The use of agricultural inputs is stimulated through various policies, including different types of fiscal policy instruments. Certain fiscal policies can support agricultural development, for example through public investments in innovation, infrastructure, and services. Such support can create enabling conditions for the agricultural sector more broadly and/or strengthen capacities to address environmental challenges, for instance providing incentives for resource-efficient or climate-smart practices. However, the ineffective/inefficient design and implementation of certain fiscal policies can also create perverse incentives that exacerbate the adverse environmental and health impacts associated with the over- or misuse of pesticides and fertilizers. This is a background document to the UNEA-5 review report on the environmental and health effects of pesticides and fertilizers.
The study was undertaken in the context of a UNEP-led project on Environment, Health, and Pollution, which seeks to provide the needed understanding, capacities, and tools to help countries and stakeholders take effective action to address pollution. As part of this project, a series of studies have been carried out which explore the effective use of fiscal policies for pollution reduction. These fiscal studies contribute to the Implementation Plan ‘Towards a pollution-free planet’ adopted at the Third UN Environment Assembly (UNEA-3), which identifies stimulating good practices through fiscal policy as an accelerator for implementation.