 mins
Last October, delegates from around the world met in Cali, Colombia to discuss ways to protect the planet’s biodiversity. After a promising breakthrough in Montreal, Canada three years ago, there were high hopes for that summit. But COP16 closed in shambles, with negotiators leaving before a final agreement could be achieved on key issues. Now, the summit is resuming next week in Rome. Will developed and developing countries be able to reach consensus? Reporter Natasha White, who attended part one in Cali, tells Akshat Rathi what she expects to see when COP16 reconvenes next week in Italy.
Explore further:
- Past episode about COP30’s final deal
- Past episode with sci fi writer Kim Stanley Robinson about the merits of the COP process
- Past episode with Stripe’s Nan Ransohoff about the carbon removal credit market
- Bloomberg Green reporting from Natasha White
Zero is a production of Bloomberg Green. Our producer is Mythili Rao. Special thanks this week to Sharon Chen and Jessica Beck. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Zero. I am Akshatrati today the forgotten crisis.
Here on zero. We've dedicated a lot of time at
(00:21):
covering COP twenty nine at the end of last year
in Baku. We interviewed the heads of state, the CEO
of Exonmobil, and even the COP thirty president, who by
that time hadn't been named as such. But there was
another COP last year, COP sixteen, that focused on biodiversity
in Cali, Colombia, where nations came together to try to
(00:42):
figure out how to protect natural habitats, plant, animal species
and halt the destruction of nature. If the climate crisis
is a monster wave, the biodiversity crisis could be a
Leviathan And unlike COP twenty nine, actually COP sixteen is
still not over. It ended before key agreements could be reached,
(01:04):
and so talks are going to resume next week in Rome.
I wasn't at COP sixteen, but my colleague Natasha White
was high.
Speaker 2 (01:12):
Actually I was, indeed, and thanks for having me Today.
Speaker 1 (01:15):
We're going to talk a lot more about why these
talks dragged on and what will happen in Rome. But
Natasha tell me first, how was Cali CALLI.
Speaker 2 (01:24):
So it's the capital of sugar cane in Columbia. It's
sort of nestled between mountains and the sea, and it's
also known to be the capital of salsa salsa dance,
not the salsa sauce, and it's a really vibrant town.
And this came through, i think to a great extent
in the way that Columbia hosted the COP. It was
really framed as the People's cop and the Green Zone.
(01:48):
So the area at these cops you have a blue
zone where all the official proceedings take place and you
need to have official access and it's much more managed.
But then you also have a green zone where anyone
can exhibit and the general public can visit. And in Cali,
the green zone and the blue zone were apart, so
the green zone was downtown. It was kind of in
the center of the city. It had a sort of
(02:09):
festival street festival vibe. It was open from the morning
to late at night, and there were live music events.
There was salsa. Unfortunately I didn't make any of it.
Well that's probably no bad thing. I can't dance, but
it was a really vibrant, warm place to host it,
and the cop itself was kind of nestled out of
town in the foothills of some hills, so you had
(02:31):
beautiful mountain backdrop to the conference venue and yeah, beautiful
nature all around.
Speaker 1 (02:38):
Well, you clearly got the better assignment here at Bloomberg
because you also came to Baku and that place had
no natural daylight, let alone all the beautiful mountains.
Speaker 2 (02:48):
Yeah, it's true. In Baku, we kind of walked into
a tent in a stadium. There was no natural light,
there was no fresh air, there was nowhere to stand
outside and get some daylight. In Cali, the tents were
all separated, it was hot, you know, there was water features.
It was just a much more kind of humane setting
for a COP. There was an explicit choice, I think,
to host the COP in this city because of its nature,
(03:10):
and you really feel it surrounds you. You know. We
went out for dinner one night in the old town
and we were sort of taken over by a cacophony
of frogs while we were eating.
Speaker 1 (03:26):
Well that's loud. I mean frogs I like, but I
don't like the croaking. This sounds actually quite pleasant. Well,
it seems like you had way more fun than we
did at COP twenty nine. But biodiversity cops in general
now have started to become bigger and are being given
perhaps not as much importance as climate cops, but increasing importance.
(03:47):
And what happened at COP fifteen in Montreal perhaps made
that happen because it was this big moment where one
nineteen nations reached an agreement to preserve thirty percent of
the planet's land and seas. Having that big goal set
was important. But really just to understand what is at
stake with biodiversity.
Speaker 2 (04:08):
Well, I think if you start with the numbers, WWF
does analysis which has shown that over the past five decades,
over the past fifty years, the diversity of species has
declined by I think around seventy five percent, which is massive.
So that's the numbers. I think everybody everybody feels it,
(04:29):
Like you know, in this country in the UK where
we're both based, people commonly talk about the number of
insects on their wind screens when they drive around in
the summer. And even I am in my mid thirties,
like when I was younger, I grew up in the countryside,
it was something I remember regularly not being able to
wash the windscreen well enough to see where you're going
and now it's just not the case. You know, over
the over the summer, we had the windows open and
(04:50):
the lights on and normally there'd be insects buzzing around them,
but there are none. So everybody recognizes this drastic loss
in biodiversity, and this country, the UK, is one of
the worst, but it's affecting every country in the world
and that's what this Global bio Diversity Framework that was
agreed in Montreal in twenty twenty two seeks to address.
And so the kind of overarching goal of that, which
(05:12):
is for twenty fifty, is for the world to be
living in harmony with nature. But underneath these broad goals
there's a number of i think around twenty three targets
which are a lot more specific. One of them is
the protect thirty percent of land and sea, well land
and water actually by twenty thirty. And so countries gathered
in cop this year to look at the progress that
(05:33):
they've made since that framework.
Speaker 1 (05:35):
Was agrees and even at this cop in biodiversity finance
was at the heart of the conversation. But what was
the approach to try and raise money towards what clearly
is a very important issue. Not just from a perspective
of how humans should live on the planet, but also
from the perspective of how do we sustain an economy
(05:56):
where humans thrive because nature is so important to enable
that to happen.
