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Tax havens and global environmental degradation

Nature Ecology & Evolution volume 2, pages 1352–1357 (2018)Cite this article

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A Publisher Correction to this article was published on 17 August 2018

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Abstract

The release of classified documents in the past years have offered a rare glimpse into the opaque world of tax havens and their role in the global economy. Although the political, economic and social implications related to these financial secrecy jurisdictions are known, their role in supporting economic activities with potentially detrimental environmental consequences have until now been largely ignored. Here, we combine quantitative analysis with case descriptions to elaborate and quantify the connections between tax havens and the environment, both in global fisheries and the Brazilian Amazon. We show that while only 4% of all registered fishing vessels are currently flagged in a tax haven, 70% of the known vessels implicated in illegal, unreported and unregulated fishing are, or have been, flagged under a tax haven jurisdiction. We also find that between October 2000 and August 2011, 68% of all investigated foreign capital to nine focal companies in the soy and beef sectors in the Brazilian Amazon was transferred through one, or several, known tax havens. This represents as much as 90–100% of foreign capital for some companies investigated. We highlight key research challenges for the academic community that emerge from our findings and present a set of proposed actions for policy that would put tax havens on the global sustainability agenda.

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Fig. 1: Fishing vessels and tax havens.
Fig. 2: Foreign capital and tax havens in the Amazon.

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Change history

  • 17 August 2018

    An earlier version of the Supplementary Information was mistakenly uploaded when this Perspective was published, and was live until 14 August 2018, when the correct version was uploaded.

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Acknowledgements

The authors acknowledge support from the Erling-Persson Family Foundation through the Global Economic Dynamics and the Biosphere programme (GEDB) at the Royal Swedish Academy of Sciences, the Futura Foundation, Vinnova (Earth System Finance), Mistra Financial Systems (MFS), the Nippon Foundation (Nereus Program – Predicting the Future Oceans) and the Foundation for Strategic Environmental Research (Mistra) through the Stockholm Resilience Centre (Stockholm University). J.F. acknowledges funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant no. 638946) for the CORPNET project at the University of Amsterdam. We thank E. Sundström (Stockholm Resilience Centre, Stockholm University) and A. Causevic (Global Economic Dynamics and the Biosphere programme (GEDB) at the Royal Swedish Academy of Sciences) for their assistance in creating the database for the Amazon case study.

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Authors and Affiliations

  1. Stockholm Resilience Centre, Stockholm University, Stockholm, Sweden

    Victor Galaz, Beatrice Crona, Alice Dauriach, Jean-Baptiste Jouffray & Henrik Österblom

  2. Global Economic Dynamics and the Biosphere, Royal Swedish Academy of Sciences, Stockholm, Sweden

    Victor Galaz, Beatrice Crona, Alice Dauriach & Jean-Baptiste Jouffray

  3. CORPNET, University of Amsterdam, Amsterdam, The Netherlands

    Jan Fichtner

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  1. Victor Galaz
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Contributions

V.G., B.C., A.D., J.-B.J. and H.Ö. designed research. V.G., B.C. and A.D. collected and analysed Amazon data. J.-B.J. and H.Ö. collected and analysed global fisheries data and cases. V.G., B.C., A.D., J.-B.J. and H.Ö. wrote the paper with contributions from J.F.

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Correspondence to Victor Galaz.

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Competing interests

H.Ö., J.-B.J., B.C. and A.D provide scientific support to companies in the seafood sector through the Seafood Business for Ocean Stewardship (SeaBOS) initiative (http://keystonedialogues.earth/). Remaining authors declare no competing interests.

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Appendices 1-4, including Supplementary Methods, Supplementary Tables S1-S3 and Supplementary References

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Galaz, V., Crona, B., Dauriach, A. et al. Tax havens and global environmental degradation. Nat Ecol Evol 2, 1352–1357 (2018). https://doi.org/10.1038/s41559-018-0497-3

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