Environmentally harmful subsidies are government actions that by design or effect accelerate the production or consumption of natural resources or undermine broader ecosystems supporting planetary health. Eliminating these subsidies would allow governments to reallocate resources to support social needs, send more accurate signals to investors and producers on where to direct R&D efforts and deploy new capital, and accelerate innovation to reduce greenhouse gas emissions.
This working paper evaluates government-led efforts to address environmentally harmful subsidies, especially in the areas of agriculture, fisheries and fossil fuels. In doing so, it discusses how subsidy reform benefits and identifies areas where rapid action is needed.