Speaker 2 (06:01):
Yeah, So on the money, there's a seven hundred billion
dollar per year financing gap that's been identified for tackling
this problem, and that's kind of split into two buckets. One,
which covers around five hundred billion, is about redirecting harmful subsidies,
so the money that governments pay to make cheaper things
(06:22):
that destroy nature, so fossil fuel production, chemical agriculture, things
like this, and the goal there is to redirect those
subsidies from doing harm to things that do good, so
regenerative agriculture or what's spink called the bioeconomy, basically business
that doesn't harm the planet. And then the other is
(06:43):
the remaining two hundred billion is what needs to be
raised in kind of new money from all sources, public
and privates. And that's where we see a lot of
the kind of parallels in the climate space, I think,
where it's about getting more grant money from governments, more
concessional finance governments, and multi natural development banks and more
private sectimoney invested in again things that aren't harming nature
(07:07):
but instead are sensitive to it.
Speaker 1 (07:10):
In the climate sphere, I think there is now a
certain sense that has settled, and I'm not saying it's
widely accepted and always consistent, but the fact that cleaner
energy is cheaper than fossil fuels, that investing in clean
energy is actually going to not just have an impact
on carbon, but so many other things that all cannar
(07:33):
that you know, the only way progress or economic progress
could happen is through extraction, through perhaps some amount of
harm to the environment. Has been in some ways being
broken in the climate sphere. Do you think that's been
broken in the biodiversity sphere. Do you think people understand
that it is actually possible to have economic activity that
(07:56):
does not harm nature.
Speaker 2 (07:58):
Well, I think the challenge of bio diversity and sort
of nature loss more broadly, as it's extremely cross cutting
right in some areas. I would say it's even more
fundamental in the bi diversity space. If you look at agriculture,
I think agriculture companies are not going to make any
money unless they change a business model. So in that
space it makes perfect business sense to manage the land
(08:23):
in a way that nurtures nature so that nature can
go back, you know, in terms of production. In other areas,
it's more challenging, I think, because the business model that
we're we're used to is externalizing the negativities. You know,
we dun't waste, we don't really recycle it or limit
its production. And it's those business models where it's cheapest
(08:44):
to behave in that way are the ones that really
need to fundamentally change. And that's structural and it's hard,
and it's not just about moving subsidies but overhauling an
entire way of functioning, which is a big challenge.
Speaker 1 (08:57):
And so at this COP sixteen, what were the headline
things on the agenda? And we know from headlines from
stories you've written that largely it ended in failure. But
let's just first go through what were things on the
agenda and understand why it was classed as a failure.
Speaker 2 (09:20):
What was on the agenda at the outset, which we
identified as the most important one, was a stock take.
So countries have to submit national biodiversity plans for how
they are going to achieve the targets and the goals.
As a global Biodiversity Framework and the deadline for doing
so was the beginning of cop so by that measure,
(09:43):
very few countries managed to submit their nb SAPs on time.
Some gave reasons for that, which was that they really
want to engage, for example, indigenous peoples and local communities
and defining these kind of cross cutting strategies. That takes
time and it's not easy. But nonetheless they've had two
years to do it and a lot of them most
(10:06):
of them failed, So by that measure, it wasn't a
great success. The second big agenda item was a strategy,
a resource mobilization strategy, so a way to raise this
two hundred billion dollars per year from public and private
sources to tackle nature loss. The third main agenda item
(10:29):
was finding a way to collect and share the profits
from companies that benefit from what's called digital sequence information
on genetic resources. And it's extremely technical, but in essence,
what it's about is pharmaceutical companies, cosmetics companies, biotech companies,
(10:51):
all of them make money out of products that are
based on nature's genetics and that used to be a
physical process. But in the day and age that we
live in today, obviously a lot of that has become digitized. Yeah,
so it's difficult for the countries that are home to
(11:12):
this diversity to benefit from it. So, for example, the
venom of a lizard found in Mexico and the US
inspired the blockbuster drug ozenpic for weight loss and diabetes. Well,
Mexico may well not have been remunerated for the benefits
that companies have accumulated thanks to it its biological genetic diversity.
(11:36):
So the idea of this mechanism is to find a
way to collect a portion of the profits or of
the revenue of these big pharmaceutical biotech companies and share
them with the countries from which these resources come. It's
not a kind of direct trade, but the idea is
there'll be a kind of levy of one percent of
(11:57):
profits or zero point one percent of revenue that will
go into a fund, and then that fund will distribute
money to countries that are rich in biodiversity to help
protect biodiversity. And those were the kinds of details actually
that were ironed out during the cops and throughout the
two weeks negotiators worked on this text, which one of
(12:18):
you know, a veteran negotiator, described to me as the
most complex item he's ever negotiated in his life. He
kind of likened it to quantum physics, and you can
imagine when you're talking about a voluntary mechanism to levy
certain sectors globally through a United Nations mechanism to sort
of centralize money and distribute it. There's a number of
(12:39):
questions there that are extremely difficult to iron out, and
some were ironed out and some weren't. But that was
a big focus of an event.
Speaker 1 (12:46):
So usually these COP meetings come toward and end with
all these countries negotiating and ideally coming to a consensus
that signs off on some of the headline items in
an agenda that happened at COP twenty nine with the
three hundred billion dollar climate finance goal and the attempt
to try and get the carbon markets through Article six
to be working where countries could trade corbon credits. How
(13:10):
did COP sixteen end.
Speaker 2 (13:12):
Well, it ended over a couple of days, which I
think is the first point. We were reassured in the
run up that it's very unusual to go over time,
and it ran over time and ended somewhat abruptly after
a big success of signing off on a document explaining
the ways to kind of operationalize this digital sequence information
(13:33):
fund called the Cali Fund. That was a big success,
and you had a kind of sentiment that, you know,
momentum was good and things were going well. And then
they came to the resource mobilization strategy, and after some
welcoming comments from developing countries, developed nations stood up one
after the other and just said no, no, no, no,
(13:56):
at which point I think Brazil intervened to ask if
there were still because we were in an early hours
of Saturday at that point, and some people had started
to leave to get their flights, So are there enough
people in the room to make a decision. There weren't,
and so the event ended abruptly and has been suspended
and will be resumed next month in Rome, where they
(14:17):
will iron out or try to iron out over two
or three days, which seems rather short given the contentions
the outstanding agenda items.
