Protecting Nature by Reforming Environmentally Harmful Subsidies: An update

This report updates our 2022 analysis on environmentally harmful subsidies (EHS). The Kunming-Montreal Global Biodiversity Framework (GBF) was adopted in December 2022 to protect and restore nature. Our initial review of global environmentally harmful subsidies (EHS) two years ago incorporated multiple sectors affecting resource extraction and land-use change because it is the combined effect that is driving loss of nature and biodiversity resources. International analysis of subsidies is too often focused on a single sector. We continue to use a multi-sector approach here, and have expanded it where possible. The update report estimates current environmentally harmful subsidies at least $2.6 trillion, equivalent to 2.5% of global GDP. This is about $800 billion higher than two years ago, or roughly $570 billion higher net of inflation. A combination of improved data -- including the inclusion of estimates for non-energy mining and plastics production for the first time, inflation, and rising subsidies particularly to fossil fuels was behind the increase. Major data gaps in the water and forestry sectors remain, despite much effort to identify new research. Achieving the GBF targets for EHS reporting by 2025 and reforms of at least $500 billion/year by 2030 will be challenging. Targets 18.1 (environmentally-positive subsidies) and 18.2 (reductions in EHS) provide the main frameworks to measure progress. However, methodologies are still evolving, vary by region, and suffer significant data capture challenges. The analysis suggests approaches to speed development of reporting frameworks and ensure there aren't significant blind spots in the information on EHS that is captured.