The costs of subsidies and externalities of economic activities driving nature decline
Economic sectors that drive nature decline are heavily subsidized and produce large environmental externalities. Calls are increasing to reform or eliminate subsidies and internalize the environmental costs of these sectors. We compile data on subsidies and externalities across six sectors driving biodiversity loss-agriculture, fossil fuels, forestry, infrastructure, fisheries and aquaculture, and mining. The most updated estimates suggest that subsidies to these sectors total between US$1.7 and US$3.2 trillion annually, while environmental externalities range between US$10.5 and US$22.6 trillion annually. Moreover, data gaps suggest that these figures underestimate the global magnitude of subsidies and externalities. We discuss the need and opportunities of building a baseline to account for the costs of subsidies and externalities of economic activities driving nature decline. A better understanding of the complexity, size, design, and effects of subsidies and externalities of such economic sectors could facilitate and expedite discussions to strengthen multilateral rules for their reform.
Authors
- Arun Agrawal (ORCID: https://orcid.org/0000-0001-6796-2958)
- Ram Pandit (ORCID: https://orcid.org/0000-0003-4053-5694)
- Sebastián Villasante (ORCID: https://orcid.org/0000-0001-6296-4479)
- Mulako Kabisa (ORCID: https://orcid.org/0000-0002-0543-1075)
- Joachim Claudet (ORCID: https://orcid.org/0000-0001-6295-1061)
- Yves Zinngrebe (ORCID: https://orcid.org/0000-0003-1731-2222)
- Karina Benessaiah (ORCID: https://orcid.org/0000-0001-9959-554X)
- Laura Pereira (ORCID: https://orcid.org/0000-0002-4996-7234)
- Lucas A. Garibaldi (ORCID: https://orcid.org/0000-0003-0725-4049)
- Victòria Reyes-García (ORCID: https://orcid.org/0000-0002-2914-8055)
Institutions
- University of Notre Dame (US)
- Institució Catalana de Recerca i Estudis Avançats (ES)
- Universitat Autònoma de Barcelona (ES)
- Helmholtz Centre for Environmental Research (DE)
- Stockholm Resilience Centre (SE)
- Stockholm University (SE)
- The University of Western Australia (AU)
- University of the Witwatersrand (ZA)
- Universidade de Santiago de Compostela (ES)
- Hokkaido University (JP)
- Université Paris Sciences et Lettres (FR)
- University of Michigan (US)
- Xunta de Galicia (ES)
- National University of Río Negro (AR)
- Centro Científico Tecnológico - Patagonia Norte (AR)
- Institut de Ciència de Materials de Barcelona (ES)
- University of Guelph (CA)
Publication Details
- Journal
- AMBIO
- Published
- 2025-02-28
- DOI
- https://doi.org/10.1007/s13280-025-02147-3
- Citations
- 9
- Primary Topic
- Economic and Environmental Valuation
- Type
- article
- Field-Weighted Citation Impact
- 28.18
Funders
- Ministerio de Ciencia e Innovación
- Universitat Autònoma de Barcelona
- European Research Council