Speaker 1 (14:25):
So this is unusual and rare, but it's not unprecedented.
COP meetings of this kind, not just in nature or climate,
but also in other types of big un bodies tend
to have this option of suspending the COP and then
restarting it in another place. Was there Seene that you
(14:47):
remember that sort of like captured how it feels because
obviously they spent two weeks that all these people from
different countries, they really want an outcome and then they
don't have it.
Speaker 2 (14:59):
I think there are a few moments. One was the
kind of emotive intervention from the Philippines talking about the
urgency of what's being discussed when they were kind of
the countries were arguing over some details of texts. You know,
he mentioned that they've lost already recently a couple of
species of birds to typhoons, which again speaks to the
(15:20):
interconnectivity of climate change and nature lost issues, So that
there was that emotive intervention. And then shortly after an
Australian negotiator had their heads in their arms and Suzanna Mohammad,
the cop president, asked in plenary Australia, are you still awake?
And then you had a standing ovation when they signed
off the digital sequence information on genetic resources text and
(15:41):
then suddenly this total collapse and again the moment that
stuck in my mind. After the kind of show of
the whole event in Calle, you know, there was a
big opening ceremony, there was real kind of energy throughout
the event, the president just walked off the stage and
it ended. There was no closing speech, nothing, It just
collapsed and mohammed.
Speaker 1 (16:01):
The Environment Minister of Columbia was the president of COP sixteen. Well,
she was also quite active at COP twenty nine, and
it felt to me that having seen what happened at
COPS sixteen, she felt this urge to make sure that
that kind of failure doesn't happen again, and she partly
succeeded at COP twenty nine. But you know, we'll see
(16:21):
what happens at the resumed COP and whether whether in
Rome they come up with the items that haven't been agreed.
So let's take the big one, which is where develop
country said no, no, no, What was that and how
do you resolve that?
Speaker 2 (16:36):
Yeah, So the crux of the issue in Cali was
around the creation of a new fund. So as part
of the resource mobilization strategy or the way to kind
of collect developed country contributions, a fund was set up
called the Global BIY Diversity Framework Fund, which is housed
at the Global Environment Facility, which is based in Washington, DC.
(16:59):
It was a fit launched last summer August twenty twenty three,
and developing countries basically see it as controlled by developed
nations and they want a new fund that's overseen by
the COP so the Conference of Parties so much broader
representation instead, and developed countries on the other hand say
(17:24):
that we've already got the GBFF, let's just focus on
making it better. A new fund doesn't mean more money,
and they disagree basically. So there was a bit of
a curveball in the sense that on Friday morning, so
the day that the event was meant to wrap up,
this fund wasn't really on the table. It was going
to be discussed at a later date. Then I believe
(17:45):
it was in the early hours of Saturday morning a
new text got tabled and the fund was back in there.
So the countries didn't really have time to go through
the text, and the developing countries very much welcomed it
when they go to that agenda item, but when it
turned over to the developed nations one after the other, Candada, Japan,
(18:05):
the EU and others just said no, no, no, And
I mean an important point to highlight is that when
the GBFF was formed, it was formed as a temporary
stop gap solution to twenty thirty so from twenty thirty
there is a question mark over where this money is
going to be collected, and what was proposed in the
(18:26):
text was the last version of the text was that
from twenty thirty a new fund overseen by the Copper
set up. So I think it does speak a bit
to the distrusts that was in the room, like the
developing nations, I think were proposing a pragmatic solution that
worked a little bit better from them in terms of representation,
(18:48):
and it was just outright denied.
Speaker 1 (18:50):
What do you think private markets can do to try
and address this crisis and how does it fit in
with their business model which is very clearly towards making money.
Speaker 2 (19:00):
Well, I think the way in which it's broken down
and the numbers and the text is quite a useful
way of thinking about it. Five hundred billion needs to
come from redirecting harmful subsidies, so you can think about
that more broadly as limiting or impact on the plan
and finding business models that are more well sustainable. The
flip side of that is about how to raise this
additional two hundred billion, and that's of course where private
(19:22):
finances is focusing its attention. These are opportunities to make
money out of the problem, and there there was these
cops are not really the forum for that, but of
course there's plenty of side events where the private sector
can participate. And there were two products, as it were,
that were really prominent, I would say in CALLI. One
(19:44):
is biodiversity credits, so the kind of equivalent to a
carbon credit, where carbon credits are about offsetting your emissions.
There's a big debate in the bidiversity space about whether
the buidiversity credits are about offsetting your impacts on nature
or whether they're about making a positive contribution to projects
that help protect it. But nonetheless these a tradeable instruments
(20:06):
that are very controversial and was a big, big part
of the proceedings there, to the extent that rooms were overflowing.
I think every single day there was a side event
on bio diversity credits. A number of kind of guidance
principles were launched to try to make sure the market
doesn't fall down the same shortcomings as the carbon markets.
At the same time, businesses were putching their ways of
(20:27):
measuring and trading nature. And the other one was debt
for nature swaps, which are deals where countries can refinance
their sovereign debts on better terms and allocate the savings
to conservation projects. So this has been a model really
spearheaded by the Nature Conservancy US nonprofit and Credit Sweese.
(20:47):
But is now you know, witnessing a lot of competition
from big global banks that ultimately can make a lot
of money out of the fees that they get from
structuring these extremely complex and bespoke deals. And some are
also offering loans now and you know obviously making money
out of the interest on those. So those are kind
of the two products I would say that are really
(21:09):
in the eyes of wool Street when it comes to
this issue, and.
Speaker 1 (21:13):
They're both new instruments. You and I have covered carbon
credits for a while now and to the extent where
I actually am still very tired of covering them, but
there is no way around covering them. Biodiversity credits, which
you've covered also for some time. What are the pitfalls
that are different from carbon?
Speaker 2 (21:33):
Right?
