Reform $2.6 trillion yearly environmentally harmful subsidies to deliver a nature-positive economy

Environmentally harmful subsidies (EHS) are subsidies or incentives that unintentionally encourage unsustainable production or carbon-intensive consumption, the depletion of natural resources, or the degradation of global ecosystems.

The world is committed

In Target 18 of the Global Biodiversity Framework (GBF), also called Biodiversity Plan, governments committed to identify all EHS by 2025 and to reform them by 2030, including by increasing positive incentives. 

But progress has been slow: The scale of the problem

Updated research shows that in 2024, $2.6 trillion is being spent per year on EHS. This is equivalent to 2.5% of the global GDP. These estimates have increased by $800 billion since 2022. Radical action and collaboration is needed.

“Despite 196 governments agreeing to reform harmful subsidies in 2022, progress has been too slow. We’re spending more than ever on subsidies that are unintentionally destroying the planet on which all our livelihoods and economies depend. With COP16 fast approaching, it’s time for governments to ditch these harmful subsidies and redirect them to accelerate the transition to a nature-positive economy for all. Businesses have an important role to play, starting by assessing their dependencies and actively supporting governments in their reform efforts. ”

— Eva Zabey, CEO, Business for Nature

Read our financing our survival 2024 report addendum

The benefits of EHS reform

While subsidy reform is a complex challenge, it presents a wealth of opportunities for governments, businesses and investors, which can lead to resilient economies.

EHS distorts market prices, resource allocation and investment decisions, contributes to unfair competition, creates reputational risks and ultimately prevents leading companies from meeting their own nature commitments. 

Government leadership is urgently needed

EHS is a major barrier to corporate action as our economic system continues to promote short-term profit over long-term value creation, and to incentivize and reward businesses that over-exploit nature instead of supporting a transition to sustainable practices and the creation of positive environmental impacts.

To support governments in this challenging reform process, Business for Nature has outlined the steps governments should take to reform harmful subsidies.

read our target 18 recommendations

A growing call from the private sector in favor of EHS reform

Investors and businesses have also started to take a stance and support the reform of EHS:

Financial institutions representing total assets under management of $7.2 trillion called on G20 ministers to repurpose their agricultural subsidies.

260 companies, representing over $1.6 trillion in global annual revenue, urged governments to ramp up clean energy and phase out fossil fuels.

180+ companies, representing combined revenues of $1.2 trillion are calling on governments to align all financial flow to nature-positive outcomes.

Businesses also have a role to play in understanding their own dependencies on EHS and to collaborate with governments to ensure successful reforms.