Researchers are warning that people are funding their own extinction with at least $1.8 billion spent every year on subsidies that cause wildlife to be wiped out and climate change to rise, according to a new study.
The first cross-sector assessment in over a decade documents how government spending and subsidies are harming the environment. These subsidies range from tax breaks and grants for beef production in the Amazon to funding for unsustainable groundwater pumping in the Middle East.
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According to the research on explicit subsidies, the 2 per cent of global GDP government support is directly working against the goals of the Paris agreement and draft targets on reversing biodiversity loss. In other words, the government is effectively funding pollution, land subsidence, and deforestation with state funds.
The report urges governments to agree to eliminate environmentally harmful subsidies by the end of the decade. Furthermore, it calls for companies to reveal the subsidies they receive as part of their environmental disclosure reporting.
Amid growing political division on the cost of decarbonising the global economy, the authors suggest repurposing an important part of the $1.8tn to support policies that benefit nature and transition to net zero.
Christiana Figueres, who headed the United Nations climate change convention when the Paris agreement was signed, praised the research. According to her, subsidies created huge risks for businesses that received them.
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We have never lived on a planet with so little biodiversity, she said, and nature is declining at an alarming rate. We must reorient harmful subsidies toward protecting nature and the climate, rather than funding our own extinction, she added.
There are four industries that account for most of the $1.8tn, according to the report: fossil fuels ($620bn), agriculture ($520bn), water ($320bn) and forestry ($155bn). There was no estimate for mining, which is said to cause ecosystems billions of dollars in damage every year.
The true cost of subsidies is likely to be much higher due to the lack of transparency between governments and recipients. The International Monetary Fund said last year that fossil fuel companies received subsidies worth more than $5.9 trillion in 2020, but this figure largely reflects hidden costs from failing to hold polluters accountable for their deaths and global warming.
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According to a UN report last year, close to 90 per cent of the subsidies given to farmers every year are harmful, damaging people’s health, causing climate change, and destroying nature while increasing inequality by excluding smallhold farmers.
The UN’s biodiversity chief, Elizabeth Mrema, said the report was critical.
She states that the report highlights how redirecting, repurposing, or eliminating subsidies could make a significant contribution to halting and reversing the loss of nature by 2030 as well as reducing the cost of achieving net zero emissions.