Speaker 1 (21:33):
In carbon the pitfall is you're supposed to actually offset
for a ton of carbon and you want to ideally
have it one to one. So if you're extracting fossil
fuel from the ground, then you want to have that
carbon go back into the ground, and typically that doesn't
happen in biodiversity. How do you exactly do that? If
you kill a bird that is extinct, now you can't
(21:54):
offset that by bringing that bird back to life, right.
Speaker 2 (21:58):
Yeah, So this offsetting credits debate is very contentious and
people feel strongly, as they do in the carbon space,
about both sides of the argument. So on the one hand,
if you think about it, we are going to continue
destroying nature in the future. We build homes, we build infrastructure,
we build minds to fuel the energy transition, and that
(22:21):
destroys tracks of land and everything that lives on it.
So there's a group of people that think that offsetting
is fundamentally critical. You have to compensate for your impact,
otherwise we're just going to have a downward spiral of loss. Obviously,
there's a number of guardrails that can be put in place,
and the people who back that generally I think promote,
(22:43):
which is that it should be a regulated market with
proper oversight. The offsetting should be done as local as
possible and in as equivalent ecosystems as possible. So if
you impact to wetland in Norfolk, you rebuild a Wetland
and Norfolk. I think people who think about this seriously,
you don't really agree that a rainforest in Brazil can
(23:03):
be offset with savannah in Kenya. The other side is
that biodiversity offsetting is fundamentally flawed and given the complexities
of nature and the challenges with measuring it, and the
fact that there are no single units that there are
for carbon, there's no one ton of carbon dirk side
or greenhouse cash equivalent emissions, that there is a nature
(23:25):
that this is never going to work. So that's the
offsetting debate, and then so out of that really has
emerged the credits. They sit in what's called the mitigation
hierarchy at the very end. So you know, you impact nature,
you minimize your impact on nature, or you avoll your
impact on nature, You minimize it, you restore it, you
(23:45):
offset it, and then you invest in a bid diversity
credit and you are nature positive, obviously ignoring the fact
that you have to offset your nature to get to
the zero to become positive. So it's a very kind
of theoretical debate that once you then look at the
by side and the people who actually are going to
be spending money on these instruments, whether there'll be any
demand for credits rather than offsets, and what happened to
(24:06):
the offsetting component. If these are any credits, and it
starts to kind of I think, fall apart. But there's
also an international market for these emerging companies are beginning
to trade them globally, so you will get a company
with you know, supply chains in one area of the
world or in one country, investing you know, in credits elsewhere. Obviously,
(24:26):
I think the goal is to keep it as local
as possible, but that's not how the market itself is
being set up. And I think, as we've seen over
and over again, once you create a market, it takes
on a life of its own, and if it's outside
of regulated frameworks, then anything goes basically, and that's what
we've seen in the carbon market, and I think that's
the big risk for the biodiversity credits market, which is
(24:48):
why there was such a focus on it in Cali.
Speaker 1 (24:50):
And can you give me an example of what a
biodiversity credit looks like, because some are clearly selling already.
Speaker 2 (24:56):
So England last year brought into force what's called Biodiversity
net game, which is an offsetting mechanism. Infrastructure developers and
home builders are required to compensate and find ten percent
on top, so one hundred and ten percent compensates for
their impacts. And that means there's a number of developers
across the country now that are taking over degraded land
(25:19):
and restoring it and creating the difference between the starting
point and the restored point. They pay packages a credit
and they sell it as an offset. So I went
to visit. I went to visit last year a small
field called Puddington Moor in Devon in the southwest of England,
which was a field of pumpkins, I think or swedes.
(25:40):
It was a swede field, so it had been run
by a farmer that was supplying supermarkets. It had been
just pummeled with fertilizer and over farmed really for decades.
And so this young couple bought it. They took out
a mortgage to buy it. They are going to restore
it to the indigenous what's called calm grassland. The difference
there between the starting point so the endpoint, is what
(26:00):
creates the bio diversity credits which are sold to companies
that operate within that area and need to compensate for
their impacts. Another example which is going to be pitched
as a credit instead of an offset. I went to
visit an estate in Yorkshire where again they've got a
segment of land that's been destroyed by years of intensive
(26:22):
agriculture and they're going to restore it to what's mostly
wetlands in that area. And they're marketing those credits to
companies globally. So anyone who has an interest in nature,
or perhaps as a part of their supply chain in
the UK, or for some other reason, wants to invest
in these credits, they can buy these credits and claim
to have made a nature positive investment.
Speaker 1 (26:50):
After the break, what we can expect when COP sixteen
resumes in Rome next week. And if you've been enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. It helps other
listeners find the show. As with all our reporting, Natasha,
(27:13):
this seems to be a pretty messy place to be
and perhaps that's why our reporting is valuable. But coming
back to COP despite the sense that it is not
the place that solves all problems, it does create the
space for solutions. What is going to happen in Rome,
and then what happens in COPS seventeen, which is supposed
to be in Armenia next year.
Speaker 2 (27:33):
Yeah, So in Rome they're going to address the agenda
items that were left unresolved. The big one there is
the resource mobilization strategy, but they're also going to be
discussing ways to monitor progress because at the moment that's
not actually very clear about how they can monitor and
report on progress against the Global bid Diversity Framework targets.
So on the resource mobilization point, I think the fund
(27:57):
is still very much on the table. So that would
be three days of intense negotiations around that item which
led to the collapse of CALI. So yeah, we'll see that,
and then looking forward to COP seventeen in Armenia, the
focus there is again going to be a review of
progress towards the implementation of the Global bio Diversity Framework.
Speaker 1 (28:20):
Because all these countries that were supposed to bring a
plan for biodiversity not and maybe they will between now
in COPS seventeen.
Speaker 2 (28:27):
I think the expectation is that more countries will come
out with more national bi diversity action plans and that
there'll be more specific and developed there's also targets within
those and what will hopefully be agreed in Rome is
a way to monitor progress and that will all be
taken together in Armenia next year to assess progress.
