Ecological fiscal transfers (EFT) transfer public revenue between governments within a country based on ecological indicators. EFT can compensate subnational governments for the costs of conserving ecosystems and in principle can incentivize greater ecological conservation. We review established EFT in Brazil, Portugal, France, China and India, and emerging or proposed EFT in ten more countries. We analyse common themes related to EFT emergence, design and effects. EFT have grown rapidly from US$0.35 billion yr−1 in 2007 to US$23 billion yr−1 in 2020. We discuss the scope of opportunity to expand EFT to other countries by ‘greening’ intergovernmental fiscal transfers.
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This Review is the result of an international online workshop on EFT hosted by the Earth Innovation Institute and Technische Universität Dresden on 21–24 September 2020. G. Lima provided helpful input on data analysis for Brazil. J.B. and O.A. are grateful for funding from the Norwegian Agency for Development Cooperation. R.S. acknowledges that CENSE is funded by Fundação para a Ciência e a Tecnologia (project number UIDB/04085/2020).
The authors declare no competing interests.
Peer review information Nature Sustainability thanks Alexandre Sauquet and Sven Wunder for their contribution to the peer review of this work.
Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
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Busch, J., Ring, I., Akullo, M. et al. A global review of ecological fiscal transfers. Nat Sustain 4, 756–765 (2021). https://doi.org/10.1038/s41893-021-00728-0
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