by Audrey Irvine-Broque & Jessica Dempsey
We need to address the elephant in the room: biodiversity targets necessitate governments to halt destruction, while the rules and norms of global economic governance often pressure governments to allow biodiversity destruction.
These problems are structural in the sense that they reproduce themselves through routine responses and technical practices, rather than only misguided decisions or lack of political will. But this doesn’t mean they are apolitical - far from it. Some people benefit greatly from these rules, and accumulate increasing wealth, while others face the most extreme ends of the consequences, in which their territories and ways of life are continually rendered disposable. This system also exposes governments to these pressures unequally, meaning that some governments, particularly in the Global South, face stricter constraints than others to challenge these norms. Understanding both the routine, technical elements of this system and the power dimensions that keep it in place is critical for challenging a financial system predicated on extractivism.
How do the current rules of global economic governance hamper the implementation of the Convention?
First, they can incentivize export-oriented economic strategies that generate short-term benefits for some, but long-term ecological degradation and instability for many others. Many countries rely on commodity exports to earn foreign currency, which they need for importing medicine, machinery or technology, as well as for repaying external debts. When fiscal problems worsen - including due to external shocks or natural disasters - governments often turn to international financial institutions for emergency support, where they are frequently encouraged to lean deeper into these export sectors to help buy back stability. This can lead to a vicious cycle, in which managing debt crises in the short-term via unsustainable resource extraction further exposes governments to vulnerability in the future.
Second, high debt burdens, along with norms and institutions that reward fiscal consolidation, limit investment in biodiversity protection, restoration, and transition away from destructive sectors. Credit ratings often count proactive actions to protect ecosystems as a cost, with more severe financial consequences for poorer governments. Meanwhile, race-to-the-bottom taxation, tax avoidance by extractive sectors and tax havens drain government budgets further.
Third, both legal and market institutions can expose states to financial penalties for implementing strong environmental policies. If states signal moves away from harmful sectors, or institute stronger regulations, they can face financial penalization in the form of credit downgradings, capital flight, currency runs, or even lawsuits from international investors. All of this can dig governments into deeper financial holes, exacerbating the above problems. This can constrain policy pathways that would be otherwise aligned with the KMGBF and the Convention.
Recognizing that there are unequal dynamics does not let any government off the hook for environmental destruction, human rights violations or land dispossession that accompany resource decisions. Instead, it points to the collective responsibility to ensure that these international barriers are reformed. The power of domestic elites, industry lobbying, and regulatory capture can limit efforts to protect biodiversity and healthy enviroments. But these domestic factors also operate inside a wider international system that repeatedly narrows the space for ecologically-sound decision making.
The Convention can’t unilaterally reform these rules. But it can more clearly name the contradiction between these norms and biodiversity conservation, and undertake an agenda of work to ensure that financial system transformation is aligned with biodiversity targets.
Read more in the report "We need to talk about the elephants in the room"