LONDON: Governments are subsidising the destruction of the earth’s ecosystems by companies to the tune of US$1.8 trillion annually, according to research commissioned by The B Team and Business for Nature.
The first study in over a decade to put a value on environmentally harmful subsidies (EHS), finds the fossil fuel, agriculture and water industries receive US$1.5 trillion a year to maintain unsustainable levels of production and consumption.
Other subsidised sectors include forestry (US$155 billion); construction, (US$90 billion); transport (US$85 billion); and marine capture fisheries (US$50 billion).
The report describes how redirecting, repurposing, or eliminating subsidies would help unlock the US$711 billion required each year to halt and reverse biodiversity loss by 2030, as well as the cost of reaching net-zero emissions.
The total value of EHS is likely to be higher than US$1.8 trillion because of a lack of transparency between governments and recipients, adds the study, thereby creating major risks for businesses and investors by distorting investment patterns and industry cost structures, masking operating or accident risks, and creating competitive barriers to environmental improvements.
Despite committing over a decade ago to phase out or reform harmful subsidies, governments of 190 countries have failed to do so. And while 141 world leaders pledged to “halt and reverse forest loss and land degradation by 2030” at the UNFCCC COP26 last year, US$155 billion is still spent on subsidizing unsustainable forest management - encouraging deforestation, a loss of carbon sequestration, and biodiversity loss.
Commenting on the results, former Unilever CEO and co-author of ‘Net Positive’ Paul Polman declared: “Few are aware of the US$1.8 trillion in perverse subsidies dished out by governments globally, which drive environmental degradation, poverty and soon will be the biggest single driver of climate change.
“We’re often told there’s no money to tackle these problems. Yet just a third of the money could be redirected towards making our food system sustainable – the same food system which is otherwise responsible for a third of all greenhouse gas emissions.”
With the UN Convention on Biological Diversity COP15 scheduled to resume March 13-29, The B Team and Business for Nature want the US$500 billion per year target on subsidy reform in the current draft Global Biodiversity Framework (GBF) to reflect its latest research, and commit governments to eliminate all environmentally harmful subsidies by 2030.
“Subsidies perpetuate a broken system and perverse incentives,” declared founder and president of the Virgin Foundation Jean Oelwang. “It is absurd that we continue to subsidise the destruction of the planet, and in turn our own destruction. We have an opportunity to courageously join forces to shape a smart transition that will incentivise clean energy and the protection of nature.”
Story Type: News