Harmful Subsidies Research Articles

Broadening the global debate on harmful fisheries subsidies through the use of subsidy intensity metrics

In line with Target 14.6 of the Sustainable Development Goals of the United Nations (SDGs), the World Trade Organization (WTO) has been tasked with achieving a multi-lateral agreement on eliminating harmful fisheries subsidies. Despite almost two decades of negotiations and increasing public attention, an agreement remains elusive. There are numerous roadblocks to these negotiations, but one key issue is that there is no clear metric for the potential scale and relative impact of fishery subsidies. As such, much attention has been targeted towards the provision of large sums of subsidies to industrial and distant-water fleets, and the subsidies provided by the largest subsidising countries—the top seven together provide over 65% of the global total. This large percentage justifies the focus on these countries but doing so alone and without understanding the context within which the subsidies are provided, may ignore pervasive impacts of subsidies unrelated to their scale, such as their inequitable distribution. Using recently available data and various scaling analyses we developed a series of different subsidy metrics in order to broaden our understanding of the distribution of fisheries subsidies. We show that different global regions and individual countries could be considered as ‘top’ subsidisers, depending on the metric used. This highlights a potential issue of focusing on the absolute amounts provided as a de facto indicator of harm alone, which can detract from efforts by developing countries to redirect their harmful subsidies towards better support for their fishers and industries. Failure to eliminate harmful fisheries subsidies has ramifications across the SDGs and across global regions, regardless of the absolute amount of subsidies that are being provided therein.

Picking Our Environmental Battles: Removal of Harmful Subsidies or Carbon Taxation?

In this paper, we compare the effects of removing harmful fossil fuel subsidies with the replacement of the energy taxation by a carbon tax in Portugal. Since energy taxes focus on the energy content of the different energy products eliminating these provisions only brings their prices in line with their energy content. On the other hand, replacing the energy tax system with a tax on the emissions content of the energy products aligns the fossil fuel prices with their emissions content. We show that while replacing the energy with a carbon tax is a policy of a magnitude about eight times as large as the removal of the harmful subsidies, the effects of emissions are twenty times larger and the adverse economic and distributional effects only about twice as large. Accordingly, replacing the energy tax with a carbon tax is a much more cost-effective way of reducing emissions. This may suggest that focusing on the removal of harmful fossil fuel subsidies may be an environmental red herring.

WTO 개혁 쟁점 연구: 국영기업, 산업보조금, 통보 (The Way Forward for WTO Reform: SOEs, Industrial Subsidies, and Notifications)

WTO 개혁 쟁점 연구: 국영기업, 산업보조금, 통보 (The Way Forward for WTO Reform: SOEs, Industrial Subsidies, and Notifications)

환경 유해 보조금 연구 동향 분석

보조금 및 환경적으로 유해한 보조금 분야의 연구자들은 환경 유해 보조금의 지속적인 감축의 중요성에 대해 지적해 왔다. 다수의 누적된 문헌에 따르면, 환경 유해보조금 중 화석 연료 보조금의 환경적 위해에 대하여 알려져 있다. 특히 경제적, 사회적 성격을 가진 보조금의 일반적 감축으로 인해 파생될 수 있는 문제점을 지적하고 있다. 그러나, 화석연료보조금의 국내 외 현황과 정책적 변화로 인한 보조금 수혜 대상자의 경제적, 사회적 여건 변화에 대한 연구는 부족하다. 이 간극을 보완하기 위하여, 본 연구에서는 국내외 환경 보조금의 규정 방법, 정책적 변화, 보조금의 추정을 중심으로 현황 조사 분석 연구를 실시하였다. OECD 연구자료 조사와 국내외 문헌 연구를 통해 얻어진 바로는 국내 환경 유해 보조금의 규모는 증가 추세 이며 2020년 이후 탈석탄 (화석연료) 지지 이후에 대한 연구는 부족한 것으로 나타났으며, 이는 과거 누적된 문헌에서 예측한 추세와 일치하고 있다. 더 나아가, 이 자료 에서는 현재 증가 추세에 있는 환경 보조금의 감축은 보조금 수혜자의 고려에 기반하여 동시에 진행되어야 한다는 것이 함께 확인되었다. 본 연구에서 조사한 현황분석 자료들은 선행 연구들을 확증할 뿐만 아니라, 환경 유해 보조금의 분야를 연구 시 고려할 점을 더욱정교화하고 있다. 게다가, 이 통찰은 보조금의 철폐 시 보조금 수혜 외면 자들에 대한 새로운 보조금의 발생에 대한 가능성을 제시하며, 다양한 문제들에 폭넓게 적용될 수 있다.

