Interpretation: “Opinions on further Strengthening the Protection of Biodiversity” and its impact on green finance, sustainable development, and the Belt and Road Imitative (BRI)

On October 19, 2021, the General Office of the Central Committee of the Communist Party of China together with the General Office of the State Council issued the “Opinions on further Strengthening the Protection of Biodiversity”. As a document issued by both the General Office of the Central Committee – the party body responsible for providing information and policy research for the Central Committee and the Politburo, and the State Council – the highest government body of China, this opinion is highly influential to understand future development and laws concerning biodiversity protection in China. The publication coincides with the start of COP15 on biological conservation in Kunming, China.

In this interpretation, we summarize the opinions and evaluate it for its potential impact for green finance, the Belt and Road Initiative (BRI) and broader aspects of sustainable finance and development.

Overview of the Opinions

The Opinions introduce the concept and practice of China’s biodiversity conservation efforts, and elaborates on the role of China’s biodiversity conservation ambitions in the international community. The opinions focus on four main aspects :

1. The role of biodiversity for cultivating a harmonious coexistence between nature and man.
2. How to improve the effectiveness of biodiversity protection through strengthening the national park system, in-situ and ex-situ protection, and biosafety management, improving the quality of ecological development, and promoting biodiversity conservation and green development.
3. How to improve biodiversity governance capabilities through improved regulations and policies, law enforcement and supervision, and public participation.
4. International cooperation in biodiversity conservation

Part I: Harmonious coexistence between man and nature

The Opinion describes the loss of biodiversity and degradation of ecosystems at a high level, and emphasises the importance of multilateral effort, prioritising biodiversity protection, and sustainable development in addressing these issues.

Part II: Biodiversity protection

Part IIa: Optimising in-situ protection systems

There are two key elements to optimize the in-situ protection systems: national parks and red lines of ecological protection.

Firstly, the Opinion emphasizes the importance of building a system of nature reserves and national parks. Since 1956, China has established nearly 10,000 natural reserves, accounting for approximately 18% of China’s land area. This has helped increase the wildlife population: the wild population of giant pandas has increased from 1,114 to 1,864 in 40 years. The number of crested ibis has also grown from 7 at the time of discovery to over 5,000 currently.

In recent years, China has actively promoted the establishment of national parks as a foundation for protecting habitats, improving the quality of the ecological environment, and maintaining national ecological security. Since 2015, 10 national park system pilot projects have been launched.

Secondly, the Opinion also highlights the importance of conserving critical ecosystems such as forests, deserts, wetlands, mangroves, coral reefs and seagrass beds. This builds on the acclaimed China Ecological Conservation Red Line (ECRL) initiative, which was started in 2011.

Part IIb: Optimising the ex-situ protection system

Ex-situ protection conservation projects typically involve endangered species rescue projects and the collection and preservation of biological genetic resources. To date, 250 wild animal rescue and breeding bases have been established, and over 60 rare and endangered wild animals have been artificially propagated.

Part IIc: Strengthening biosafety management

Elements of China’s biosafety strategy include a biosafety law, alien species invasion prevention and control mechanisms, and biological genetic resources protection. More specifically, these involve strengthening the prevention and control of alien species at ports, improving the safety and management of genetically modified organisms, and conducting surveys of important biological generic resources. The third national survey and collection of crop germplasm resources is currently underway, with 92,000 copies of crop germplasm resources collected. Of these, 90% are newly-discovered. These efforts have proved successful. In the past 10 years, China has discovered an average of 200 new plant species each year.

Part IId: Improving the quality of the ecological environment

Increasing ecological protection and restoration efforts to promote the stability of the ecosystem is a fundamental tenet of maintaining China’s national ecological security. China has implemented a series of ecological protection and restoration projects, and promoted systemic management of different landscapes. These efforts have resulted in China’s forest area and forest accumulation maintaining double growth for 30 consecutive years. Approximately 25% of the newly-added green area globally from 2000 to 2017 has come from China.

China has also been actively battling pollution. In 2020, the national average concentration of fine particulate matter (PM2.5) was 33 micrograms /cubic meter, a decrease of 28.3% compared with 2015.

Part III: Governance

Part IIIa: Improving policies and regulations

China has taken significant steps towards strengthening its organizational leadership in relation to environmental policies and regulations. It has established the National Committee for the Conservation of Biodiversity of China, and set out major biodiversity conservation projects and a biodiversity conservation network in the 14th Five Year Plan for the National Economic and Social Development of the People’s Republic of China and the Outline of Long-Term Goals for 2035.

China has also bolstered its laws to protect its biodiversity. Over the past 10 years, more than 20 biodiversity-related laws were passed, to safeguard the environment. Various provinces and municipalities have also promulgated regulations based on local conditions.

