- Decision 15/9 of the Convention on Biological Diversity (CBD) was envisioned as a multilateral mechanism to fund conservation via the sharing of benefits arising from the use of digital sequence information on genetic resources (DSI).
- Hailed as a landmark, what royalties would be paid for this “natural information” and via what means are still unclear as the CBD enters a new round of negotiations soon in Cali, Colombia.
- To make the Decision operational there, delegates met in Montreal this month, and it’s still not certain if biodiversity-rich nations will be fairly compensated, but a new op-ed contends that “The appropriate interpretation of genetic resources as ‘natural information’ would imply economic rents in the benefits to be shared.”
- This post is a commentary. The views expressed are those of the author, not necessarily Mongabay.
Underlying parables of biblical metaphors are often only dimly remembered. The name Babel comes from the Hebrew “to confuse,” בָּלַל (bālal).
The tower so ridiculed was an affront to Yahweh. Fast forward some three thousand years: Delegates will be gathering in Cali, Colombia from 21 October to 1 November 2024 to thrash out Decision 15/9 at the 16th Conference of the Parties (COP) to the UN Convention on Biological Diversity (CBD).
David Cooper, the outgoing Executive Secretary of the Secretariat, heralded Decision 15/9 – a “multilateral mechanism for benefit-sharing from the use of digital sequence information on genetic resources” – as a landmark for biodiversity conservation. To make the Decision operational, 250 delegates met in Montreal, Canada from 12 to 16 August 2024 for the second Working Group on DSI (WGDSI-2). Discussion focused on how to share benefits from the use of “digital sequence information on genetic resources” (DSI).
Development of the Decision is groundbreaking. A tower is under construction. But wherefore DSI?
From such an innocent question, confusion ensues. The noun for bālal is bil’bul (בִּלְבּוּל), which also means disorientation. Perhaps because the term DSI cannot withstand examination, no one claims authorship. The Report from the 2018 Ad Hoc Technical Expert Group (AHTEG) reached consensus that DSI is not appropriate. When the AHTEG was re-constituted in 2020, the term nevertheless moved forward as a placeholder, apparently perpetually! The vaunted tower would be erected, and criticism would be damned.
Article 1 (Objectives) of the CBD establishes that users of genetic resources are obligated to share benefits that arise from use. But Article 2 (Use of Terms) is sloppy. “Material” in the “genetic material” of “genetic resources” was never defined. Is “genetic material” just the biological medium? Or does the “material” include information? To the latter, science answers unequivocally in the affirmative. Yet the question of whether DSI lay within the scope of the CBD was left unresolved in Decision 15/9. Rather than deploy “genetic resources” for the multilateral mechanism, COP15 made the officially undefined placeholder the tower’s cornerstone. Why? The answer lies in the economics of information.
The appropriate interpretation of genetic resources as “natural information” would imply economic rents in the benefits to be shared. This abstraction goes back to the classical economist David Ricardo in the 19th century and the repeal of the English Corn Laws. In the modern context, rent may be conceived as the difference between what one pays and what one would have paid in a competitive market. Industry enjoys rents over artificial information through limited-in-time monopolies of intellectual property, such as patents and copyrights. Decision 15/9 does not extend equal treatment to providers of natural information, where the medium of communication is digital.
The “Finding Compromise” report of the WiLDSI Project, funded by the German Government, contemplates royalties as low as 0.01%: on a blockbuster biotechnology of $1 billion annual revenue, the royalty income would be a mere $100,000. In contrast, the economic literature on natural information suggests rent-rich royalty percentages should be in the high-single and even double-digits.
Many delegates at WGDSI-2 will serve on the delegations of COP16. Why would any mega-diverse Party to the Convention go along with such an infinitesimal royalty? Economics also provides an answer to this question: cost shifting.
In lieu of rent-rich royalties, advocates of Decision 15/9 propose a 1% retail tax on all biological products. For biotech industries, this pitiful obligation is Manna from Heaven, but not so for the average consumer worried about grocery bills – the 1% retail tax is as inefficient as it is inequitable.
Will Astrid Schomaker, the incoming Executive Secretary of the Secretariat, break the taboo on economic rents and natural information? She joins a Secretariat heavily invested in Decision 15/9, where talk has been anything but cheap. Will the Bezos Earth Fund, which provided funding for WGDSI-2, heed the lesson of sunk costs (i.e. spending good money after bad)?
Almighty wrath will descend for what Decision 15/9 does not do: prioritize the alleviation of the drivers of extinction (e.g. habitat loss). The Decision slates funds for conservation projects, which do not necessarily reduce extinction risk and may have been funded anyway (i.e. fungible projects, like planned reforestation of watersheds or urban greening initiatives). The undiscussed alternative to Decision 15/9 is “bounded openness over natural information,” where genetic resources flow unencumbered and rent-rich royalties are imposed only on commercially successful biotechnologies that enjoy intellectual property protection. Article 10 of the Nagoya Protocol, titled “Global Multilateral Benefit-Sharing Mechanism,” would be the vehicle.
Fast rewind: Genesis still speaks. Punishment for having constructed the tower was not just its destruction, but something long-lasting: a unified people would be forever separated through incomprehensible languages. The Earth Negotiation Bulletins published daily during WGDSI-2 detail the cacophony of the tower under construction. The jerry-built structure teeters, self-congratulations by the former and current executive secretaries notwithstanding.
Alas, delegates are hellbent to reach for the sky. COP16? Heave-ho. The hubris of Decision 15/9 would not be lost on the ancient Hebrews.
Joseph Henry Vogel is professor of economics at the University of Puerto Rico-Río Piedras. He has published widely on the Convention on Biological Diversity and served as advisor to the Ecuadorian delegation at COP2 and COP9.
Banner image: A rhinoceros hornbill courtesy of Mark Louis Benedict via Flickr.
This is the third in a series of commentaries on Decision 15/9 by economist Joseph Henry Vogel, see the first two here:
Will a billionaire bankroll biodiversity? CBD Decision 15/9 as potential ‘goldmine’ (commentary)
‘Fungibility’ could sink Convention on Biodiversity’s funding mechanism Decision 15/9 (commentary)