A 20-year retrospective on the provision of fisheries subsidies in the European Union

Abstract The next few months will be crucial in determining whether the world’s major fishing nations will deliver on commitments under the Sustainable Development Goals (SDGs) of the United Nations to prohibit harmful fisheries subsidies. Timing is of heightened importance given that the EU—the second-largest subsidizer—is reforming its financial instrument for fisheries. This article therefore examines the last 20 years of subsidies provided to the fisheries sector by the EU and supports discussion of the potential future for EU fisheries subsidies and the chance of success for the SDGs. Significant changes have occurred to EU fisheries subsidies during this period. Partly these changes have occurred as a result of the removal of certain capacity-enhancing subsidies and partly due to additional funds being allocated to beneficial forms of public funding. However, progress is slow and a significant amount of capacity-enhancing subsidies remain. Furthermore, the true extent of any reduction in capacity-enhancing subsidies may be shrouded by the Pollyannaish classifications of subsidization, but most disconcerting are the recent positions adopted by both the European Parliament and Council of the EU, which aim to reintroduce some of the most harmful subsidies, thereby putting the progress needed to achieve sustainable fisheries at risk.

Environmental taxes and subsidies: some insights from the Italian experience

Environmental taxes and subsidies are considered by the economic theory as useful policy instruments to enhance environmental protection, improve the alignment of prices with full social costs, and encourage sustainable modes of consumption and production. In a policy-oriented perspective, the issue of reforming the financial system in an environmental perspective has attracted increasing attention to the international and European agenda in recent decades. Despite these premises, the actual implementation of environmental fiscal reforms (EFRs) has often lagged behind their full potential and premises. This paper analyzes environmental taxes and subsidies applied in Italy in the last decades to identify priorities, opportunities, and barriers to future developments. Data collected in the main national data sources and reports, as the recently established Catalogue of Environmentally Harmful Subsidies (EHSs) and environmentally friendly subsidies (EFSs), reveal how the implementation and design of taxes and subsidies have been, and still are, mainly driven by non-environmental objectives, leading to mixed and not completely satisfactory effects. In conclusion, relying on these results, some key elements – transparency, graduality, and predictability – may help to overcome the existing barriers to implement and achieve a broader and comprehensive EFR in Italy.

Science, subsidies and the politics of the pulse trawl ban in the European Union

The decision to ban the pulse trawl by the European Parliament in early 2019 was influenced by public debate over its scientific and political legitimacy. In their 2019 paper in Marine Policy, Le Manach et al. continued this debate by making three claims. First, that the pulse trawl has substantial negative social and environmental impacts. Second, that it received ‘illegal’ subsidies from the European Union amounting to €20.8 million. And third, that the Dutch government and industry did not provide adequate transparency in the allocation of subsidies. These claims are misleading and, in some instances, demonstrably false: the ongoing science on the effects of the pulse trawl shows relatively positive impacts; following the conventional definitions of “harmful” and “fisheries subsidies” in the economic literature, harmful subsidies provided to pulse trawling only amount to €0.3 million, or less than 2% of Le Manach et al.‘s estimate; and there is no evidence of intentional non-disclosure of information related to the distribution of subsidies by the Dutch government. Finally, we reflect on the consequences of the inaccuracies presented by Le Manach et al. in the governance of fishing gear innovation and their wider effect on the legitimacy of advocacy-based science.

Changing the narrative on fisheries subsidies reform: Enabling transitions to achieve SDG 14.6 and beyond

The World Trade Organization (WTO) is in the final stages of negotiating an agreement to prohibit harmful fisheries subsidies, thereby achieving UN Sustainable Development Goal (SDG) 14.6. An effective agreement should be viewed as an opportunity for nations to proactively transition towards sustainable and equitable fisheries and pave the path for other SDGs. Supporting fishers does not require harmful subsidies, and we provide evidence-based options for reform that highlight equity needs while reducing environmental harm. Subsidy reforms need clear goals, co-design, transparency, and fair implementation. An agreement on SDG 14.6 could be a turning point for the oceans and for the well-being of those that depend on the oceans for livelihoods and nutrition. Responsible seafood production will require international cooperation not only at WTO, but among governments, fisher organizations, civil society, and the wider public.

