Biodiversity

Current rates of global biodiversity loss are unprecedented and pose a serious threat to the achievement of the Agenda 2030. Green fiscal policies – reform of harmful incentives and biodiversity-relevant taxes, fees and charges – can address many of the market failures which drive such biodiversity loss by reducing and reforming subsidies and incentives that encourage unsustainable land management practices, high levels of pollution and inefficient resource use.

Biodiversity loss and extinctions have been more rapid in the past 50 years than in any other time in human history; the safe operating space of the planetary boundary relating to loss of biosphere integrity has been overstepped more than any other (Stockholm Resilience Centre 2020). The Food and Agriculture Organisation (FAO) has warned that the rapid decline of key species and ecosystems is posing an increasing threat to food and agricultural production (FAO 2019). Current negative trends in biodiversity and ecosystems will undermine progress towards 80% of SDG targets related to poverty (SDG 1), hunger (SDG 2), health (SDG 3), water (SDG 6), cities (SDG 11), climate (SDG 13), oceans (SDG 14) and land (SDG 15) (IPBES 2019). Aichi Biodiversity Target 3, which calls on countries to eliminate incentives harmful to biodiversity by 2020, will not be met.

Green fiscal policies can address many drivers of biodiversity loss by reducing and reforming subsidies and incentives that encourage unsustainable land management practices, land use change, deforestation, pollution due to fossil fuels, industrial processes, fertilisers and pesticides, and inefficient resource use. Green fiscal policies can put a price on ecological services and price pollutants and resources commensurate to their negative impacts on biodiversity. In this way, green fiscal policies create incentive mechanisms that foster sustainable practices in the forestry, fisheries and agricultural sectors, protecting both biodiversity and livelihoods dependent on natural resources and ecological services. These efforts can be complemented by green budgetary policies to integrate ecological indicators in policymaking and incentivize measures to safeguard biodiversity at all levels of government.

In parallel, green fiscal policies can free up financial resources through subsidy reform and raise additional revenue through taxes, charges and fees, such as entry fees for national parks or fees on tourism. These revenues can be used for biodiversity protection and conservation, and to manage national and marine parks. Revenue-raising is an important co-benefit of green fiscal policy, as biodiversity finance is limited and covers only one third of financing needs (Parker et al. 2012).
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