Reforming subsidies for socioeconomic and environmental resilience

Rising fuel prices, fluctuating harvests, trade tensions, conflict and shrinking fiscal space make environmentally harmful subsidies (EHS) reform politically and economically challenging, but the need to do so remains urgent. 

Governments can look beyond simply removing EHS and consider how existing public spending can be repurposed to reward sustainable businesses. 

We identify key characteristics of successful repurposing, including government coordination, clear communication, complementary programmes to support citizens, and monitoring of environmental and social impacts. We also highlight the role of businesses, workers, producer organisations and other non-government stakeholders in shaping and supporting effective, durable reform.