COP15: Does biodiversity need more nature or nurture?

Nature is more complicated than climate. And more complex.

That dichotomy between nature and climate was one of the central tensions of the United Nations biodiversity conference, which wrapped up Monday in Montreal.

The conference strengthened the Convention on Biological Diversity, which the UN oversees, particularly with new funding. But biodiversity still faces plenty of challenges—the thorniest being the intersection with climate change.

Can we afford to focus on biodiversity while also racing to cut greenhouse gas emissions? Or can we afford not to? Nature is a cost, but it’s also critical to helping reduce greenhouse gas emissions and protecting communities against the effects of climate change.

Here’s what I took away from the Conference of the Parties, known as COP15:

1. Timing is everything

The biodiversity conference came on the heels of the UN climate change conference in Egypt in November, which was widely seen as a disappointment. (Bloomberg gave it a 3.7 out of 10.) The struggles of that other conference—COP27—had left a bitter taste in the mouths of developing countries, which feel they’re on the losing end of international negotiations. They’re paying the heaviest price for climate change, and have the fewest resources to fight it.

That grievance was carried to Montreal by African countries and small island states that argue they should be compensated for their work to protect biodiversity, which the world benefits from. But their viewpoint didn’t get too far, meaning future efforts to bridge climate and biodiversity will continue to be challenged by money.

2. Nature can be an asset class

The biggest need for biodiversity—and the fight to stop the rapid loss of species and habitats—may be capital. An estimated US$700 billion is needed to restore nature, and most of it will need to come from private capital. That’s because government budgets are close to maxed out, and philanthropy is hitting a ceiling.

To leverage investment capital, new business models will need to be applied to nature, including forests, lands and water. And that means some of nature may need to be treated like an investment, with clearer legal and market structures, just like any other asset class.

3. Nature needs a price

If nature is to be treated like an asset, it may need to be priced accordingly. There’s an economic model already at work fighting climate change. Carbon pricing has unlocked large pools of capital for climate change mitigation and innovation. Pricing models help individuals and businesses make more rational choices with natural goods, and punish abusers of those goods. In many markets, pricing models are helping to tip the economic balance in favour of sustainable aviation fuel, electric vehicles and hydrogen.

The same sort of economic thinking is needed for biodiversity, by effectively placing a monetary value on the use of “free” nature assets and then using the proceeds to protect them. Such an economic model could reward local and Indigenous communities, and private land operators like farmers, for being stewards of nature.

4. Local governments need more power

Climate is global. Nature is local. And that means more power to support biodiversity needs to be held at the local level. Municipalities, regional authorities and Indigenous communities are often the best stewards of biodiversity, and the best managers of financial and natural capital.

But in many jurisdictions, communities and local governments don’t have the legal authority to raise capital to invest in biodiversity. Simple policy changes (although not so simple politically) can help connect local communities with global capital.

5. Nature strategies don’t need to be perfect

The financing of nature is a nascent field and carries a high margin of error as custodians, governments, investors and others test and explore new models. In Europe, beer companies are paying barley farmers to practice sustainable agriculture, to both capture carbon in their soil and enhance biodiversity.

That, in turn, helps with the production of Net Zero beer. But measuring biodiversity is tougher than measuring climate. So, too, is ensuring carbon isn’t released back into the atmosphere by disruptive practices. We’ll need to accept some margin of error, as we test and learn. Waiting for perfection won’t get us there.

6. There’s a growing moral hazard

Delegates from a range of developing countries were unhappy they’ve protected their natural environments while others have ravaged theirs and then been paid to repair the damage. It’s like the parable of the prodigal son—the wasteful child who’s rewarded by loving parents while a dutiful sibling must settle for the satisfaction of fidelity and hard work.

That’s not going to do it for countries, and communities, that feel they provide a service to the world by protecting forests, lands and waters. Even though there’s no evident pricing model to make that work, new tools like debt-for-nature swaps—writing off the debts of nature stewards, for instance—are gaining traction, in recognition of the work many countries have done for free to help global biodiversity.

7. The practitioners need to be heard

The Montreal COP made a great effort to include and profile Indigenous voices. Even then, they remained on the margins. Even less visible were farmers, fishers and other stewards of biodiversity. Local practitioners are the ones who best understand the complexities of biodiversity—and often have the best ways to make solutions work. Future biodiversity summits might be wise to include more of their voices.