Rich countries should compensate global South for loss and damage of biodiversity driven by overconsumption

Major driver of biodiversity loss not covered by fund agreed at COP28.

Press release, 12 January 2024

Richer countries need to devise a way to pay compensation to communities in the global South for the loss and damage of biodiversity and ecosystems due to their unsustainable levels of consumption, according to IIED.

The new loss and damage fund agreed at the COP28 climate negotiations will only address that caused by climate change. It includes the loss and damage of tangible things like tradeable goods, houses or property, as well as non-economic categories that are harder to quantify, including biodiversity.

But while climate change does have an impact on species and ecosystems, most biodiversity loss and damage is caused by habitat loss and degradation as well as over-exploitation, and this is typically being driven by unsustainable commodity consumption habits in the global North.

For example, the demand for beef products in richer countries is leading to tropical deforestation, while European consumption of fish from the coastal waters of West Africa is leading to increased poverty, unemployment and declining health in local communities reliant on fishing for income and food.  

Dilys Roe, a principal researcher at IIED, said: “At heart, this is a question of injustice in trade relations. Poorer countries that need to prioritise investment and development do not have the same negotiating power as their richer counterparts. And small-scale farmers and fishers cannot compete with powerful commercial interests. The market is not going to solve this issue.

“We need a system that ensures fair compensation by those countries consuming meat, timber and other commodities at the expense of the biodiversity and ecosystems that people in the global South rely on.”

Researchers at IIED are investigating the importance of nature to people, economies and climate change, as well as practical recommendations about how biodiversity loss and damage could be addressed.

Roe added: “There is huge potential for the damages associated with biodiversity loss to be addressed either through the climate loss and damage fund or through an additional 'consumer pays' fund. What that looks like in practice can and should be determined by the Indigenous Peoples and local communities directly affected by this crisis.”