Sustainable resource development in the Arctic: Using export trade agreements to restrict environmentally harmful subsidies

Abstract Although the Arctic is emerging as a promising region for energy development and maritime transportation, navigational safety is a persistent and growing concern. What can international trade regulations do to ensure the safe transportation of natural resources on the Northern Sea Route (NSR) and the sustainable development of the Arctic region? Government support is almost inevitable for shipyards, particularly in a highly competitive market. Shipyards build large-scale vessels that navigate the Arctic Ocean. However, excessive export competition will soon lead to over-production and exportation of substandard products. Assuming that even a single incident in the NSR could have a disastrous impact on the flora and fauna of the entire Arctic region, the potential for substandard vessel use represents a significant risk and potential damage to the environment. Although the World Trade Organization (WTO) has detailed rules for this purpose with an effective dispute settlement mechanism, the history of WTO disputes has proven that WTO proceedings sometimes result in unintended consequences. As an alternative option, along with negotiations under the WTO and the Organisation for Economic Cooperation and Development (OECD), this paper suggests the possibility of a critical mass agreement to mutually allow more flexible government support for vessels only if they have superior environmental performance.

Busting myths that hinder an agreement to end harmful fisheries subsidies

The World Trade Organization's (WTO) has committed to achieving a multilateral and legally binding agreement to eliminate fisheries subsidies that contribute to overcapacity and overfished stocks, and to illegal, unreported, and unregulated fisheries. This agreement is due in December of 2019 and also represents UN Sustainable Development Goal 14.6. A strong agreement would benefit fishers and marine environments, represent a milestone for multilateralism and both international and national fisheries policy, and become the first global achievement of a SDG target. To help discussions and negotiations focus on real challenges, we briefly dispel five myths related to harmful fisheries subsidies. Harmful fisheries subsidies are not effective at competing with large fishing nations and worsen poverty in the long-term. The worst effects of harmful subsidies occur when management capacity is limited, and overexploitation and overcapacity in one region can impact others. Because most global stocks are already exploited at least at maximum sustainable levels, more fishing capacity is unnecessary. Turning away from harmful subsidies can enable new investments to benefit fishing communities, national economies, and marine ecosystems.

Preconditions for the Tax Environment of a Alterglobal Development

In this article, we analyzed economic surroundings as a precondition for the development of the tax environment in the context of alterglobal development. We admitted that economic globalization is harmful to the environment because it depends on its own viability: the constant increase in commodity consumption, the increased use of resources and the growing disposition to pollute waste in the ocean, on the ground, and in the air. So, we proposed considering and analyzing alterglobalization as a process oriented towards self‑determination for peoples, communities and nations. In this context, we developed the idea about Environmental Fiscal Reform, including increasing green taxation and the phase‑out of environmentally harmful subsidies as well as financial incentives, VAT reductions and tax breaks for green initiatives – providing the perfect conditions for the transition to a circular economy. As the new economy is developing at a rapid pace today – 10% per year, more than three times the global economic growth rate – it has a significant impact on competitiveness.

A Policy Mix for Resource Efficiency in the EU: Key Instruments, Challenges and Research Needs

Against the background of an often wasteful use of natural resources, the European Union has made resource efficiency a top policy priority. Policy formulation is, however, at a very early stage in many Member States, with often vague notions of what resource efficiency means, characterised by fragmented instruments and overlapping competencies. This paper develops a conceptual framework for defining, assessing and developing resource efficiency policy mixes. It argues that a mix of policies and instruments is best suited to overcoming the complex challenges of the 21st Century. Such a mix addresses multiple resource domains at a strategic, high level and contains interacting instruments targeting multiple actors, levels of governance and sectors and life-cycle stages of resource use. This paper looks at criteria for effective resource efficiency policy instruments, presents both an indicative policy mix across 9 policy domains and case studies (on environmental harmful subsidies, supply chain efficiency in food systems and product-service systems) and identifies key challenges to overcome trade-offs in instrument design, maximise synergies, reduce conflicts, promote coherence, coordinate activities and move from theory to practice. Research needs are discussed regarding who shall devise, implement, and coordinate such a policy mix, considering negotiating power, timing and complexity.

Addressing challenges to human health in the Anthropocene epoch-an overview of the findings of the Rockefeller/Lancet Commission on Planetary Health.

The report of the Rockefeller Foundation/Lancet Commission on Planetary Health described how human health directly depends upon the environment. It takes a broad perspective not only acknowledging climate change as the most important global environmental threat to health but also recognizing other impacts, including dramatic loss of tropical forests, land degradation, loss of biodiversity, declining freshwater resources, ocean acidification, and over-exploitation of fisheries. All pose challenges to human health gains, leading to the concept of planetary health—that the human condition is tied to natural systems. The Planetary Health Commission report highlights several major concerns arising from environmental change including impacts on food availability and quality, increases in natural disasters and population displacement, and newly emerging diseases, e.g. from zoonotic infections. Three challenges emerge from the report: the first is imagination, or conceptual challenges—better metrics are needed to assess human progress within the context of environmental change; the second is a lack of relevant knowledge, requiring more research on the inter-linkages between environmental change and health and on the effectiveness of potential solutions; and the third is implementation of solutions, ensuring that the science is translated into policy and practice. There are many opportunities to promote planetary health including developing sustainable and healthy cities, encouraging more resilient health systems and disaster preparedness, reducing food waste, preserving ecosystems, and redirecting harmful subsidies in food, agriculture, fishery and energy sectors. Many current trends are driven by inequitable, inefficient, and unsustainable patterns of resource consumption and technological development, coupled with population growth, but solutions lie within reach. Prosperity must be redefined as an enhancement of the quality of life and the delivery of improved health for all, together with respect for natural systems.

