The EU could be investing tens of billions of euros each year into activities that damage biodiversity, according to a new report from WWF.
With biodiversity declining at an unprecedented rate around the world, the EU intends to put nature on a “path to recovery” by 2030, in line with global goals.
Finance is a key part of this and the bloc has pledged to raise at least €20bn in nature funding each year by the end of the decade.
However, a new report estimates that EU countries could be spending between €34-48bn each year on projects that can end up damaging biodiversity in sectors such as agriculture, forestry and fisheries.
It is “pretty shocking” to see the potential scale of funding that EU countries are “pouring into harmful practices”, the lead author of the report tells Carbon Brief.
A policy expert, who was not involved in the report, says the findings may increase pressure on the EU to track its harmful subsidies, but criticised some of what the report counted as ‘“harmful”.
Tackling harmful subsidies
There is no standard definition for “biodiversity-harmful subsidies”, but, essentially, they are government incentives that supplement income or lower costs for certain activities that end up damaging biodiversity.
Agriculture, fishery and energy subsidies are most commonly termed “harmful”, but damage can also be caused by subsidies for other sectors, including forestry, infrastructure, transport, construction and water.
Subsidies that harm nature and the environment cost the world around $1.8tn each year, according to a 2022 report from two coalition industry groups – equivalent to the entire GDP of Canada.
There are a number of global goals in place to reduce these harmful subsidies.
The Kunming-Montreal Global Biodiversity Framework, the global deal for nature signed at the UN COP15 biodiversity summit in 2022, includes a target to cut biodiversity-harming incentives, including subsidies, by at least $500bn per year by 2030. The target also aims to identify such incentives by 2025, although the EU has so far not done so.
The new analysis finds that the EU is allocating between €34-48bn every year to subsidise activities that harm biodiversity. The table below shows the upper and lower estimates for each sector examined.
| Sector | Lower estimate of biodiversity harmful subsidies (€) | Upper estimate of biodiversity harmful subsidies (€) |
|---|---|---|
| Agriculture and forestry | 31.35bn | 32.57bn |
| Fisheries | 60m | 140m |
| Transport infrastructure | 1.69bn | 14.07bn |
| Water | 1.33bn | 2.09bn |
| Total | 34.43bn | 48.87bn |
This largest proportion of funding comes from the Common Agricultural Policy (CAP), the EU’s farming-subsidy programme, which accounts for almost one-third of the bloc’s total budget. (See “agricultural impact” below.)
The subsidies include funds that support “unsustainable” farming, land-use changes, river fragmentation and deforestation, according to the report. It adds that these activities can have knock-on effects on biodiversity, including habitat loss, ecosystem degradation and species extinction.
Prof Alan Matthews, a European agricultural policy expert at Trinity College Dublin, says the findings start a “good debate” about measuring these subsidies. He tells Carbon Brief:
“I see the report as contributing to the pressure on the EU…to actually come up with its own identification of what the subsidies are, so that they can begin then in the next few years to actually reduce them.”
Direct links
The study, conducted by the Netherlands-based economics consultancy Trinomics for WWF, looks at the biodiversity-harming elements of the EU’s long-term budget, the 2021-27 Multiannual Financial Framework.
It focuses on direct financing for the agricultural, forestry, fishery, transport and water sectors that may be damaging to biodiversity. This financing includes grants, loans and direct payments.
It does not look at indirect subsidies, such as tax breaks, or infrastructure investments that disproportionately benefit certain industries, such as tax reductions on fertilisers.
Tycho Vandermaesen, the policy and strategy director at WWF EU and lead author of the report, says there is an overlap between subsidies that damage biodiversity and those that exacerbate climate change, such as fossil fuel subsidies. But the climate impacts were not examined in the report. He says:
“We have taken a very conscious choice here to only look at biodiversity-harmful subsidies because this is one of the most under-highlighted environmentally harmful subsidies – in contrast to climate or fossil-fuel subsidies, which have by now been well researched.”