There has also been a strengthening of law enforcement. Environmental protection inspections and the crackdown on biodiversity-related crimes have been stepped up.

Part IV: The role of international cooperation for biodiversity conservation

Lastly, because biodiversity loss is a global challenge, the opinions elaborate on China’s view on multilateralism and international cooperation in biodiversity conservation. The opinions highlight how China has actively implemented the Convention on Biological Diversity protocols. China also hopes to support multilateral cooperation mechanisms, such as the Belt and Road Initiative (BRI), and the South-South Cooperation, in the protection of biodiversity particularly in other developing countries through capacity building and green finance. The Opinions also highlight the work of the BRI International Green Development Coalition (BRIGC) that provides a big data platform for ecological and environmental protection services from over 100 countries.

Evaluation of the Opinions

Overall, the opinions provide ambitious statements for biodiversity protection like “insist on respecting nature and giving priority to protection in social development” and “take biodiversity as the basis, goal and means of sustainable development”. This ambition goes beyond the role of biodiversity as a tool for economic well-being, and emphasizes the role of biodiversity beyond economic development. It also provides (previously reported) concrete goals, such as 18% land area under nature reserve, forest coverage rate of 244.1% and grassland vegetation coverage of about 57%.

The opinions also strengthen the role of the central government in policy design, policy implementation and oversight, where biodiversity conservation mechanisms should be “government-led” with corporate actions and public participation to follow. The opinions also elaborate on China’s role in international biodiversity governance as an implementer of international conventions, such as the Convention on Biological Diversity (CBD), as a contributor to the global biodiversity conservation efforts and as a provider of capacity and innovation for global conservation efforts in the Belt and Road Initiative (BRI) and in the South-South cooperation, particularly with China’s Southern neighbors. The opinions also briefly touch on the role of green finance, however mostly as a broader cooperation mechanism in the BRI.

The opinions provide an important high-level framework for the future of China’s biodiversity conservation. It puts biodiversity conservation as a priority in social development (although that  statement is weakened in the later parts of the opinions where biodiversity conservation is “an important part of the construction of ecological civilization). It covers a broad range of topics, but some important topics and relevant commitments for biodiversity conservation could be strengthened and could require further development:

• The role of the financial sector to accelerate biodiversity finance needs to be strengthened. While the opinions stipulate the “use of fiscal and tax incentives to actively mobilize private capital to invest in biodiversity conservation”, it does not focus on the important responsibility of the financial sector to shift financial flows away from biodiversity-destroying activities.
• The role of data and data standards for biodiversity conservation and biodiversity loss management should also be strengthened, particularly in an internationally aligned standard for the financial sector. The global financial community is working in several working groups on biodiversity finance standards, such as the Task Force for Nature Related Financial Disclosure (TNFD), the Science-based targets initiative (SbTI), IRIS+ and others. China, with rich biodiversity, should seize the moment to accelerate sharing relevant data and provide capacity to the global data standardization ambitions. This would allow relevant institutions, including financial institutions, to better evaluate biodiversity impacts of projects and other assets and thus evaluate de-facto biodiversity risks.
• The role of trade and trade finance (apart from illegal trade of wild animals and plants which is highlighted in the opinions) needs further clarification, particularly as China is a main importer of agricultural and timber products that severely risk deforestation in countries like Brazil, Indonesia, Papua New Guinea and others. By more clearly banning trade of illegal sourced goods (not just the illegal trade of protected plants and animal, but also the trade of agricultural products and soft commodities, like timber, that were grown on illegally de-forested land, the financial sector would have to become more involved in green trade finance as to avoid, e.g., money laundering.
• The ambition to become nature-positive after 2030 as an overall economy and in ideally most economic activities and the ambition to protect 30% of land and water by 2030, as suggested in the COP15 documents, is not taken up and therefore deviates from more multilateral agreements. If this commitment were to be taken up as a high-level commitment, both the legal system and the financial system would have to develop better compliance mechanisms to adhere to this goal, which again would change the calculus of biodiversity finance.
• Commitments to avoid nature-destroying BRI investments and economic activities that negatively affect biodiversity richness in the BRI needs strengthening. As the BRI includes some of the most biodiversity-rich countries, such as the DR Congo, or countries South-East Asia, as well as Latin America, a stronger top-level guidance requiring the application of existing Chinese and local laws and ideally more stricter international soft law in accordance with the Green Development Guidelines issued in July by the Ministry of Commerce (MOFCOM) and Ministry of Ecology and Environment (MEE) would be important to avoid further destruction of biodiversity in the BRI. This would also be in line with the Green Development Guidance issued by the BRIGC, that requires “green” and “yellow” project to do no biodiversity harm and avoid all biodiversity hotspots and key biodiversity areas (KBAs).