UNDP Calls for Phasing Out Harmful Subsidies to Combat Biodiversity Loss Amid $700 Billion Financing Gap

An important update to the BIOFIN methodology is the enhanced role of the private sector in assessing nature impacts and dependencies.

Countries striving to enhance biodiversity protections must prioritize the identification and elimination of subsidies harmful to nature, according to a recent report from the United Nations Development Programme (UNDP). The launch of the BIOFIN Workbook 2024 coincides with the CBD COP16 currently taking place in Colombia, providing countries with a strategic roadmap to secure the financing necessary for expanding biodiversity protections.

This initiative addresses a staggering $700 billion annual funding shortfall needed to protect biodiversity effectively. The health of the planet hinges on closing this gap, which directly impacts climate stability, food security, and the well-being of communities globally.

Every year, harmful subsidies exceed $1 trillion worldwide, as noted in UNDP’s report, The Nature of Subsidies. This new workbook is intended to be used in conjunction with the report, offering a methodology for countries to scrutinize public spending and mitigate negative impacts on biodiversity.

The BIOFIN Workbook outlines several critical areas for action:

Identifying Harmful Subsidies: Countries should recognize which subsidies are detrimental to biodiversity.

Redesigning Subsidies: Efforts should be made to alter these subsidies to lessen their adverse effects on nature.

Creating National Action Plans: Governments are encouraged to formulate plans that ensure public spending promotes nature-positive outcomes and aligns with the Sustainable Development Goals (SDGs).

By reviewing subsidies, countries can realize significant fiscal savings, which can be redirected to fund biodiversity protection efforts.

Marcos Neto, Assistant Secretary General and Director of the Bureau for Policy and Programme Support at UNDP, remarked, “Biodiversity loss, climate instability, and land degradation are intertwined crises. Solutions involve redirecting financial flows away from damaging investments towards nature-positive economic policies.” He emphasized that a nature-positive economy is crucial for achieving sustainable development, where economic growth is harmonized with environmental protection.

An important update to the BIOFIN methodology is the enhanced role of the private sector in assessing nature impacts and dependencies. Businesses are encouraged to support nature-positive investments, creating new funding opportunities for biodiversity while unlocking economic benefits.

The BIOFIN initiative, developed by UNDP, has already catalyzed over $1 billion in financing for biodiversity across 41 countries since its inception in 2018. Currently, 23 countries are being supported in screening and greening harmful subsidies, with Colombia, Thailand, and the Philippines at the forefront of these efforts.

This call to action is underscored by alarming new data from the World Wildlife Fund (WWF) and the Zoological Society of London, revealing that wildlife populations have plummeted by an average of 73% over the past 50 years. The Living Planet Index highlights particularly severe declines in freshwater species, which have dropped by 85% from 1970 to 2020. Meanwhile, terrestrial and marine populations have seen declines of 69% and 56%, respectively.

The UNDP's initiative aims not only to combat biodiversity loss but also to foster economic resilience and sustainability, advocating for a fundamental shift in how countries approach economic policies in relation to nature. By aligning financial systems with environmental goals, nations can protect their ecosystems while promoting economic growth and enhancing livelihoods.