Matthews notes that the overall findings of the report are in line with previous research, but he criticises some parts of the methodology, such as including a very wide range of direct payments for farmers, as potentially harmful.
In response, Vandermaesen says the assumption on the harmful nature of direct payments for farmers is based on findings in existing studies.
On Monday, the EU Council approved a targeted review of the CAP to assess, among other things, plans to give farmers “greater flexibility” to comply with environmental terms for their direct payments.
The report is clear that there are uncertainties and a lack of up-to-date information on EU spending in some sectors. It says the findings are estimates and that more comprehensive analysis would be required to fully measure these subsidies.
Agricultural impact
Agriculture and forestry receive the most funding for biodiversity-damaging activities out of any sector examined in the report, as shown in the chart below.
The report notes that several EU funds “allocate money in a way that encourages large-scale unsustainable farming or forestry practices”.
These include direct farmer payments based on farm size, which can incentivise boosting industrial livestock numbers and expanding conventional crop production – “both of which harm the environment”, according to the report.
It estimates that around 60% of CAP funding – meaning more than €30bn each year – can be considered harmful to biodiversity.
The current CAP plan, which took effect in 2023 and will remain until 2027, included more environmental measures than previous iterations of the policy. But critics told Carbon Brief in 2021 that the plan was riddled with “loopholes” and unlikely to bring significant change to the sector.
Agriculture accounts for more than 10% of the EU’s greenhouse gas emissions. Globally, the sector is also a key driver of forest loss, causing 80% of deforestation as forest lands are cleared to make space for livestock, palm oil and soya beans.
Looking at other sectors, the report outlines that 5-12% of the European Maritime, Fisheries and Aquaculture Fund – a fishery funding programme – is put towards biodiversity-harmful subsidies.
This is up to 2.5 times higher than the money from this fund aiming to protect and restore biodiversity, the report says.
The report says it is “challenging” to accurately estimate the impact that building transport infrastructure can have on biodiversity, noting that it can fragment habitats and ecosystems. It estimates that the EU spends anywhere between €1.7bn and €14bn each year on roads, railways and other transport infrastructure that could be harmful to biodiversity.
Funds used for certain water infrastructure, such as flood control dams, could also harm biodiversity, the research notes.
Making changes
The report contains a number of recommendations to put an end to these subsidies, including implementing a legally binding framework to phase out biodiversity-harmful subsidies on both EU and national levels. It adds:
“Inclusiveness and social awareness need to be included in the phase-out of biodiversity-harmful subsidies to avoid regions or industries being left behind or struggling with the transition.”
Vandermaesen says that consulting with the impacted sectors and giving a clear pathway to diverting these subsidies is a “really important” step. He adds:
“We do not want to see a situation where, from one day to the next, these subsidies are basically stopped without the involvement of these communities.”
The report recommends diverting the funding instead for public investments to protect and restore ecosystems and to put in place “ambitious” national biodiversity plans ahead of the COP16 biodiversity summit, which is scheduled to be hosted by Colombia later this year.
WWF recently asked European political parties whether they would commit to redirecting fossil fuel and other environmentally harmful subsidies towards the “green transition”. All parties that responded expressed a readiness to redirect these subsidies, but the NGO says that “only a few have committed to enshrining this redirection into law”.
The subsidies report includes a number of case studies of nature-harming subsidies across Europe.
A forest recovery plan in France, financed partly by the EU, has had “adverse effects” on forests, the report outlines. Almost nine out of 10 projects financed by the plan in 2021 and 2022 involved clearcutting of trees, which can weaken ecosystems.
The report details another example in Bulgaria, where farmers were permitted to let animals graze in areas of the country’s national parks to help preserve open areas.
This led to “vegetation being trampled, water being polluted and wildlife being disturbed”, the report says. To mitigate these effects, park administrations requested €760,000 from the country’s EU-funded environment programme.
These examples “illustrate how complex it can be actually on the ground to deliver these positive results”, Matthews says, adding:
“In quite a number of the case studies, actually the subsidies were intended to be positive for biodiversity. But it seems that the way they were implemented…They had these sort of perverse outcomes.”