Speaker 1 (28:48):
More broadly, this was fun, Natasha, Natasha, There's a lot
of other coverage, so you should check out her stories,
which will link in the show notes. Thanks, thank you,
(29:09):
thank you for listening to Zero. And now for the
sound of the week. That's the sound of Indigenous musicians
back at the opening of cop sixteen in Kelly. If
(29:29):
you like this episode, please take a moment to rate
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(29:53):
I am a Stuart back up
Welcome to Zero. I am Akshatrati today the forgotten crisis.
Here on zero. We've dedicated a lot of time at
(00:21):
covering COP twenty nine at the end of last year
in Baku. We interviewed the heads of state, the CEO
of Exonmobil, and even the COP thirty president, who by
that time hadn't been named as such. But there was
another COP last year, COP sixteen, that focused on biodiversity
in Cali, Colombia, where nations came together to try to
(00:42):
figure out how to protect natural habitats, plant, animal species
and halt the destruction of nature. If the climate crisis
is a monster wave, the biodiversity crisis could be a
Leviathan And unlike COP twenty nine, actually COP sixteen is
still not over. It ended before key agreements could be reached,
(01:04):
and so talks are going to resume next week in Rome.
I wasn't at COP sixteen, but my colleague Natasha White
was high.
Speaker 2 (01:12):
Actually I was, indeed, and thanks for having me Today.
Speaker 1 (01:15):
We're going to talk a lot more about why these
talks dragged on and what will happen in Rome. But
Natasha tell me first, how was Cali CALLI.
Speaker 2 (01:24):
So it's the capital of sugar cane in Columbia. It's
sort of nestled between mountains and the sea, and it's
also known to be the capital of salsa salsa dance,
not the salsa sauce, and it's a really vibrant town.
And this came through, i think to a great extent
in the way that Columbia hosted the COP. It was
really framed as the People's cop and the Green Zone.
(01:48):
So the area at these cops you have a blue
zone where all the official proceedings take place and you
need to have official access and it's much more managed.
But then you also have a green zone where anyone
can exhibit and the general public can visit. And in Cali,
the green zone and the blue zone were apart, so
the green zone was downtown. It was kind of in
the center of the city. It had a sort of
(02:09):
festival street festival vibe. It was open from the morning
to late at night, and there were live music events.
There was salsa. Unfortunately I didn't make any of it.
Well that's probably no bad thing. I can't dance, but
it was a really vibrant, warm place to host it,
and the cop itself was kind of nestled out of
town in the foothills of some hills, so you had
(02:31):
beautiful mountain backdrop to the conference venue and yeah, beautiful
nature all around.
Speaker 1 (02:38):
Well, you clearly got the better assignment here at Bloomberg
because you also came to Baku and that place had
no natural daylight, let alone all the beautiful mountains.
Speaker 2 (02:48):
Yeah, it's true. In Baku, we kind of walked into
a tent in a stadium. There was no natural light,
there was no fresh air, there was nowhere to stand
outside and get some daylight. In Cali, the tents were
all separated, it was hot, you know, there was water features.
It was just a much more kind of humane setting
for a COP. There was an explicit choice, I think,
to host the COP in this city because of its nature,
(03:10):
and you really feel it surrounds you. You know. We
went out for dinner one night in the old town
and we were sort of taken over by a cacophony
of frogs while we were eating.
Speaker 1 (03:26):
Well that's loud. I mean frogs I like, but I
don't like the croaking. This sounds actually quite pleasant. Well,
it seems like you had way more fun than we
did at COP twenty nine. But biodiversity cops in general
now have started to become bigger and are being given
perhaps not as much importance as climate cops, but increasing importance.
(03:47):
And what happened at COP fifteen in Montreal perhaps made
that happen because it was this big moment where one
nineteen nations reached an agreement to preserve thirty percent of
the planet's land and seas. Having that big goal set
was important. But really just to understand what is at
stake with biodiversity.
Speaker 2 (04:08):
Well, I think if you start with the numbers, WWF
does analysis which has shown that over the past five decades,
over the past fifty years, the diversity of species has
declined by I think around seventy five percent, which is massive.
So that's the numbers. I think everybody everybody feels it,
(04:29):
Like you know, in this country in the UK where
we're both based, people commonly talk about the number of
insects on their wind screens when they drive around in
the summer. And even I am in my mid thirties,
like when I was younger, I grew up in the countryside,
it was something I remember regularly not being able to
wash the windscreen well enough to see where you're going
and now it's just not the case. You know, over
the over the summer, we had the windows open and
(04:50):
the lights on and normally there'd be insects buzzing around them,
but there are none. So everybody recognizes this drastic loss
in biodiversity, and this country, the UK, is one of
the worst, but it's affecting every country in the world
and that's what this Global bio Diversity Framework that was
agreed in Montreal in twenty twenty two seeks to address.
And so the kind of overarching goal of that, which
(05:12):
is for twenty fifty, is for the world to be
living in harmony with nature. But underneath these broad goals
there's a number of i think around twenty three targets
which are a lot more specific. One of them is
the protect thirty percent of land and sea, well land
and water actually by twenty thirty. And so countries gathered
in cop this year to look at the progress that
(05:33):
they've made since that framework.
Speaker 1 (05:35):
Was agrees and even at this cop in biodiversity finance
was at the heart of the conversation. But what was
the approach to try and raise money towards what clearly
is a very important issue. Not just from a perspective
of how humans should live on the planet, but also
from the perspective of how do we sustain an economy
(05:56):
where humans thrive because nature is so important to enable
that to happen.
Speaker 2 (06:01):
Yeah, So on the money, there's a seven hundred billion
dollar per year financing gap that's been identified for tackling
this problem, and that's kind of split into two buckets. One,
which covers around five hundred billion, is about redirecting harmful subsidies,
so the money that governments pay to make cheaper things
(06:22):
that destroy nature, so fossil fuel production, chemical agriculture, things
like this, and the goal there is to redirect those
subsidies from doing harm to things that do good, so
regenerative agriculture or what's spink called the bioeconomy, basically business
that doesn't harm the planet. And then the other is
(06:43):
the remaining two hundred billion is what needs to be
raised in kind of new money from all sources, public
and privates. And that's where we see a lot of
the kind of parallels in the climate space, I think,
where it's about getting more grant money from governments, more
concessional finance governments, and multi natural development banks and more
private sectimoney invested in again things that aren't harming nature
(07:07):
but instead are sensitive to it.
