The world is spending at least $1.8tn (£1.3tn) every year on subsidies driving the annihilation of wildlife and a rise in global heating, according to a new study, prompting warnings that humanity is financing its own extinction.

From tax breaks for beef production in the Amazon to financial support for unsustainable groundwater pumping in the Middle East, billions of pounds of government spending and other subsidies are harming the environment, says the first cross-sector assessment for more than a decade.

This government support, equivalent to 2% of global GDP, is directly working against the goals of the Paris agreement and draft targets on reversing biodiversity loss, the research on explicit subsidies found, effectively financing water pollution, land subsidence and deforestation with state money.
Lack of transparency between governments and recipients means the true figure is likely to be much higher, as is the implicit cost of harmful subsidies. Last year, an International Monetary Fund report found the fossil fuel industry benefited from subsidies worth $5.9tn in 2020, but the vast majority of this figure comes from the hidden costs of failing to make polluters pay for the deaths they cause and global heating.

“Subsidy reform allows us to improve the price signals so that we are not protecting income in more polluting industries,” said Doug Koplow, founder of the organisation Earth Track, which monitors environmentally harmful subsidies, and co-author of the report, along with Ronald Steenblik, the Organisation for Economic Co-operation and Development’s former special counsellor for fossil fuel subsidy reform. “It creates space for alternative and cleaner forms of energy to enter the marketplace.”
A draft target in the UN biodiversity agreement for this decade calls for $500bn a year in subsidies to be reformed, but The B Team and Business for Nature, which supported the research, have said this must be strengthened. The world has never met a target on halting biodiversity loss, and the failure to act on subsidies was highlighted as a major issue from last decade’s targets.

The authors, who are leading subsidies experts, say a significant portion of the $1.8tn could be repurposed to support policies that are beneficial for nature and a transition to net zero, amid growing political division about the cost of decarbonising the global economy.

The report calls for governments to agree a target to eradicate environmentally harmful subsidies by the end of the decade at the biodiversity Cop15 gathering in China later this year, where it is hoped a “Paris agreement for nature” will be signed, and for companies to reveal the subsidies they receive as part of environmental disclosure reporting. READ FURTHER FROM the source above