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A global review of ecological fiscal transfers

Abstract

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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Fig. 1: Alternative scales of EFT in intergovernmental fiscal relations.
Fig. 2: World map of EFT.
Fig. 3: Annual global volume of EFT.

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Acknowledgements

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).

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J.B. and I.R. designed the review and led the writing of the paper. All authors provided source material and contributed to writing and editing the paper.

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Correspondence to Jonah Busch.

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Peer review information Nature Sustainability thanks Alexandre Sauquet and Sven Wunder for their contribution to the peer review of this work.

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Busch, J., Ring, I., Akullo, M. et al. A global review of ecological fiscal transfers. Nat Sustain (2021). https://doi.org/10.1038/s41893-021-00728-0

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