The post EU spending up to €48bn on nature-harming activities each year, report says appeared first on Carbon Brief.
EU spending up to €48bn on nature-harming activities each year, report says
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Revealed: Scientists tell Colombia fossil-fuel transition summit to ‘halt new expansion’
Countries attending a first-of-its-kind fossil-fuel summit have been asked to consider “action recommendations” such as “halting all new fossil-fuel expansion” and “reject[ing] gas as a bridging fuel”, according to a preliminary scientific report seen by Carbon Brief.
Around 50 nations will gather in Santa Marta, Colombia from 24-29 April to debate ways to “transition away” from fossil fuels, in the face of worsening climate change and sky-high oil prices.
The talks come after a large group of nations campaigned for, but ultimately failed, to get all countries to formally agree to a “roadmap” away from fossil fuels at the COP30 climate summit in Brazil in November.
The nations gathering in Santa Marta for the summit co-hosted by Colombia and the Netherlands, call themselves the “coalition of the willing”.
Ahead of country officials arriving in Santa Marta, a global group of academics will gather in the city this week to present and discuss the latest scientific evidence on fossil-fuel phaseout, which will then inform debate among policymakers.
A preliminary scientific “synthesis report” circulated to governments attending the talks and seen by Carbon Brief offers 12 “action insights” for countries to consider, along with a wide range of “action recommendations”.
These recommendations range from “phase out subsidies on fossil-fuel production and consumption” to “kick-start a forum to develop a legal framework to ban fossil-fuel advertisements”.
‘Rapid’ assessment
The preliminary scientific report seen by Carbon Brief – titled, “Action insights for the Santa Marta process” – is the result of some rapid work by an “ad-hoc” group of around 24 scientists.
It is designed to present governments attending the talks with concrete and actionable recommendations for transitioning away from fossil fuels.
The preliminary version, which includes recommendations such as “halting all new fossil fuel expansion”, has already been circulated to governments, with a view that this could help them to prepare for the talks in advance.
It will be further debated and refined by scientists attending the academic segment of the Santa Marta talks, before a final version is made public towards the end of April, Carbon Brief understands.
The process to produce the report began shortly after the conclusion of the COP30 climate summit in Brazil in November, explains its lead author, Dr Friedrich Bohn, a research scientist and co-founder of the Earth Resilience Institute in Germany. He tells Carbon Brief:
“When [Brazil] announced there would be a Santa Marta conference led by Colombia and the Netherlands, I was sitting listening with a small group of scientists. We thought: ‘This is great news, but it should be supported by scientific expertise.’”
One of the members of Bohn’s group had a pre-existing relationship with the Colombian government, allowing a dialogue to quickly be established, he continues:
“In the beginning, the idea was to just write a peer-reviewed paper. But, because of this close connection to the Colombian government and some feedback from them, the synthesis paper evolved.”
The report came out of a “very rapidly evolved process” that relied on the “goodwill” and “enthusiasm” of the academics involved, adds coordinating author Prof Frank Jotzo, a professor of climate change economics at Australian National University. (Jotzo is a former Carbon Brief contributing editor.) He tells Carbon Brief:
“It’s an attempt to get broad coverage on relevant topics from researchers with good expertise and reputation.”
The group of 24 scientists involved spent around two months compiling the “action insights” for the report, drawing on their expertise and the latest available research, says Jotzo.
Given the rapid nature of the report, it does not aim to be “completist”, has not been externally reviewed and did not follow a stringent process for author selection comparable to that used by Intergovernmental Panel on Climate Change (IPCC) reports, he adds.
The contributors to the report currently skew to the global north and include more men than women, adds Bohn.
‘Direct guidance’
In a departure from IPCC reports, the preliminary Santa Marta synthesis report offers “very direct guidance to action”, says Jotzo.
The report lists 12 “action insights”, each with three “action recommendations”. (The list was cut down from a shortlist of about 40-50 insights, Carbon Brief understands.)
