EQX Biome: Biodiversity Conservation as an Investment (ARD Tagesschau)

Rainforest in the Congo // Biodiversity Conservation as an Investment

Translated to English from the Original?German Version (link at the end) // Copyright ARD Tagesschau // Norbert Hahn

Dated: March 15, 2023 06:35 am // Author: Norbert Hahn, ARD Studio Nairobi

Only Brazil lost more rainforest last year than the Democratic Republic of Congo. Large oil and gas projects threaten biodiversity. An investment fund is now taking a stand against this and hopes for imitators.

It sounds like a [nightmare] - and perhaps it will remain so: 27 blocks for the exploration of oil deposits and three for the search for natural gas were put up for auction by the government of the Democratic Government of Congo last year. In the capital Kinshasa, huge profits are expected from the extraction, while environmentalists warn of devastating consequences for flora, fauna and thus also for the global climate.

Matthias Pitkowitz, an investment banker with Austrian roots, wants to stop the corporations and enlist "Wall Street in the fight for nature". More precisely: for the protection of species. The end result - if Pitkowitz has his way - should be "the world's largest nature conservation project," with "70 million hectares of forest - roughly equivalent to the area of France," he explains.

Pioneering with sustainable financial instruments

This sounds like green ‘gigantomania’, which leaves room for doubt. However, Pitkowitz has a resume that makes you think he knows what he's doing: entrepreneur, investment banker, and, by his own account, responsible for multibillion-dollar transactions for renowned giants of the capital world - and "pioneer for sustainable financial instruments in the USA."

His plan is for the government of the Democratic Republic of Congo not to sell drilling rights to oil multinationals, but to leave the exploration regions to his fund as protected areas. The fund would then invest $400 million directly to secure the areas.

Biodiversity credits, i.e. certificates for the protection of species, would be created and sold for the protection of these natural areas ?-- although these certificates do not yet exist in a generally recognized form. Until then, carbon credits would be used, i.e. the now familiar CO2 emission certificates.

A deal more lucrative than Big Oil?

Pitkowitz estimates that six billion U.S. dollars could be generated within 20 years. Investors would be able to make a return on their investment, and the government would collect taxes. But the bulk of the money would go toward increasing the size of natural areas being protected, Pitkowitz said.

A deal that could bring the state more than Big Oil? "We have a chance in the government[s’ oil] auction because we can show that we can be more profitable with conservation than with oil drilling," Pitkowitz says. Oil drilling, he says, is a complex, 50-plus-year undertaking.

Ten years usually pass before the first oil flows - and there's no tax revenue until then, either. But in the meantime, roads, railroads and pipelines are being cut into the forests, the manager says. "You know that as soon as there's a road, there's going to be deforestation around it.

Partly skeptical environmentalists

Greenpeace knows this, too. The environmental organization should welcome the plans. But it tends to see the stock exchange - as before - as the perpetrator of the destruction of nature, now masquerading as the savior. "Behind all these mechanisms are people in the U.S., Europe or Asia who see the Congo Forest as a means to make a lot of money," believes Ranece Ndjeudja Petkeu, who looks after the region for Greenpeace.

"The communities living there will gain nothing from this." What's more, rigorous protection often cuts them off from their livelihoods. Pitkowitz knows the criticism and has prepared himself: representatives of the rainforest communities and experts in biodiversity sit on the advisory board of the fund, whose statutes include the protection of biodiversity as one of its main goals.

Economic model for nature conservation

Frauke Fischer, who lectures on species conservation and ecosystems at the University of Würzburg and is a member of the scientific advisory board of WWF Germany, is one of them. "Nothing happens against the will and resistance of the local population and indigenous groups. By no means," she emphasizes.

She considers the assistance of the financial sector in nature conservation to be indispensable - donations or development aid could not raise the funds that the UN says are needed. "We have a biodiversity conservation gap of $700 billion a year," Fischer says. "If we don't manage to come up with an economic model for conservation very quickly, then the economic model of destroying nature, which has unfortunately worked very well for 200 years, will continue to be pushed forward."

Threatened flora and fauna

Practically, this means for the affected regions: Dangers for Virunga National Park, a UNESCO World Heritage Site where the endangered mountain gorillas live. A danger also for the Congo's wetlands, the largest in the world, which bind incredible amounts of CO2 - three times the amount of global CO2 production. It could be released in whole or in part by drilling.

And biodiversity? Africa alone loses more than 6400 animal species and more than 3100 plant species every year, many of them native to rainforests, conservationists say.

No wonder the financial industry is also thinking about saving the planet on which it too lives. The economic consultants at Deloitte estimate that the market for biodiversity certificates will be worth more than 160 billion U.S. dollars by 2030 - even though there is still no truly standardized method for calculating the value of individual certificates.

?Government does not want to be deterred from drilling

Arguments with which the DR Congo government now renounces its plans? At the start of the oil auction last July, DR Congo's minister in charge, Didier Budimbu, told the Financial Times that almost ten years ago the government had refrained from drilling in Virunga after Hollywood actors Ben Affleck and Leonardo DiCaprio had put pressure on the government with a documentary film.

This time, the government will not be deterred from drilling. Whether Pitkowitz's profit calculation can change that now, a year later, will be shown by the conclusion of the bidding round. It will end in July and August - initially for the wetlands that are particularly important for the climate.