Governments face mounting pressure to reform harmful subsidies and boost nature investment as rising food prices expose economic vulnerabilities.
The global biodiversity financing gap has nearly doubled to $1.3 trillion annually, exposing a widening divide between international conservation commitments and actual investment as governments prepare for crucial finance discussions at the UN biodiversity summit in Armenia in next week.
A new report by the Paulson Institute, The Nature Conservancy (TNC) and World Wildlife Fund (WWF) estimates the annual shortfall at $1.317 trillion, up from $711 billion in 2020, raising concerns over the world’s ability to halt and reverse biodiversity loss by 2030.
Released on September 23, the report, titled *Financing Nature: A Mid-Decade Update*, draws on a broader assessment by BloombergNEF. While the estimated gap has increased by about 85 percent, changes in methodology and inflation mean the figures are not directly comparable.
The findings come as governments prepare for the 17th Conference of the Parties (COP17) to the UN Convention on Biological Diversity (CBD), scheduled for October 19–30 in Yerevan, Armenia.
The summit will conduct the first global review of collective progress under the Kunming-Montreal Global Biodiversity Framework, adopted in 2022, which sets 23 targets to be achieved by 2030.
With only four years remaining, the growing financing challenge has intensified scrutiny of government spending, environmentally harmful subsidies and the failure to direct sufficient public and private investment towards protecting ecosystems.
The report warns that financial flows contributing to biodiversity loss continue to outpace investments in conservation, threatening food security, livelihoods and economic stability.
Trillions spent damaging nature
The financing crisis is compounded by a striking imbalance in global spending, with governments and businesses continuing to direct trillions of dollars towards activities that undermine ecosystems.
According to the UN Environment Programme’s (UNEP) ‘State of Finance for Nature 2026’ report, financial flows harmful to nature reached $7.3 trillion in 2023, including $4.9 trillion in private investment and $2.4 trillion in environmentally harmful public subsidies.
The report found that approximately $30 flowed into nature-damaging activities for every dollar invested in nature-based solutions. Total investment in such solutions stood at $220 billion in 2023, with nearly 90 percent coming from public sources.
The figures highlight a fundamental contradiction in global economic policy: governments are committing to protect biodiversity while continuing to support activities that accelerate its destruction.
Environmentally harmful subsidies are particularly widespread in fossil fuels, agriculture, water, transport and construction.
Former US Treasury Secretary Henry M Paulson Jr, chairman of the Paulson Institute, called for urgent reforms to redirect financial resources towards conservation.
“No other single action would unlock more capital for nature than reforming those subsidies,” he said in a statement accompanying the new report.
The assessment urges governments to reform harmful incentives, strengthen environmental regulations and create conditions that encourage private investment in nature-positive activities.
$200bn finance target faces scrutiny
Under the Kunming-Montreal Global Biodiversity Framework, governments have committed to mobilising at least $200 billion annually from public and private sources for biodiversity conservation and sustainable use by 2030.
The commitment, outlined in Target 19, includes increasing international biodiversity finance for developing countries to at least $30 billion annually by 2030, with particular attention to least developed countries and small island developing states.
Separately, Target 18 requires countries to eliminate, phase out or reform incentives harmful to biodiversity, reducing them by at least $500 billion annually by 2030.
The two commitments address distinct but interconnected challenges: increasing investment in nature while reducing financial support for activities that damage it.
However, the latest financing assessment suggests that increasing conservation funding alone will be insufficient without wider changes in government budgets, financial regulations and investment policies.
The report identifies harmful subsidy reform, sustainable agriculture, improved financial incentives and greater private-sector participation as priorities for closing the gap.
It also highlights financing initiatives, including debt-for-nature arrangements and conservation investment mechanisms, which could be expanded to support biodiversity protection.
Rising food prices expose economic risks
The urgency of protecting nature has become increasingly evident as global food commodity prices climbed to their highest level since late 2022 in September 2026, putting additional pressure on households and economies already struggling with inflation.