One of the most striking in the draft is “action insight 5”, which says:
“Take immediate measures to prevent future emissions. Ban new fossil infrastructure, mandate deep methane cuts, accelerate electrification and inscribe fossil-fuel phase-down targets in NDCs [nationally determined contributions] and clean-energy pathways support to low and middle income countries (LMICs).”
The accompanying three “action recommendations” include “halting all new fossil-fuel extraction and infrastructure projects ahead of a final investment decision”, “implementing deep, legally binding methane cuts in the energy sector” and “inscrib[ing] targets for fossil-fuel phase down, electrification and green exports in NDCs”.
(The draft report includes multiple references to “phasing out” and “phasing down” fossil fuels, rather than the “transition away from fossil fuels” language that was, ultimately, agreed by countries at the COP28 UN climate talks in Dubai in 2023.)
Another action insight says “public support for climate action is broadly underestimated and undermined by interest groups, but it can be strengthened by debunking greenwashing narratives”.
One recommendation for this insight is that nations “reject natural gas as a bridging technology and CCS [carbon capture and storage] techniques as scalable compensation”.
In a letter introducing the report to governments and civil society, the scientists note that making direct recommendations is a “challenge for our community”, but added:
“However, in the spirit of a constructive collaboration between science and policymaking, we allowed ourselves to identify some potential courses of action that our community would recommend for each particular issue – and we invite you to weigh these against your own circumstances and pick up whatever seems most useful for you and your colleagues.”
The prescriptiveness of the recommendations – something strictly prohibited in IPCC reports – was an explicit request from the Colombian government, Bohn says:
“The idea of actionable recommendations was introduced by the Colombian government.
“There was some discussion within the team about this. It’s a tricky area when you leave science and move to consultation. Therefore, we agreed, in the end, to call them ‘actionable recommendations’ and to make them as precise as possible, from the scientific perspective.”
Jotzo, a veteran of the IPCC process, tells Carbon Brief that it was “very liberating” to work on a report with a “free-form process”:
“The bulk of policy-related research is very readily deployed to recommendations pointing out what countries could do. The IPCC process, for example, just doesn’t allow that. As far as the summary for policymakers in the IPCC is concerned, it will usually be governments that filter out anything that could be interpreted as a specific recommendation.”
He adds that the hope is that some of the action insights might be reflected in the high-level segment of the Santa Marta conference:
“No one is under any illusions that governments will walk away from the Santa Marta conference and will have made a decision to implement recommendations one, seven and nine – or something like that. But it is a chance to insert directly applicable action points into national and plurilateral policy agendas.”
Colombia calling
The preliminary report will be further debated and refined by scientists attending the “pre-academic segment” of the Santa Marta talks.
This is taking place from 24-26 April, ahead of the “high-level segment” involving ministers and other policymakers from 28-29 April.
The pre-academic segment will also separately see the launch of a new advisory panel on fossil-fuel transition and a scientifically led roadmap for how Colombia can transition away from fossil fuels, Carbon Brief understands.
The high-level segment is expected to be attended by representatives from around 50 countries, including COP31 host Turkey and major oil-and-gas producers such as the UK, Canada, Australia, Brazil and Norway.
Countries expected to attend account for one-third of global fossil-fuel demand and one-fifth of global production, according to the Colombian government.
At the end of the conference, countries are due to release a report featuring a “menu of solutions” for transitioning away from fossil fuels, according to Colombia’s environment minister Irene Vélez Torres.
This report is in turn set to inform a global “roadmap” on transitioning away from fossil fuels being developed by the Brazilian COP30 presidency, which is due to be presented at COP31 in Turkey this November.
The Brazilian COP30 presidency offered to bring forward a “voluntary” fossil-fuel transition “roadmap” outside of the official COP process, after countries failed to formally agree to one during negotiations in Belém.
The post Revealed: Scientists tell Colombia fossil-fuel transition summit to ‘halt new expansion’ appeared first on Carbon Brief.
Revealed: Scientists tell Colombia fossil-fuel transition summit to ‘halt new expansion’
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