{"id":76234,"date":"2025-02-06T10:15:02","date_gmt":"2025-02-06T10:15:02","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=news&p=76234"},"modified":"2025-02-06T10:15:56","modified_gmt":"2025-02-06T10:15:56","slug":"the-cali-fund-unlocking-industry-contributions-to-finance-biodiversity-conservation","status":"publish","type":"news","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/news\/the-cali-fund-unlocking-industry-contributions-to-finance-biodiversity-conservation\/","title":{"rendered":"The Cali Fund: unlocking industry contributions to finance biodiversity conservation"},"content":{"rendered":"\n

The recent establishment of the ‘Cali Fund’ creates a mechanism for industries that commercially benefit from biodiversity to contribute to its conservation. Lea Reitmeier and Agata Makowska-Curran provide their perspective on why this agreement is groundbreaking and outline the contributions made by a multi-disciplinary team from LSE during its negotiation at the UN Biodiversity Conference, COP16.<\/p>\n\n\n\n

Rather than being separate from nature, the stability and function of our economies is embedded in it<\/path><\/svg><\/a>. But biodiversity is declining faster than at any time<\/path><\/svg><\/a> in human history. And as species of birds, insects and plants become extinct we lose not only the beauty of the natural world but also the important genetic information it holds, creating a significant source of financial risk<\/path><\/svg><\/a>. Thus, a key task during the negotiations at last October’s UN Biodiversity Conference, COP16 was to agree how to ensure the fair and equitable sharing of benefits of genetic information. The resultant Cali Fund entrenches the notion that biodiversity is not ‘free’<\/path><\/svg><\/a>, with sectors from agriculture to biotech, cosmetics, pharmaceuticals and AI asked to share the economic gains from their use of nature’s genetic information as early as this year.<\/p>\n\n\n\n

Supporting benefit-sharing from digital sequence information<\/h2>\n\n\n\n

Genetic sequence information, referred to as digital sequence information (DSI<\/path><\/svg><\/a>) in policy discussions, is derived from organisms such as plants and fungi from mega-biodiverse developing countries<\/path><\/svg><\/a>. Details of an organism such as its DNA or RNA are then stored and managed digitally in databases. DSI is an asset of global economic significance<\/path><\/svg><\/a>; it holds immense potential for innovations in drug discovery, proteins and materials,<\/path><\/svg><\/a> with both the volume of data and its users growing rapidly. So far, however, the commercial benefits of its use have predominantly benefited entities from high-income countries, including pharmaceuticals, cosmetics, agriculture and the fast-growing AI sector<\/path><\/svg><\/a>.<\/p>\n\n\n\n

This monopolisation of benefits has been the source of heated international debate, with some referring to it as ‘biopiracy<\/path><\/svg><\/a>’: a problem that has been recognised for some time, with the Nagoya Protocol<\/path><\/svg><\/a> of 2010 representing the first attempt at equitable sharing of benefits from physical<\/em> genetic resources. However, that agreement did not cover DSI, which due to its intangible nature does not fall under the definition in the Convention on Biological Diversity (CBD) of ‘genetic resources<\/path><\/svg><\/a>’. To address the emerging need to include DSI, a new multilateral mechanism for DSI-benefit sharing was established (decision 15\/9<\/path><\/svg><\/a>) and a supporting global fund agreed at COP15 in 2022, which at COP16 was to become the Cali Fund. The Fund provides a mechanism to collect funds from DSI users and distribute them to DSI providers, including biodiversity-rich countries and stewards of nature, such as Indigenous Peoples and local communities.<\/p>\n\n\n\n

LSE’s contribution to the Cali Fund’s design<\/h2>\n\n\n\n

Last September, experts from several departments at LSE including the Grantham Research Institute, LSE Law School and the Department of Accounting, along with external members of the LSE-funded Ocean Biodiversity Collective, notably One World Analytics, conducted a policy roundtable, presenting ideas to COP negotiators on how the global fund could be designed. The LSE model that emerged from these discussions on how to operationalise industry contributions to the multilateral mechanism has been published in two policy briefs and is rooted in three key principles:<\/p>\n\n\n\n