Today's Deep Dive is 1,430 words and a 9-minute read.
Last week, international participants closed out the sixteenth annual Conference of Parties (COP16) to the Convention on Biodiversity (CBD) in Cali, Colombia. At the top of the agenda ahead of the summit was updating rules around plant and animal DNA, or digital sequence information (DSI), digitally encoded and stored genetic information from plants and animals. DSI, which is a crucial component of scientific advancements in areas including pharmaceuticals, agriculture, and climate science, is at the core of a hotly contested international debate over who gets to utilize and profit from the world's biodiversity.
COP16, wrapping up in the early morning hours following the official final day of the summit, ultimately produced a much-anticipated decision for DSI in the landmark "Cali fund," which calls upon private sector users to share the benefits of using DSI with its country of origin. While still in early stages – and considered imperfect both by activists and industry – the decision is a landmark regulation for DSI, heralding a new norm for the use of digitized genetic information. The nonbinding decision will ask corporations to contribute 0.1-1% of profits resulting from DSI-derived products to countries of origin. While the US is not a party to the CBD or resulting agreements, the EU will likely explore implementing the mechanism, creating new risks and opportunities for multinationals.
What is DSI?
Debates around DSI start from the very top: DSI itself is popularly regarded as a placeholder term with no universally agreed-upon definition. Generally, DSI is understood to comprise plant and animal genetic information that has been digitally interpreted, encoded, and uploaded to online databases (disagreements center around the inclusion of RNA and other proteins). It is widely used by scientists in academia and industry for a variety of research and development purposes, utilizing inherent qualities from naturally occurring genetic material to develop new pharmaceuticals, perfect genetically-modified crops, and gain understanding about individual species or the makeup of ecosystems, among other uses.
One of its most widespread uses is in pharmaceuticals development, with thousands of drugs and medical technologies based on plant material. Today, studies are ongoing to use material from snowdrop flowers to treat Alzheimer's disease, or to use molecules in chestnut leaves to neutralize drug-resistant bacteria. DSI is also used to share disease sequences and enable broader work on vaccines and treatments; researchers identifying and uploading COVID-19 variant sequences, for example, enabled the global scientific community to quickly develop vaccines and boosters. In agricultural science, researchers may use genetic material from plants from other ecosystems to genetically modify an especially hardy wheat crop, or a salt-tolerant tomato variant. Additionally, environmental scientists make varied use of DSI, including by taking environmental samples in a given area and cross-referencing DNA present against entire DSI databases to identify what endangered plants or animals may be present.
The existence of DSI, and the debate around it, are the result of significant scientific advancement: until the last several years, scientists wishing to utilize organic genetic material would have to travel to natural sources to collect samples before incorporating it into new products or research. As genetic sequencing became easier and more widespread, academia has developed vast online libraries of DSI available for users anywhere in the world to access, synthesize, and utilize for any purpose – all without leaving the lab. The largest of these databases is the International Nucleotide Sequence Database, a collaboration between three major DSI libraries in Japan, Europe, and the US, and which is free for anyone to use.
As a result of these advancements, international consensus around regulating the use of this genetic material – and using the profits enabled by global biodiversity to conserve it - has grown.
The CBD and COP16's Proposed DSI Mechanism
The use of plant and animal genetic material for commercial purposes in general is governed by the Convention of Biological Diversity (CBD), a 1992 treaty that highlights benefit-sharing as one of three pillars of conserving biodiversity. The convention calls for sharing benefits derived from plants and animals with the countries and local communities where that biodiversity is found. Twenty years later, parties to the CBD made benefit-sharing more concrete with the 2012 Nagoya Protocol, which affirms that countries have the legal right to regulate physical access to plants and animals within their borders, and calls on nations to make sure that any biodiversity within their border that is used by the private or public sector is collected with the consent of the home country. Both the CBD and the Nagoya Protocol, which are entirely voluntary (and which the US has not ratified), have had a mixed record: while middle-income nations have had some success establishing legal systems to govern the use of plant and animal material, access in poorer nations has remained largely unregulated, and researchers have found that the protocol resulted in very few benefit-sharing payments. Most problematically for the current moment, neither the CBD nor the Nagoya Protocol acknowledge DSI at all, leaving the digital genetic information in regulatory limbo until now.
On Saturday, November 2, parties at COP16 in Cali, Colombia, finalized a long-debated DSI framework that outlines a benefit-sharing mechanism and brings DSI into the CBD's regulatory framework. The finalization of the deal is something of a diplomatic marvel, given that a draft document submitted at the start of the summit listed 311 unresolved issues and the final draft paper was published at 3:30 am on Saturday morning, as country delegates began to leave Cali to catch flights. Under the decision, pharmaceutical, cosmetics, agribusiness, nutraceutical and technology conglomerates that benefit from genetic data "should" contribute 1% of their profits, or 0.1% of their revenue, to the landmark "Cali fund" under the agreement. The Cali fund will be administered by the CBD COP, with profit payouts going to national governments via "direct allocations" and at least half of all benefits going to meet the "self-identified" needs of Indigenous communities in developing countries, particularly women and youth, although it concedes that this could be limited by "national circumstances." Only private companies will be called upon to share profits, while academic institutions will be permitted to continue using DSI freely; they will only be asked to include their country of origin in online DSI databases to provide credit and direct private sector users to the correct recipient of payments. Unlike the CBD, this framework – a "decision" in treaty parlance - is not legally binding, and explicitly does not supersede national law.
Implications for Business and Conservation
If successful, researchers estimate that the framework could raise hundreds of millions of dollars for conservation efforts, with at least half going to local and indigenous populations that are the most impacted by biodiversity loss (and some of the most efficient conservationists). The new plan is the only international tool to fund conservation that is almost entirely drawn from private sector money, and is seen by advocates as correcting a longstanding imbalance of power – biodiversity is overwhelmingly concentrated in impoverished countries who do not benefit from the scientific advancements achieved with DSI. Some advocates for lower-income countries have already protested the plan, saying it does not go far enough to compel the private sector to pay, given that the decision is essentially voluntary and allows companies to self-report whether DSI was used. Compliance will also likely be limited by the fact that the US is not a party to the treaty, exempting American companies from even voluntary participation. However, the EU is expected to adopt the decision and potentially incorporate it into its regulatory framework, providing opportunities for multinationals operating in Europe to engage.
Industry also has historically seen issues regulating the use of DSI, and some groups expressed disappointment with elements of the Cali fund decision over the weekend. Free access to DSI is a communal scientific good, enabling massive scientific advancements and life-saving discoveries (such as mRNA-based COVID-19 vaccines), and the private sector has long worried that imposing costs on accessing DSI could dampen already expensive R&D or slow scientific advancement. Additionally, regulating access to DSI poses technical problems that have not entirely been solved by the Cali fund decision: it is often difficult to attribute a new product to any single sequence, as researchers often draw lessons – if not copies of genetic sequences – from hundreds of different samples. As it stands, the private sector will likely have a long runway to assess how to become involved with the Cali fund – analysts have said that the fund is not expected to generate money for several years, and several technical elements (such as labeling countries of origin in DSI databases) have yet to be ironed out.
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