Every year at least $1.8 trillion is spent by world governments subsidizing the destruction of the environment, according to a new report.

Financial support across the energy, agriculture, and forestry industries, among others, is leading to the widespread loss of biodiversity and an acceleration of climate change. These environmentally harmful subsidies (EHS), or government actions, amount to a political will for self-destruction, the study warns.

The report, Protecting Nature by Reforming Environmentally Harmful Subsidies, details the financial backing governments have afforded such endeavors as mining in biodiverse locales, agriculture in the Amazon rainforest, and illegal logging.

“Some governments have chosen to prioritize the short-term social or economic benefits of subsidies over environmental harm, despite the fact that EHS are usually detrimental over the longer term to the economy, nature, and humankind,” Eva Zabey, executive director of Business for Nature, told The Weather Network (TWN).

Heads of delegations at the 2015 United Nations Climate Change Conference (COP21), which led to the signing of the Paris Agreement. (Presidency of the Mexican Republic/ CC BY 2.0)

The environmentally destructive investments include as much as $640 billion for the fossil fuel industry, $520 billion for agriculture, $155 billion for forestry, and $50 billion for marine capture fisheries. Collectively, the subsidies total 2 per cent of global GDP.

“At least $1.8 trillion is funding the destruction of nature and changing our climate,” stated Christiana Figueres, former executive secretary of the UN climate change convention. She emphasized the importance of these findings, adding, “We have never lived on a planet with so little biodiversity.”

Related research has helped to show the deleterious effects of such subsidies. The billions of dollars awarded to the fossil fuel industry represent a disregard of the latest study from the IPCC warning of the “rapidly closing window” to curb carbon emissions.

Heavily subsidized soy and beef production are a serious cause of rainforest loss in the Amazon; while the well-funded mining industry operates in the most ecologically diverse biomes in the world.

“The World Economic Forum ranks biodiversity loss, climate action failure, and extreme weather as the top three threats facing humanity,” Zabey said. “This is fuelled in part by the flow of subsidies to environmentally harmful and unsustainable practices.”

This examination of subsidies is the first such effort since the 2010 UN Convention on Biological Diversity, when 190 nations pledged to reform or eliminate environmentally harmful subsidies. That pledge was not kept.

The impetus behind the subsidies is economic, the pursuit of short-term stability in industries often at the mercy of boom-bust cycles or nature’s whims. Some subsidies ensure more security and better livelihoods for workers.

But environmentally harmful subsidies may have diminishing returns or simply be bad economics. Gasoline subsidies have been found to encourage wasteful consumption of the fuel; illegally logged timber reduces market value; and several grocery chains have considered no longer selling beef from rainforest-converted land.

“Nature’s value is not accounted for in our economic system, yet over half of global GDP is moderately or highly dependent on nature,” Zabey said. “Continuing to finance subsidies that harm nature poses a clear threat to businesses and the global economy, which is cause for serious concern.”

More to the point, it was found that in many cases the subsidies offer support largely to those in least need. The World Bank found that only 6 per cent of water subsidies help the poorest 20 per cent of the population, with the wealthiest 20 per cent receiving the benefits of 56 per cent of subsidies.

A review of subsidies provided to the Indonesian palm oil industry determined that less than 1 per cent went to smallholder farms, with almost 90 per cent going to the 15 largest producers.

With over half of the world’s GDP dependent on nature, redirecting the flow of subsidies that are environmentally sustainable, as well as fairly distributed, seems essential to long term economic prosperity.

“This new research shows it’s time to change course: we must set nature on the road to recovery,” said Marco Lambertini, director general of World Wildlife Fund International.

“It is more important than ever to put in place ambitious targets to reverse nature loss and to redirect, repurpose or eliminate all subsidies that harm our natural world to protect people and the planet.”

This report is an important step to alerting those behind even the most well-intentioned of subsidies to the unintended effects of the system.

“Bringing transparency to subsidy flows and understanding their full impacts, both positive and negative,” Zabey stated, “has never been more critical.”

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