Show Me The Money

The chasm between aspiration and reality comes down to the stalemate on money at CoP 16.

A 2020 publication, Financing Nature: Closing the Global Biodiversity Financing Gap, estimated at least US$700 Billion of investments was required in the lead up to 2030 to come close to implementing projects at the scale needed to reverse biodiversity loss.

So far, the Global Biodiversity Framework Fund (GBFF) has received only US$163 million from 12 contributors to implement the Kunming-Montreal Global Biodiversity Framework (KMGBF). This level of funding is of no consequence when compared to the US$700 billion needed. To put it in context, the US$163 million to the GBFF is just US$13 million more than the price of 1 luxury apartment in Manhattan.

Everyone knows the necessary funding is available, it is just currently being spent on fossil fuel subsidies, farming subsidies, fishing subsidies and logging subsidies to name a few. Add to this the conservatively estimated, US$30 trillion of unproductive money sitting in secrecy jurisdictions. At the 15% minimum tax rate G7 finance ministers agreed on to crack down on corporate tax dodging, this would provide US$4.5 trillion in additional funds just from the money currently parked, unproductively, in these tax havens. In addition, businesses can also be forced to pay a levy reflective of their place in the value chain or profits.

Let’s be clear, the way money really works means that we don’t need private money to close this gap. We don’t need private finance for nature, we don’t need private green finance; governments can issue the money needed. And, in parallel, governments must stop what is issued becoming unproductive (sitting in tax havens) and destructive (used for speculation and unnecessary consumption) money.

We have been led to believe that national governments are incapable, and we need the private sector to save the world. The business world likes to portray itself as the smart kid on the block, best placed to solve our problems provided governments and regulators don’t interfere with its activity. And because in the main they get what they want, too many modern-day industrialists buy into the delusion that they are the smartest guys in the room.   

Governments need to start putting businesses back in their box, by cancelling all destructive subsidies, most of which go to the private sector. The liberated funds can go towards tackling the climate and biodiversity crises. This will cause short-term pain for both industry and politicians, so at the moment the courage is still lacking (despite this being an agreed upon goal in the Kunming -Montreal GBF).

While this ‘classic impasse’, or as Terry Pratchett liked to call it, ‘an imp arse’, is maintained we will continue to squander the short time we have left to deal with the climate and biodiversity disasters we collectively face. As this is allowed to continue, the chasm between aspiration and reality is filled with phantom solutions, such as biodiversity credits and voluntary ESG governance.   

Supporting phantom solutions is nothing more than virtue signalling, providing what Tad DeLay, in his book the Future of Denial, called a “comforting fantasy” in which “passion will get the job done without mucking up free markets with regulation or central planning”.

Wealthy industries and companies don’t want to lose lucrative subsidies. Companies and most of their investors don’t want to lose lucrative tax minimisation schemes. A stalling tactic, and one we are again seeing at the CBD CoP16, is the push for the development of more measurement tools and data.

Business and industry distract us with corporate social responsibility, multi-stakeholder initiatives, pledges, pacts, forums, certification schemes and glossy sustainability reports. CSR and sustainability reports have proven worthless over the last 3 decades. Multi-stakeholder initiatives have been found to be unfit-for-purpose after a comprehensive analysis conducted in recent years. Pledges, pacts and forums appear to be no more than elite networking and PR opportunities than any attempt at serious action. Companies are in the business of making profits, not saving the world. Believing anything else is buying into these distractions.

Businesses let themselves off the hook by publicly calling on governments to adopt policies, whilst lobbying in secret against any policies detrimental to profit or growth. Governments have for 40 years taken a hands-off approach with business, saying that the ‘free market’ will fix everything and there is no need for them to be prescriptive. Together, business and government, have created an illusion of an ‘effective’ system, whilst basically doing nothing that would impede growth or profits.

This has left us feeling powerless, with seemingly no-one to turn to, to get effective, timely action to at least avoid the worst possible scenario, the complete collapse of industrial civilisation.

Of course, this outcome has been engineered, the art of distraction comes with a big budget for marketing and advertising purposes. But the budget is worth it because it is still infinitely cheaper than dealing with the problems outlined in the IPBES and IPCC reports. So, governments and business have been willing to cover the costs of distraction, that has enabled inaction and a business-as-usual approach for the last 30 years. Climate and biodiversity conferences have become a part of cost of maintaining the illusion. The merry-go-round of performative events, described by one journalist as “[feeling] completely surreal and, if I’m being honest, a little scary”.

As Delay says asks in his book, “Will capitalists ever voluntarily walk away from hundreds of trillions unless they are forced to do so?” The honest answer is NO. He also asks, “And, if not, who will apply the necessary pressure?”. Given the laws to curb activism and whistleblowing, it is evident which groups are carrying the load. 

If we want to close the gap between aspiration and reality, we need to educate ourselves about how money works. The funds are available to invest in the two most important issues we face, the climate crisis and biodiversity loss. The world doesn’t need funding from business and investors to help us “make peace with nature”.

The broader population need to force governments to corral (regulate and legislate) the private sector into working within planetary boundaries, and to get out of the way, so we can finally make some progress.