Fish Trade Liberalization Under 21st Century Trade Agreements: The CETA and Newfoundland and Labrador Fish and Seafood Industry

Both classical (Ricardo) and neo-classical (Heckscher-Ohlin) theories of international trade assume that free trade results in welfare gains for all involved. A more recent literature dedicated to liberalization of trade in renewable resources finds that welfare effects depend on certain factors, such as the country's status as importer or exporter, the state of the renewable resource stocks and the size of the country on the world market (Chichilnisky, 1993; Brander and Taylor, 1997a; Emami and Johnston, 2000, Hannesson, 2000), or remain theoretically indeterminate and require empirical analysis (Nielsen, 2009).Fish trade liberalization is provided in the Comprehensive Economic and Trade Agreement (CETA) concluded by the Canadian Government in 2013 with the European Union (EU). This new type of “21st century” trade agreement challenges both the conventional theory of international trade and renewable resource-based sectors of economic activity such as fish and seafood by opening them up to industrial-type international competition and integration. The paper uses the theoretical framework of ecological economics (Costanza et al., 2015) to demonstrate that the declining Newfoundland and Labrador (NL) fish and seafood industry is not ready to participate gainfully in implementation of the CETA. It also uses the concept of “policy space” (Rodrik 2007, Pauwelyn 2008) to recommend some policy changes that can prepare the NL fish and seafood sector for competitive and beneficial participation in the CETA. Restructuring the fish and seafood sector with a focus on small scale, elimination of harmful subsidies and redirecting them to achieve lower costs of operation, better trained labor force, and more just and sustainable supply/marketing networks, will make it fit to benefit from the gains from trade and to contribute to a more equitable distribution of the benefits of the fishery to the fishers and local communities.

Building the Green Economy

The green economy in North America is at a critical crossroads. Will it foster a new wave of economy-wide innovation, employment, and green growth, or will green sectors remain a niche within an overall “brown” economy? Much will depend on what replaces the current “policy void” since the green stimulus policies of the Great Recession. Currently, three major market disincentives remain: environmentally harmful subsidies, inadequate market-based incentives, and insufficient public support for private R&D. A policy strategy for green growth requires phasing out and rationalizing subsidies, instigating effective market-based instruments, and allocating the revenues raised to enhance green innovation.

Subsidy Regulation in WTO Law: Some Implications for Fossil Fuels and Renewable Energy

This contribution discusses WTO subsidies disciplines in the context of the energy sector. After laying out the relevant disciplines, it will discuss the paradox of WTO law with respect to subsidies towards fossil fuels vis-a-vis those towards renewable energy. It is clear that subsidies on clean energy production and consumption are needed to correct market failures and to promote legitimate policy goals such as contributing to sustainable development through the scale up of clean energy, including expanding its trade.2 However, experience has shown that support schemes for clean energy by their nature and design make them sensitive to WTO dispute settlement. Much more harmful subsidies on fossil fuels, on the other hand, are omnipresent yet often escape being addressed in the multilateral trading system. The contribution will draw upon the examples of ‘energy dual pricing’ and Feed-In Tariffs (FITs). It will argue that while it may be difficult to tackle fossil fuels subsidies in the WTO forum, more efforts are needed to (re)legalise environmental subsidies.

