Explained | UN summit will debate rules for genetic information but what does that mean?

Countries are expected to reach a deal at this month's UN COP16 nature summit on how the world uses and pays for genetic information extracted from nature, according to negotiators.

Experts refer to this data as "digital sequence information," or DSI for short. Here is what you need to know about the talks:

Why discuss genetic information at a Nature summit?

The unique genetic codes and sequences in all living organisms hold the information needed for them to develop and function. For years, researchers have been tapping the genetic codes of plants, animals and microbes in search of new compounds that can be used in pharmaceuticals, cosmetics or other commercial purposes.

Species-rich countries, including tropical giants like Brazil and India, are on guard against corporations and researchers capitalizing on their biodiversity without offering compensation or royalties to the country where a species originated.

In response, a complex system of laws has cropped up to govern the use of genetic material. The laws vary widely from country to country, posing headaches for companies and complicating the sharing of biological material for research. This system has also generated little money for developing nations.

At COP16, countries are aiming to create a single, multilateral system focused on generating revenues for conservation from the use of DSI.

Why is it called 'digital sequence information' (DSI)?

Advancing technologies allow scientists now to sequence entire genomes of living organisms within just hours or days - work that a few decades ago would have taken years.

These genetic sequences are digitized and often uploaded to public databases where they are stored for any researcher to use.

The COP16 talks are focusing on how this digital information is used and do not touch on the actual samples and specimens.

Why is DSI important to companies?

While humans have capitalized on nature for millennia - for example in using plants as medicine - research using digital genetic information marks the latest frontier in bioprospecting, and a vital part of product development for industries like pharmaceuticals, cosmetics, agriculture and advanced lab technologies.

Even stone-washed denim jeans get their streaked quality from nature - specifically from enzymes developed from microbes found in super salty soda lakes.

Companies might sift through tens of thousands, or even millions, of genetic sequences in creating medical treatments such as the COVID-19 vaccines or new food options like nutrient-rich rice.

The primary sectors linked to DSI generate $1.6 trillion annually in revenues, although that includes sales of these companies' products that have nothing to do with genetic information, according to a study commissioned by the UN Convention on Biological Diversity's secretariat.

Companies hope a deal would give them a straightforward way to pay for using DSI and put their products developed as a result on firmer legal standing.

What might a deal at COP16 look like?

Negotiators are debating several key questions: who should pay for using DSI, how much they should pay, and how should the proceeds be used.

While a variety of options are on the table, one simplified approach would likely involve charging certain sectors like pharmaceuticals a percentage of their revenue or profit to use DSI databases, rather than paying a la carte for only what they use.

A deal would also aim to determine how DSI revenues would be distributed for use in nature conservation. The options being discussed range from giving the money to countries directly to establishing a system for individual conservation projects to apply for funding.

DSI is also used by nonprofit universities and institutes seeking to advance scientific knowledge and conservation of nature. Experts argue that any deal must ensure free access for non-profit research that benefits humanity.

How much money could this deal generate?

A UN-commissioned study published in July estimated that a charge of between 0.1% to 1% on annual revenues in key sectors using DSI could generate between $1 billion and $10 billion annually.

According to the negotiations so far, that money would likely be earmarked for conservation initiatives or to support poorer nations in developing their own genetic research.

With any deal struck at COP16, it would be up to each country to implement the rules at a national level as only they can force industries to pay. That implementation process can take years.

A DSI payment system that allows companies to opt-in voluntarily could get off the ground more quickly, for example, allowing companies to use DSI at an agreed rate of payment.