Blue finance at COP16: anchoring the future of ocean conservation

The Biodiversity COP16 conference that starts today will be critical to advancing comprehensive ocean biodiversity conservation efforts. Ambitious commitments are needed – especially in blue finance – to safeguard the ocean’s indispensable contributions to humanity, write Lea Reitmeier, Elena Almeida and Torsten Thiele.

COP16 – the 16th meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD) – marks a crucial moment in global environmental negotiations. Taking place in Cali, Colombia from 21 October to 1 November, it will be the first meeting since the adoption of the Global Biodiversity Framework (GBF) and there will be a particular focus on financial mechanisms to implement the GBF.

Marine ecosystems are expected to feature heavily at COP16, too, including in the discussions related to finance. This is of vital importance because the ocean, covering 70% of our planet, plays a pivotal role in regulating climate, absorbing carbon and supporting biodiversity, including in its depths. This function is under threat as ocean-related economic activities continue to expand at a rapid pace, with the prospect that new challenges and interconnected risks may emerge. The wider health of the ocean is already at risk, and environmental degradation in one area can have far-reaching consequences elsewhere, including on land.

Finance is a critical enabler of ocean conservation efforts as part of the transition to a sustainable and regenerative blue economy. Based on decisions taken at COP15 and various working group meetings, the CBD secretariat prepared an agenda and a compilation of draft decisions to be discussed and agreed at COP16. Below we examine the ocean–finance nexus in the context of the summit, identifying areas for particular attention.

Strategic planning, indicators and monitoring of sustainable resource use

During COP16 parties will be asked to update and complete the monitoring framework for the GBF (agenda item 10). This will include reviewing indicators proposed at COP15, including those related to the ocean, such as the proportion of the total research budget allocated to research in the field of marine technology, and the use of ocean accounts in planning processes.

Scientific research plays a crucial role in informing financial decisions to drive meaningful action for a sustainable ocean economy. Quantifying the diverse values of the ocean through ocean accounting facilitates blue finance that is more targeted at specific activities, and in turn contributes to tangible and measurable conservation outcomes. Initiatives such as the Global Ocean Accounts Partnership play an important role in developing methodologies to measure and manage sustainable ocean development.

However, a number of the proposed indicators overlook the role of the ocean. For instance, GBF target 8 includes an indicator on the impacts of land-use change on carbon stocks but this seems to overlook the impacts on marine ecosystems like mangroves. Similarly, despite the fact that the description of target 10 explicitly mentions aquaculture and fisheries, this is not reflected in the suggested list of indicators.

Making National Biodiversity Strategies and Action Plans (NBSAPs) more effective

NBSAPs will also be discussed in agenda item 10. These are national frameworks that include detailed plans and actions for how countries plan to achieve GBF targets. At COP15 (decision number 15/6) countries committed to submitting their NBSAPs ahead of COP16, but unlike the nationally determined contributions (NDCs) under the Paris Agreement, there is no legal obligation to do so.

Credible and ambitious NBSAPs can guide national actors on how a country plans to meet GBF goals, but currently, marine biodiversity is insufficiently covered by these plans. Many countries set low, unambitious targets for marine conservation, falling short of what is needed to safeguard these ecosystems. Concrete strategies are needed for expanding and managing Marine Protected Areas (MPAs) to meet the target of conserving at least 30% of marine ecosystems by 2030. The current proportion of MPAs is only about 8%, in contrast to the 16% of terrestrial protected areas (though this, of course, also falls short). There is also a noticeable lack of integration between terrestrial and marine ecosystems in many NBSAPs despite their physical interconnectedness, and this hampers effective biodiversity conservation.

In addition, monitoring, implementation and enforcement of marine conservation measures are often inadequate within NBSAPs, limiting their effectiveness. Without strong oversight and enforcement mechanisms, even well-designed conservation plans struggle to achieve meaningful impact. Establishing robust financing strategies to support MPAs and ensure their effective long-term management and monitoring is vital for this. However, the lack of detail on MPAs and their financing strategies within many NBSAPs underscores the importance of focusing discussions, both formal and informal, on the development of solutions in collaboration with key stakeholders, such as local communities, governments, banks and investors.

Leveraging financial resources for the ocean to support implementation of the GBF

To date, the level of funding from public sources, philanthropic contributions, official development assistance and the private sector has been insufficient to adequately support measures that ensure the health of the ocean, despite GBF target 19 to raise US$200 billion per year by 2030 for conservation and sustainable use of biodiversity.

At COP15, decision 15/15 was adopted, which establishes the financial framework and emphasises the role of the Global Environmental Facility and the need for increased resource mobilisation, transparency and accountability for implementing the GBF. Additionally, decision 15/07 addresses the critical need to mobilise financial resources to support the implementation of the GBF, focusing on resource mobilisation for biodiversity conservation, setting ambitious targets for financial contributions and reforms to harmful subsidies. It emphasises the importance of increasing financial flows, particularly to developing countries, while encouraging innovative financial solutions, such as blue bonds, and ensuring funds are tracked transparently. An important but often overlooked opportunity is provided by the insurance sector, which can help shape the investability and risk profile of ocean-related activities. Talks on how to establish a Special Trust Fund and review of the resource mobilisation strategy will take place under agenda item 11 at COP16.

Many discussions around blue finance focus on innovative instruments to mobilise capital for ocean conservation. However, it is equally important to address ocean-related financial risks. Rapid economic shifts, emerging industries and the unpredictability of climate change present significant challenges, potentially leading to conflict between sectors and exposing the financial system to instability, sometimes referred to as ‘blue swan’ events. Despite the GBF’s call for a whole-of-government approach to biodiversity loss, central banks and financial regulators have been slow to engage. Ocean degradation threatens not only individual entities but also the broader financial system, and ocean-related risks – both physical and those related to actions taken in the transition to sustainability – are not yet fully integrated into financial decision-making.

Related to this, the objective of target 15 of the GBF is to encourage and enable businesses and financial institutions to adopt policies that facilitate regular monitoring, assessment and reporting of their impacts on biodiversity. However, financial institutions face several challenges, such as data and metrics. For example, few banks incorporate ocean protection policies into their environmental or social due diligence requirements, while finance for activities that negatively affect the ocean remains significant.

Sharing the financial benefits of digital sequence information

There will also be important negotiations at COP16 on how to operationalise a multilateral mechanism and global fund for the sharing of the benefits arising from digital sequence information (DSI). DSI describes the genetic information derived from organisms that occur in nature, with the resulting genetic codes managed digitally. Digital genetic codes are extremely valuable for the potential discovery of new drugs, proteins or materials; the amount of DSI and users of DSI is accelerating.

While a general framework for benefit-sharing from DSI was agreed at COP15, the focus at COP16 (agenda item 9) will be on finalising the technical and policy options to set up a fund, which is crucial to ensuring the equitable sharing of biodiversity wealth. Discussions in Cali will include who will pay for the use of DSI and how much, what would trigger such payments, how the collected payments will be disbursed, and how the entire set-up will be managed and governed. 

While DSI in marine genetic resources found in areas beyond national jurisdiction is set to grow and will be regulated under the Biological Diversity of Areas beyond National Jurisdiction (BBNJ) agreement, the CBD governs DSI from both terrestrial and marine genetic resources that originate from within national jurisdictions. It is of utmost importance that both international agreements are harmonised on this aspect.

Future direction: a holistic approach to policymaking

A holistic and integrated approach to policymaking is required to ensure a sustainable future, which considers terrestrial and marine-based activities. The ocean is essential to life on Earth. Its unique characteristics must be considered and reflected as the conversation about biodiversity continues.