Speaker 1 (07:10):
In the climate sphere, I think there is now a
certain sense that has settled, and I'm not saying it's
widely accepted and always consistent, but the fact that cleaner
energy is cheaper than fossil fuels, that investing in clean
energy is actually going to not just have an impact
on carbon, but so many other things that all cannar
(07:33):
that you know, the only way progress or economic progress
could happen is through extraction, through perhaps some amount of
harm to the environment. Has been in some ways being
broken in the climate sphere. Do you think that's been
broken in the biodiversity sphere. Do you think people understand
that it is actually possible to have economic activity that
(07:56):
does not harm nature.
Speaker 2 (07:58):
Well, I think the challenge of bio diversity and sort
of nature loss more broadly, as it's extremely cross cutting
right in some areas. I would say it's even more
fundamental in the bi diversity space. If you look at agriculture,
I think agriculture companies are not going to make any
money unless they change a business model. So in that
space it makes perfect business sense to manage the land
(08:23):
in a way that nurtures nature so that nature can
go back, you know, in terms of production. In other areas,
it's more challenging, I think, because the business model that
we're we're used to is externalizing the negativities. You know,
we dun't waste, we don't really recycle it or limit
its production. And it's those business models where it's cheapest
(08:44):
to behave in that way are the ones that really
need to fundamentally change. And that's structural and it's hard,
and it's not just about moving subsidies but overhauling an
entire way of functioning, which is a big challenge.
Speaker 1 (08:57):
And so at this COP sixteen, what were the headline
things on the agenda? And we know from headlines from
stories you've written that largely it ended in failure. But
let's just first go through what were things on the
agenda and understand why it was classed as a failure.
Speaker 2 (09:20):
What was on the agenda at the outset, which we
identified as the most important one, was a stock take.
So countries have to submit national biodiversity plans for how
they are going to achieve the targets and the goals.
As a global Biodiversity Framework and the deadline for doing
so was the beginning of cop so by that measure,
(09:43):
very few countries managed to submit their nb SAPs on time.
Some gave reasons for that, which was that they really
want to engage, for example, indigenous peoples and local communities
and defining these kind of cross cutting strategies. That takes
time and it's not easy. But nonetheless they've had two
years to do it and a lot of them most
(10:06):
of them failed, So by that measure, it wasn't a
great success. The second big agenda item was a strategy,
a resource mobilization strategy, so a way to raise this
two hundred billion dollars per year from public and private
sources to tackle nature loss. The third main agenda item
(10:29):
was finding a way to collect and share the profits
from companies that benefit from what's called digital sequence information
on genetic resources. And it's extremely technical, but in essence,
what it's about is pharmaceutical companies, cosmetics companies, biotech companies,
(10:51):
all of them make money out of products that are
based on nature's genetics and that used to be a
physical process. But in the day and age that we
live in today, obviously a lot of that has become digitized. Yeah,
so it's difficult for the countries that are home to
(11:12):
this diversity to benefit from it. So, for example, the
venom of a lizard found in Mexico and the US
inspired the blockbuster drug ozenpic for weight loss and diabetes. Well,
Mexico may well not have been remunerated for the benefits
that companies have accumulated thanks to it its biological genetic diversity.
(11:36):
So the idea of this mechanism is to find a
way to collect a portion of the profits or of
the revenue of these big pharmaceutical biotech companies and share
them with the countries from which these resources come. It's
not a kind of direct trade, but the idea is
there'll be a kind of levy of one percent of
(11:57):
profits or zero point one percent of revenue that will
go into a fund, and then that fund will distribute
money to countries that are rich in biodiversity to help
protect biodiversity. And those were the kinds of details actually
that were ironed out during the cops and throughout the
two weeks negotiators worked on this text, which one of
(12:18):
you know, a veteran negotiator, described to me as the
most complex item he's ever negotiated in his life. He
kind of likened it to quantum physics, and you can
imagine when you're talking about a voluntary mechanism to levy
certain sectors globally through a United Nations mechanism to sort
of centralize money and distribute it. There's a number of
(12:39):
questions there that are extremely difficult to iron out, and
some were ironed out and some weren't. But that was
a big focus of an event.
Speaker 1 (12:46):
So usually these COP meetings come toward and end with
all these countries negotiating and ideally coming to a consensus
that signs off on some of the headline items in
an agenda that happened at COP twenty nine with the
three hundred billion dollar climate finance goal and the attempt
to try and get the carbon markets through Article six
to be working where countries could trade corbon credits. How
(13:10):
did COP sixteen end.
Speaker 2 (13:12):
Well, it ended over a couple of days, which I
think is the first point. We were reassured in the
run up that it's very unusual to go over time,
and it ran over time and ended somewhat abruptly after
a big success of signing off on a document explaining
the ways to kind of operationalize this digital sequence information
(13:33):
fund called the Cali Fund. That was a big success,
and you had a kind of sentiment that, you know,
momentum was good and things were going well. And then
they came to the resource mobilization strategy, and after some
welcoming comments from developing countries, developed nations stood up one
after the other and just said no, no, no, no,
(13:56):
at which point I think Brazil intervened to ask if
there were still because we were in an early hours
of Saturday at that point, and some people had started
to leave to get their flights, So are there enough
people in the room to make a decision. There weren't,
and so the event ended abruptly and has been suspended
and will be resumed next month in Rome, where they
(14:17):
will iron out or try to iron out over two
or three days, which seems rather short given the contentions
the outstanding agenda items.
Speaker 1 (14:25):
So this is unusual and rare, but it's not unprecedented.
COP meetings of this kind, not just in nature or climate,
but also in other types of big un bodies tend
to have this option of suspending the COP and then
restarting it in another place. Was there Seene that you
(14:47):
remember that sort of like captured how it feels because
obviously they spent two weeks that all these people from
different countries, they really want an outcome and then they
don't have it.
