Trillions in Oil and Farm Subsidies Are Causing “Environmental Havoc” - Mother Jones

Trillions of dollars of subsidies for fossil fuels, farming, and fishing are causing “environmental havoc,” according to the World Bank, severely harming people and the planet.

Many countries spend more on harmful subsidies than they do on health, education or poverty reduction, the bank says, and the subsidies are entrenched and hard to reform as the greatest beneficiaries tend to be rich and powerful.

Reforming subsidies would provide vital funding to fight the climate and nature crises at a time when public coffers are severely stretched, the bank says. The “toxic” subsidies total at least $7.25 trillion a year, according to a major new report from the bank. The explicit subsidies—money spent by governments—account for about $1.25 trillion a year, or more than $2 million a minute. Most of these are harmful, the bank says.

There are also implicit subsidies such as waived taxes and the cost of the damage caused by worsening global heating and air pollution. These total $6 trillion a year, according to the World Bank, although a higher recent estimate that includes the costs of pollution and destruction of nature by farming pushes the figure to almost $11 trillion a year.

In total, the subsidies supporting environmental destruction could amount to $23 million a minute. The bank said the estimates were conservative, as some countries did not fully record subsidies and they had risen since the Covid pandemic and had yet to be fully counted.

The bank also said the bulk of the subsidies were regressive, benefiting the rich more than the poor, and that direct aid to the poorest would be far more efficient.

In 2021, UN agencies reported that almost 90 percent of agricultural subsidies harmed people’s health and the climate, and drove inequality, while the IMF found that trillions of dollars of fossil fuel subsidies were “adding fuel to the fire” of the climate crisis at a time when rapid cuts in carbon emissions were needed.

The World Bank report, titled Detox Development, says the subsidies are “driving the degradation of the world’s foundational natural assets—clean air, land, and oceans—[which] are critical for human health and nutrition.”

Fossil fuels are “vastly underpriced,” the report says, while subsidy reforms “save lives.” Pollution from fossil fuels causes 8.7m deaths a year, according to a 2021 study, one in five of all deaths globally.

Subsidies for agriculture are “unequal and unwise,” the report says. “Not only do these subsidies promote inefficiencies, but they also cause much environmental havoc.” The report found that subsidized fertilizer caused so much overuse in some regions that it reduced crop yields, while also causing huge nitrogen pollution.

It also found farm subsidies were responsible for the destruction of 5.4 million acres of forest a year, about 14 percent of global deforestation, which leads to almost 4 million extra cases of malaria a year. Fishing subsidies amount to about $118 billion a year and are a key factor in the over-exploitation of marine life, which has sent the oceans into “a collective state of crisis,” according to the report.

The report says: “Although [subsidy reforms] will entail demanding policy reforms, the costs of inaction will be far higher.”

Read the full story here

Mother Jones

Organizations: World Bank International Monetary Fund (IMF) United Nations 

Tags: Environmentalism Climate Change Deforestation Ocean Farming Pollution Fossil Fuel 

Type: Headlines