Addressing challenges to human health in the Anthropocene epoch—an overview of the findings of the Rockefeller/Lancet Commission on Planetary Health

The report of the Rockefeller Foundation/Lancet Commission on Planetary Health described how human health directly depends upon the environment. It takes a broad perspective not only acknowledging climate change as the most important global environmental threat to health but also recognizing other impacts, including dramatic loss of tropical forests, land degradation, loss of biodiversity, declining freshwater resources, ocean acidification, and over-exploitation of fisheries. All pose challenges to human health gains, leading to the concept of planetary health—that the human condition is tied to natural systems. The Planetary Health Commission report highlights several major concerns arising from environmental change including impacts on food availability and quality, increases in natural disasters and population displacement, and newly emerging diseases, e.g. from zoonotic infections. Three challenges emerge from the report: the first is imagination, or conceptual challenges—better metrics are needed to assess human progress within the context of environmental change; the second is a lack of relevant knowledge, requiring more research on the inter-linkages between environmental change and health and on the effectiveness of potential solutions; and the third is implementation of solutions, ensuring that the science is translated into policy and practice. There are many opportunities to promote planetary health including developing sustainable and healthy cities, encouraging more resilient health systems and disaster preparedness, reducing food waste, preserving ecosystems, and redirecting harmful subsidies in food, agriculture, fishery and energy sectors. Many current trends are driven by inequitable, inefficient, and unsustainable patterns of resource consumption and technological development, coupled with population growth, but solutions lie within reach. Prosperity must be redefined as an enhancement of the quality of life and the delivery of improved health for all, together with respect for natural systems.

A Systemic Approach to the Development of a Policy Mix for Material Resource Efficiency

Increasing material use efficiency is important to mitigate future supply risks and minimize environmental impacts associated with the production of the materials. The policy mix presented in this paper aims to reduce the use of virgin metals in the EU by 80% by 2050. We used a heuristic framework and a systems perspective for designing the policy mix that combines primary instruments (aimed to achieve the 80% reduction target – e.g. a materials tax, technical regulations and removal of environmentally harmful subsidies) and supportive instruments (aimed to reduce barriers to implementing the primary instruments and to contribute towards the policy objectives – e.g. research & development support, and advanced recycling centers). Furthermore, instruments were designed so as to increase political feasibility: e.g. taxes were gradually increased as part of a green fiscal reform, and border-tax adjustments were introduced to reduce impacts on competitiveness. However, even in such a policy mix design ongoing ex-ante assessments indicate that the policy mix will be politically difficult to implement – and also fall short of achieving the 80% reduction target. Nonetheless, we suggest combining primary and supportive instruments into coherent and dynamic policy mixes as a promising step towards system reconfigurations for sustainability.

Building on progress in fisheries subsidies disciplines

Governments have tried for many years to negotiate rules to limit fisheries subsidies in the World Trade Organisation (WTO). Meanwhile, Parties to the Trans-Pacific Partnership (TPP) trade agreement have agreed to prohibit subsidies to particular kinds of fishing activity. Recent proposals in the WTO suggest a degree of support for a similar narrow prohibition. This paper uses evidence in the literature on the impact of subsidies on fish stocks, and from the WTO negotiations, to propose how disciplines on fisheries subsidies could be expanded, building on these first steps by the members of the TPP. The impact of subsidies on fishers' incentives and fish stocks depends on several factors, but many subsidies can tend to increase fishing capacity and effort beyond sustainable levels. Options for expanded disciplines include prioritising the prohibition of those subsidies that are most likely to be harmful to fisheries resources. An “actionable” category for other harmful subsidies could also be prioritised, as well as a set of exceptions for expenditures that are likely to be beneficial in the sense that they help to protect the environment or support poverty reduction.

Reviewing the role of habitat banking and tradable development rights in the conservation policy mix

SUMMARYHabitat banking and tradable development rights (TDR) have gained considerable currency as a way of achieving ‘no net loss’ of biodiversity and of reconciling nature conservation with economic development goals. This paper reviews the use of these instruments for biodiversity conservation and assesses their roles in the policy mix. The two instruments are compared in terms of effectiveness, cost effectiveness, social impact, institutional context and legal requirements. The role in the policy mix is discussed highlighting sequential relationships, as well as complementarities or synergies, redundancy and conflicts with other instruments, such as biodiversity offsets and land-use zoning.Habitat banking and TDR have the potential to contribute to biodiversity conservation objectives and attain cost-effective solutions with positive social impacts on local communities and landowners. They can also help to create a new mind-set more favourable to public-private cooperation in biodiversity conservation. At the same time, these policy instruments face a number of theoretical and implementation challenges, such as additionality and equivalence of offsets, endurance of land-use planning regulations, monitoring of offset performance, or time lags between restoration and resulting conservation benefits.A clear, enforceable regulatory approach is a prerequisite for the success of habitat banking and TDR. In return, these schemes provide powerful incentives for compliance with regulatory norms and ensure a more equitable allocation of the benefits and costs of land-use controls and conservation. Environmentally harmful subsidies in other policy sectors as well as alternative offset options, however, reduce the attractiveness and effectiveness of these instruments. Thus, the overall performance of habitat banking and TDR hinges on how they are integrated into the biodiversity conservation policy mix and fine-tuned with other sectoral policies.