According to the UN Food and Agriculture Organization (FAO), its Food Price Index averaged 136 points in September, rising 1.5 percent from August and 5.8 percent compared with the same month last year.
Cereal prices increased by 5.1 percent during the month, while sugar prices rose by 6.1 percent, largely reflecting adverse weather conditions, supply concerns and disruptions to international transportation.
FAO Chief Economist Maximo Torero warned that disruptions in the Strait of Hormuz and the Black Sea, combined with climate shocks, were putting increasing pressure on energy, transport and food commodity prices.
Although the latest food-price increases cannot be directly attributed to biodiversity loss, they underscore the vulnerability of global food systems to environmental and economic disruptions.
Healthy ecosystems support agricultural production through pollination, soil fertility, water regulation and natural pest control. Their degradation can weaken productivity, increase production risks and undermine the resilience of farming communities.
For developing countries, where millions depend directly on agriculture, fisheries and other nature-based livelihoods, biodiversity conservation is closely linked to food security, poverty reduction and economic stability.
The financing report identifies sustainable agriculture and resilient supply chains as important investment opportunities, arguing that protecting ecosystems can also strengthen long-term economic performance.
Finance ministers to meet in Armenia
Against this backdrop, finance ministers, central bank representatives and environmental leaders will gather in Armenia on October 26 to explore ways of bringing biodiversity into mainstream economic decision-making.
The high-level gathering, titled “The Future of Nature is Economic: Building Partnerships for Nature and Economic Prosperity,” will take place during Finance and Biodiversity Day at COP17.
It is being organised by the Coalition of Finance Ministers for Climate Action, the CBD Secretariat, Armenia’s environment and finance ministries, and UNEP.
The meeting will focus on strengthening cooperation between financial and environmental institutions, mobilising investment and developing economic policies that support conservation.
Participants will also explore the possibility of establishing an ongoing high-level dialogue to sustain cooperation and accelerate action on nature-related economic challenges.
A separate ministerial segment on “Fiscal Alignment for Nature and Development” is scheduled for October 27, from 4pm to 6pm local time.
Ministers and senior institutional leaders will discuss how national budgets, public investment and fiscal policies can support biodiversity objectives, including the implementation of national biodiversity strategies and action plans.
The discussions are also expected to explore ways of mobilising financial resources and strengthening the role of finance ministries in delivering conservation commitments.
Debt pressures present another challenge, particularly for developing countries struggling to balance conservation needs with spending on infrastructure, healthcare, education and climate adaptation.
Debt-for-nature arrangements, concessional finance and other innovative mechanisms could provide opportunities to increase conservation investment without placing excessive pressure on national budgets.
However, their effectiveness depends on appropriate financial conditions, credible conservation commitments and transparent implementation.
Critical test for 2030 targets
The Armenia summit comes at a decisive moment for international biodiversity policy, with governments expected to assess whether national commitments and implementation efforts are sufficient to meet the 2030 targets.
The first global review under the Kunming-Montreal framework will examine collective progress, identify implementation gaps and inform further action on conservation, restoration and resource mobilisation.
The financing discussions will also bring biodiversity into broader debates over economic governance, public expenditure, agricultural policy and sustainable development.
For developing countries, access to predictable international finance and stronger institutional capacity will remain essential to implementing national biodiversity commitments.
The challenge now extends beyond mobilising additional conservation funding to reforming the financial systems and economic incentives that continue to drive environmental degradation.
Governments have pledged to mobilise $200 billion annually for biodiversity while reducing harmful incentives by at least $500 billion a year by 2030. Yet trillions of dollars continue to flow into activities that undermine the ecosystems on which economies depend.
COP17 will provide an important test of whether governments are prepared to align national budgets, investment decisions and fiscal policies with those commitments.
With only four years remaining, the success of the global biodiversity framework will depend less on new promises than on measurable changes in how governments spend, invest and regulate.
