Hosted by Canada and presided over by China, the end of COP-15 negotiations resulted in the birth of Kunming-Montreal Global Biodiversity Framework (GBF).
The GBF, consisting of 23 targets and 4 dedicated goals, aims to address and aid in solving the existing biodiversity crisis by restoring lost ecosystems, protecting the degrading ecosystems, practicing natural ecosystem solutions and strengthening the indigenous rights and traditional knowledge.
A gamut of ambitious targets has been laid down by 188 countries to attain these milestones by either 2030 or 2050.
The Executive-Director for United Nations Environment Program (UNEP) stated: “Success will be measured by our rapid and consistent progress in implementing what we have agreed to. The entire UN system is geared to support its implementation so we can truly make peace with nature.”
This newly born framework has attracted decent criticism because of the lack of a specific mathematical way to work on the unsustainable impact of production and consumption or its alleged corporate influence.
However, it has also potentially exposed certain crucial unquestioned matters to light.
The story of Environmental killing Subsidies:
While making their respective entries into the historic Earth Summit 1992 in Rio de Janeiro, various experts raised their deliberate concerns against government subsidies given to various industries.
This was not done on the grounds of violating the global ‘free market’ trading rules or for wasting excessive money instead of using it to save the Earth, but for the sheer damage it causes to the environment.
What are the government subsidies? What constitutes it?
Subsidies constitute the payments, cash transfers, tax incentives or any other form of economic support extended by the government to specific in order to aid the nation’s economic well-being and strengthen its infrastructure.
Since an economy sustains a reduced number of risks, in the era of market imperfections, it is the government’s imperative to provide subsidies to the most vulnerable or disadvantaged sections.
But by doing so, it also incurs the opportunity cost of putting other businesses at risk.
What are the risks associated with irresponsible subsidy provision?
The two extremes: While an increased flooding of market with subsidized commodities may be a probable outcome of this mechanism, a lack of its supply is also likely a possibility.
Why? One can imagine the manufacturers of such a subsidized commodity quit working hard for a sudden demand hike caused because of lower prices. This complete conundrum may lead to unrealized price rise.
No surety of effectiveness of subsidies: Subsidies turn out to be usually effective and beneficial but there is absolutely no evidence of their effectiveness as it remains hard to calculate the effects crafted solely by the subsidies.
Moreover, many experts believe that subsidies cost incurred by the government becomes greater than the benefits it is aimed to offer.
At times, they only offer short-term therapy rather than working on repairing the factors responsible for the need for subsidy.
Extra burden on consumers: In an attempt to subsidize the creation of these commodities, the government sources its finances via either budgetary allocations or compensation from its citizens pockets using additional cess etc.
As more than a fifth of India’s population lies under poverty, the country finds it better to offer subsidies for a variety of other reasons.
What is all so wrong about irresponsible subsidies?
A report released by an NPO titled “Fossil fuels don’t benefit the poor”, the subsidized fuel consignments tend to cross national borders or sold in black markets or diverted for lesser efficient uses.
“Gasoline and diesel subsidies in India benefit only people with cars, which can never be afforded by poorer households, let alone the fuels.”
”Many of these subsidies are kept in place through political pressure, campaign donations or even bribery”.
An associated survey by an NGO in Delhi explains it all: “Almost every policy design in India intends to benefit the poor but end up benefiting primarily the well-off sections of the society and community.”
Many of the times, this help extended in the name of social help by the governments becomes the biggest of all ‘Write-Offs’ from their respective accounts. This is like negating the risks without sufficient provisioning.
How are subsidies proving disastrous for the environment?
Subsidies can be classified into direct and indirect ones wherein the former finds transparency and mentions in the budget or public policy whereas the latter have no direct budgetary constraints like export credit guarantees or the preferential treatment of certain goods with the help of regulations etc.
According to various experts hailing from countries: left or right, rich or poor, at least $500- $900 billion has accrued already for damaging the surroundings.
For instance, these destructive subsidies may happen to easily lead polluters passing on some of their own production costs to the state and society inherently.
As per a report conducted in Germany 2012, the environment-damaging subsidies in the country accounted to more than €57 billion, considering the fact that it is mostly difficult and actually not possible to accurately quantify these harmful components introduced by subsidies.
However, the worst is here now.
Availability of elaborate and unchecked subsidies has led to profligacy, destroying sustainable patterns of generation and consumption in most spheres they are introduced like electricity, transport, agriculture or construction.
Let’s take a brief overlook at what the electricity subsidy does? Reducing electricity tax by funding up the gap or pouring a countable stimulus for energy consumption of the manufacturing industries thus accelerating their consumption of fossil fuels.
This indirectly leads to increased mining of fossils.
‘There’s something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction”, amplifies a report on the similar lines.
If we are to believe an International Monetary Fund (IMF) report, the fossil fuel industry has found help from subsidies valued around $5.9tn in 2020.
While India alone, only spends a meagerly 1.4 percent of its GDP on health, had become 2.1 percent because of Covid and has been recommended to be increased to at least 3 percent.
On the other hand, a sharp growth has been registered for electricity usage in cultivation of crops.
It has been estimated that the energy consumption pertaining to agriculture has increased from nearly 8 percent of the total electricity consumption in 1969 to 17 percent in 2016.
Most of this energy is sourced at either free or subsidized rates, most of which does not remain metered.
It is worth noting that most of this electricity diverted to agriculture finds its use for pumping groundwater for irrigation of fields.
Why is this bad? With free electricity at their will, approximately 80 percent of the groundwater reservoirs in Punjab and around 60 percent in Haryana stand over-exploited.
With more power consumption, comes more burning and extraction of fossil fuels. More of these events lead to ecosystem distress, relocation and rehabilitation of species and diversion of surviving forests.
The newly amended mechanism of Environment Impact Assessment (EIA) has also removed an extra check on the allocation of mines.
Additionally, this disincentivizes the creation and establishment of green or renewable energy projects.
This also encourages unsustainable agricultural practices to prosper as the free and unquestioned availability of power to farmers endorses growth of crops which are better rewarding and not suitable to that agro-climatic zone like rice cultivation in Maharashtra etc.
Nature is a sorcerer and remains one while it responds to us, rooting from our reckless actions. All we need to be, is a little careful while dealing with our environment and the planet.