Speaker 2 (14:59):
I think there are a few moments. One was the
kind of emotive intervention from the Philippines talking about the
urgency of what's being discussed when they were kind of
the countries were arguing over some details of texts. You know,
he mentioned that they've lost already recently a couple of
species of birds to typhoons, which again speaks to the
(15:20):
interconnectivity of climate change and nature lost issues, So that
there was that emotive intervention. And then shortly after an
Australian negotiator had their heads in their arms and Suzanna Mohammad,
the cop president, asked in plenary Australia, are you still awake?
And then you had a standing ovation when they signed
off the digital sequence information on genetic resources text and
(15:41):
then suddenly this total collapse and again the moment that
stuck in my mind. After the kind of show of
the whole event in Calle, you know, there was a
big opening ceremony, there was real kind of energy throughout
the event, the president just walked off the stage and
it ended. There was no closing speech, nothing, It just
collapsed and mohammed.
Speaker 1 (16:01):
The Environment Minister of Columbia was the president of COP sixteen. Well,
she was also quite active at COP twenty nine, and
it felt to me that having seen what happened at
COPS sixteen, she felt this urge to make sure that
that kind of failure doesn't happen again, and she partly
succeeded at COP twenty nine. But you know, we'll see
(16:21):
what happens at the resumed COP and whether whether in
Rome they come up with the items that haven't been agreed.
So let's take the big one, which is where develop
country said no, no, no, What was that and how
do you resolve that?
Speaker 2 (16:36):
Yeah, So the crux of the issue in Cali was
around the creation of a new fund. So as part
of the resource mobilization strategy or the way to kind
of collect developed country contributions, a fund was set up
called the Global BIY Diversity Framework Fund, which is housed
at the Global Environment Facility, which is based in Washington, DC.
(16:59):
It was a fit launched last summer August twenty twenty three,
and developing countries basically see it as controlled by developed
nations and they want a new fund that's overseen by
the COP so the Conference of Parties so much broader
representation instead, and developed countries on the other hand say
(17:24):
that we've already got the GBFF, let's just focus on
making it better. A new fund doesn't mean more money,
and they disagree basically. So there was a bit of
a curveball in the sense that on Friday morning, so
the day that the event was meant to wrap up,
this fund wasn't really on the table. It was going
to be discussed at a later date. Then I believe
(17:45):
it was in the early hours of Saturday morning a
new text got tabled and the fund was back in there.
So the countries didn't really have time to go through
the text, and the developing countries very much welcomed it
when they go to that agenda item, but when it
turned over to the developed nations one after the other, Candada, Japan,
(18:05):
the EU and others just said no, no, no, And
I mean an important point to highlight is that when
the GBFF was formed, it was formed as a temporary
stop gap solution to twenty thirty so from twenty thirty
there is a question mark over where this money is
going to be collected, and what was proposed in the
(18:26):
text was the last version of the text was that
from twenty thirty a new fund overseen by the Copper
set up. So I think it does speak a bit
to the distrusts that was in the room, like the
developing nations, I think were proposing a pragmatic solution that
worked a little bit better from them in terms of representation,
(18:48):
and it was just outright denied.
Speaker 1 (18:50):
What do you think private markets can do to try
and address this crisis and how does it fit in
with their business model which is very clearly towards making money.
Speaker 2 (19:00):
Well, I think the way in which it's broken down
and the numbers and the text is quite a useful
way of thinking about it. Five hundred billion needs to
come from redirecting harmful subsidies, so you can think about
that more broadly as limiting or impact on the plan
and finding business models that are more well sustainable. The
flip side of that is about how to raise this
additional two hundred billion, and that's of course where private
(19:22):
finances is focusing its attention. These are opportunities to make
money out of the problem, and there there was these
cops are not really the forum for that, but of
course there's plenty of side events where the private sector
can participate. And there were two products, as it were,
that were really prominent, I would say in CALLI. One
(19:44):
is biodiversity credits, so the kind of equivalent to a
carbon credit, where carbon credits are about offsetting your emissions.
There's a big debate in the bidiversity space about whether
the buidiversity credits are about offsetting your impacts on nature
or whether they're about making a positive contribution to projects
that help protect it. But nonetheless these a tradeable instruments
(20:06):
that are very controversial and was a big, big part
of the proceedings there, to the extent that rooms were overflowing.
I think every single day there was a side event
on bio diversity credits. A number of kind of guidance
principles were launched to try to make sure the market
doesn't fall down the same shortcomings as the carbon markets.
At the same time, businesses were putching their ways of
(20:27):
measuring and trading nature. And the other one was debt
for nature swaps, which are deals where countries can refinance
their sovereign debts on better terms and allocate the savings
to conservation projects. So this has been a model really
spearheaded by the Nature Conservancy US nonprofit and Credit Sweese.
(20:47):
But is now you know, witnessing a lot of competition
from big global banks that ultimately can make a lot
of money out of the fees that they get from
structuring these extremely complex and bespoke deals. And some are
also offering loans now and you know obviously making money
out of the interest on those. So those are kind
of the two products I would say that are really
(21:09):
in the eyes of wool Street when it comes to
this issue, and.
Speaker 1 (21:13):
They're both new instruments. You and I have covered carbon
credits for a while now and to the extent where
I actually am still very tired of covering them, but
there is no way around covering them. Biodiversity credits, which
you've covered also for some time. What are the pitfalls
that are different from carbon?
Speaker 2 (21:33):
Right?
Speaker 1 (21:33):
In carbon the pitfall is you're supposed to actually offset
for a ton of carbon and you want to ideally
have it one to one. So if you're extracting fossil
fuel from the ground, then you want to have that
carbon go back into the ground, and typically that doesn't
happen in biodiversity. How do you exactly do that? If
you kill a bird that is extinct, now you can't
(21:54):
offset that by bringing that bird back to life, right.
Speaker 2 (21:58):
Yeah, So this offsetting credits debate is very contentious and
people feel strongly, as they do in the carbon space,
about both sides of the argument. So on the one hand,
if you think about it, we are going to continue
destroying nature in the future. We build homes, we build infrastructure,
we build minds to fuel the energy transition, and that
(22:21):
destroys tracks of land and everything that lives on it.
