Intensive food
production
is the leading cause of biodiversity loss and regularly results in a host of negative economic and social changes including loss of livelihoods for vulnerable groups, loss of traditional knowledge and practices, destruction of community infrastructure, and even environmental migration. Still, year after year, governments continue to financially prop up industrial or extensive agriculture.
Although declining slightly in some sectors, the overall level of subsidies remains remarkably high. Leaving aside conceptual and data deficiencies of global estimates for most sectors, conservative estimates point to hundreds of billions of dollars in annual subsidies. According to the
OECD
, government spending on subsidies to industries that cause harm to biodiversity is at least five times higher than total spending to protect biodiversity. In 2019, subsidies for drivers of biodiversity loss totaled an estimated $273 to $542 billion.
Important modifications to production patterns and supply chains - as well as to consumption habits - are vital if efforts to stop biodiversity loss are to be successful and sustainable. Foremost in this process is the immediate redirection of subsidies for drivers of biodiversity loss. Yes, some governments are still giving financial support to intensive agriculture, livestock production, and fishing, when they could be using that money to finance a transition to biodiversity-friendly industries and initiatives.
There are a wide range of government subsidies besides those given to agriculture, forestry and fishing. For example, those received by the fossil fuel, water, construction, transport, and housing sectors, which also incentivize biodiversity loss. A
2022 study by The B Team and Business for Nature
provides a comprehensive estimate of such subsidies and the figure is striking: the world spends at least US$1.8 trillion a year –equal to 2% of global GDP– on subsidies (public money) that are encouraging the depletion of biodiversity.
Phasing out subsidies will free up funds that can be redirected to support biodiversity and ecosystem services. Policymakers already have a range of analytical tools to help them identify subsidies for initiatives that could provide sustainable, equitable, biodiversity conservation measures. At the global level, this could include the removal of capacity-enhancing or effort-enhancing fisheries subsidies, and the continued and deepened reform of subsidies for industrial agriculture that are still prevalent in most OECD countries.
The last two decades have seen efforts to phase out or reform subsidies in various countries. For instance,
Costa Rica
has redirected cattle subsidies towards paying farmers and landowners to provide ecosystem services such as carbon sequestration and watershed protection.
These experiences
indicate that subsidy reform or removal can alleviate environmental pressures, increase economic efficiency, and reduce the fiscal burden. It has also become clear that transparency and accountability measures are key preconditions for a well-informed public debate on subsidy programmes, and for protecting against various forms of corruption.
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