Can the repurposing of environmental harmful subsidies be an unexpected success?

Growing evidence shows well-intended subsidies aimed at socio-economic goals can have unintended negative and costly impacts on the environment. On 26 February, on the margins of the sixth session of the United Nations Environment Assembly, the Biodiversity Finance Initiative (BIOFIN) of the United Nations Development Programme (UNDP) organized a session titled "The Nature of Subsidies: Repurposing Subsidies for an Inclusive and Sustainable Future". Renowned speakers shared their experiences in identifying and greening harmful subsidies.

The volume of harmful subsidies to nature is estimated at over US$ 500 billion per year, exceeding the estimated public investment in nature of US$150 billion per year. This financial gap leads to habitat destruction, soil degradation, biodiversity loss, increased emissions and pollution, and growing impacts on communities and economies.

A diverse coalition of partners is working in countries and around the world to address this problem. UNDP-BIOFIN has researched global best practices for redesigning subsidies and summarized them in a guide entitled “The Nature of Subsidies: A step-by-step guide to repurpose subsidies harmful to biodiversity and improve their impact on people and nature” This guide empowers countries to identify harmful subsidies and transform them into nature-positive initiatives.

Rebecca Pow MP, Parliamentary Under-Secretary of State for Nature (Minister for Nature) in the United Kingdom, emphasized the benefits of the guide for all countries: “Repurposing subsidies has always been a very tricky thing to address, but with the BIOFIN guide, governments will now see a clear way through.” She is convinced that the guide will be instrumental in achieving global biodiversity goals. Minister Pow further elaborated on her country’s initiatives stating, “We believe that farming and nature must go hand in hand when repurposing subsidies. Previously, farmers received support merely for having land; now, we incentivize positive environmental actions alongside sustainable food production. We codesign subsidies and schemes with our farmers.”

Haoliang Xu, Under-Secretary-General and Associate Administrator of the United Nations Development Programme (UNDP), stressed the need to ensure that economic incentives help reverse, not exacerbate, planetary crises while creating sustainable jobs and livelihoods for communities.

Maria Teresa Becerra, Chief of the International Relations Office at the Environment Ministry, shared Colombia's experience in redesigning harmful subsidies, emphasizing the crucial role of cooperation between different stakeholders. “It is important that we all - the private sector, farmers, associations, research institutes and local communities - are more involved. In Colombia, we are developing new nature positive financing mechanisms involving all stakeholders", – she said. Colombia will host the upcoming 16th meeting of the Conference of the Parties (COP) to Biodiversity Convention (October 2024). 

David Laborde, Director of the Agrifood Economics and Policy Division (ESA), FAO, highlighted the need to mitigate social impacts for a successful redesign of harmful subsidies. “In agriculture and fisheries, we have many subsidies that solved the problems of the past for a while, but now lag behind in terms of an integrated vision to address the problems of the present and future. We need to evaluate incentives and subsidies more comprehensively, identifying how they can be redesigned with more positive impact,” he said. 

“The repurposing of environmental subsidies can be an unexpected success of the coming decade," reflected Ms. Pickup at the closing of the event.  

Explore further:

• Watch the video recording of the session in English, French, Spanish and Russian.
• Download the BIOFIN step-by-step guide on repurposing harmful subsidies.
• Watch the BIOFIN video on harmful subsidies: English, French, Spanish, Russian