Bridges Trade BioRes • Volume 6 • Number 6 • 3rd April 2006

Greenpeace Says Subsidies Are “Killing Oceans and Forests”

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In a report released on 17 March, Greenpeace International found that subsidies to the fisheries and forest sectors amount to at least US$19 and 35 billion respectively and act as perverse incentives that harm the environment. The report — entitled “How government funds are killing oceans and forests and why the CBD rather than the WTO should stop this perverse use of public money” — notes that these subsidies promote the unsustainable use of natural resources by preventing economic actors from paying the full or at least the market price of production factors and natural resources. Such subsidisation could occur through implicit subsidisation, such as road building or low rent capture through low stumpage fees in the forestry sector, or through explicit subsidisation, such as financial transfers to expand capacity in the fisheries sector. The report suggests that the between US$1 and 2 trillion currently spent on all subsidies that encourage biodiversity destruction through harmful environmental and social externalities could better be spent to solve urgent development and environmental problems.

Greenpeace sets out a list of ten reasons why the Convention on Biological Diveristy (CBD) should be the international organisation leading the drive to reduce environmentally harmful subsidies instead of the WTO, including that the WTO moves slowly, focuses on economic issues and fails to “really integrate environmental and social concerns in WTO decisions”. Similar to its previous report on liberalisation of trade in fish and forest products (see Bridges Trade BioRes, 20 January 2006), Greenpeace argues that the lack of real progress in four years of fish subsidy negotiations has raised the question of why trade-related environmental issues should be dealt with at the WTO, and whether the WTO indeed has the legitimacy to judge the appropriateness of specific trade and environment-related measures. Instead, it would like to see the CBD take the lead in an independent, internationally co-ordinated process of data collection and monitoring of subsidies and their environmental impacts, particularly in the forestry sector where such data is lacking. However, related discussions on how to reduce or mitigate so-called “perverse” incentives at the CBD have so far made little headway and, following a decision at the Eighth Conference of the Parties to the CBD; have been put on the backburner for at least another two years (see related COP-8 story, this issue).

The Greenpeace study is available at http://www.greenpeace.org/international/press/reports/deadly-subsidies-2

Additional resources on forests, trade and related topics are available at http://www.trade-environment.org/page/theme/nat_res/forest.htm

The ICTSD COP-8 Biodiversity and Trade Briefing on “Incentive Measures and WTO Rules” is available at http://www.trade-environment.org/output/infoxch/COP8_ICTSD_incentives.pdf

ICTSD Reporting.