So there's a group of people that think that offsetting
is fundamentally critical. You have to compensate for your impact,
otherwise we're just going to have a downward spiral of loss. Obviously,
there's a number of guardrails that can be put in place,
and the people who back that generally I think promote,
(22:43):
which is that it should be a regulated market with
proper oversight. The offsetting should be done as local as
possible and in as equivalent ecosystems as possible. So if
you impact to wetland in Norfolk, you rebuild a Wetland
and Norfolk. I think people who think about this seriously,
you don't really agree that a rainforest in Brazil can
(23:03):
be offset with savannah in Kenya. The other side is
that biodiversity offsetting is fundamentally flawed and given the complexities
of nature and the challenges with measuring it, and the
fact that there are no single units that there are
for carbon, there's no one ton of carbon dirk side
or greenhouse cash equivalent emissions, that there is a nature
(23:25):
that this is never going to work. So that's the
offsetting debate, and then so out of that really has
emerged the credits. They sit in what's called the mitigation
hierarchy at the very end. So you know, you impact nature,
you minimize your impact on nature, or you avoll your
impact on nature, You minimize it, you restore it, you
(23:45):
offset it, and then you invest in a bid diversity
credit and you are nature positive, obviously ignoring the fact
that you have to offset your nature to get to
the zero to become positive. So it's a very kind
of theoretical debate that once you then look at the
by side and the people who actually are going to
be spending money on these instruments, whether there'll be any
demand for credits rather than offsets, and what happened to
(24:06):
the offsetting component. If these are any credits, and it
starts to kind of I think, fall apart. But there's
also an international market for these emerging companies are beginning
to trade them globally, so you will get a company
with you know, supply chains in one area of the
world or in one country, investing you know, in credits elsewhere. Obviously,
(24:26):
I think the goal is to keep it as local
as possible, but that's not how the market itself is
being set up. And I think, as we've seen over
and over again, once you create a market, it takes
on a life of its own, and if it's outside
of regulated frameworks, then anything goes basically, and that's what
we've seen in the carbon market, and I think that's
the big risk for the biodiversity credits market, which is
(24:48):
why there was such a focus on it in Cali.
Speaker 1 (24:50):
And can you give me an example of what a
biodiversity credit looks like, because some are clearly selling already.
Speaker 2 (24:56):
So England last year brought into force what's called Biodiversity
net game, which is an offsetting mechanism. Infrastructure developers and
home builders are required to compensate and find ten percent
on top, so one hundred and ten percent compensates for
their impacts. And that means there's a number of developers
across the country now that are taking over degraded land
(25:19):
and restoring it and creating the difference between the starting
point and the restored point. They pay packages a credit
and they sell it as an offset. So I went
to visit. I went to visit last year a small
field called Puddington Moor in Devon in the southwest of England,
which was a field of pumpkins, I think or swedes.
(25:40):
It was a swede field, so it had been run
by a farmer that was supplying supermarkets. It had been
just pummeled with fertilizer and over farmed really for decades.
And so this young couple bought it. They took out
a mortgage to buy it. They are going to restore
it to the indigenous what's called calm grassland. The difference
there between the starting point so the endpoint, is what
(26:00):
creates the bio diversity credits which are sold to companies
that operate within that area and need to compensate for
their impacts. Another example which is going to be pitched
as a credit instead of an offset. I went to
visit an estate in Yorkshire where again they've got a
segment of land that's been destroyed by years of intensive
(26:22):
agriculture and they're going to restore it to what's mostly
wetlands in that area. And they're marketing those credits to
companies globally. So anyone who has an interest in nature,
or perhaps as a part of their supply chain in
the UK, or for some other reason, wants to invest
in these credits, they can buy these credits and claim
to have made a nature positive investment.
Speaker 1 (26:50):
After the break, what we can expect when COP sixteen
resumes in Rome next week. And if you've been enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. It helps other
listeners find the show. As with all our reporting, Natasha,
(27:13):
this seems to be a pretty messy place to be
and perhaps that's why our reporting is valuable. But coming
back to COP despite the sense that it is not
the place that solves all problems, it does create the
space for solutions. What is going to happen in Rome,
and then what happens in COPS seventeen, which is supposed
to be in Armenia next year.
Speaker 2 (27:33):
Yeah, So in Rome they're going to address the agenda
items that were left unresolved. The big one there is
the resource mobilization strategy, but they're also going to be
discussing ways to monitor progress because at the moment that's
not actually very clear about how they can monitor and
report on progress against the Global bid Diversity Framework targets.
So on the resource mobilization point, I think the fund
(27:57):
is still very much on the table. So that would
be three days of intense negotiations around that item which
led to the collapse of CALI. So yeah, we'll see that,
and then looking forward to COP seventeen in Armenia, the
focus there is again going to be a review of
progress towards the implementation of the Global bio Diversity Framework.
Speaker 1 (28:20):
Because all these countries that were supposed to bring a
plan for biodiversity not and maybe they will between now
in COPS seventeen.
Speaker 2 (28:27):
I think the expectation is that more countries will come
out with more national bi diversity action plans and that
there'll be more specific and developed there's also targets within
those and what will hopefully be agreed in Rome is
a way to monitor progress and that will all be
taken together in Armenia next year to assess progress.
Speaker 1 (28:48):
More broadly, this was fun, Natasha, Natasha, There's a lot
of other coverage, so you should check out her stories,
which will link in the show notes. Thanks, thank you,
(29:09):
thank you for listening to Zero. And now for the
sound of the week. That's the sound of Indigenous musicians
back at the opening of cop sixteen in Kelly. If
(29:29):
you like this episode, please take a moment to rate
and reveal the show on Apple Podcasts and Spotify. Share
this episode with a friend or with someone who is
going to roam for work. You can get in touch
at zero port at bloomberg dot net. Zero's producer is
Mike Lera. Bloomberg's head of podcast is Stage Boum and
head of Talk is Brendan Yunan. A. Theme music is
composed by Wonderly Special thanks to Shan Chan and jessicab
(29:53):
I am a Stuart back up
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