- Firm
- Provisional
- Coming soon
- Revised
- Firm
- Provisional
- Coming soon
- Revised
How well are we doing?
Editor's note: We have recently refreshed and updated our data for all countries on the platform, as we revised the 21 policies we cover.
Reforming environmental taxes, development aid, private financial flows, and public spending to provide dedicated finance for nature is a growing area of green policymaking. More than half of the 41 countries reviewed against this policy so far have taken moderate to weak action on the prioritisation of nature finance. As with other policies, this entry-level progress is matched by a lack of ambition at the highest level, with no countries meeting our highest level of ambition and having specific and comprehensive national policies on nature finance that envision a full reorientation of economic incentives.
Countries like Germany, Costa Rica, India, Brazil and Australia are all making varying levels of progress in operating various nature-positive finance instruments, yet comprehensive reform of environmentally harmful subsidies remains incomplete. Even Sweden, which maintains one of the most mature environmental fiscal systems globally, anchored by a comprehensive carbon tax and a legal foundation for the Polluter Pays Principle under the Environmental Code, shows backsliding on harmful-subsidy reform. Additionally, many countries, including those comprising large Indigenous populations such as Colombia, Mozambique, India and Australia are yet to evidence substantial and targeted investments supporting IPLCs.
We’ve had a trillion-dollar free lunch on nature. It’s all coming home to haunt us now.
About this policy
Nature and biodiversity are in crisis. Plants and animals are going extinct at a rate not seen since the end of the dinosaurs, 65 million years ago; by 2050 we may have lost as many as 50% of all species. Meanwhile, despite climate action around the world, we continue to pollute our atmosphere with carbon emissions that cause cumulative long-term economic damage that outweighs any gains.
Economic factors and incentives are central to driving climate and ecological breakdown, and fiscal reforms that can prioritise nature finance aim to reset this balance by reforming environmental taxes and fiscal flows, and channelling investment towards the natural world and its protectors. This often involves ensuring there are clear policies for nature restoration embedded within ministries of finance, planning, and local government - and that there is some engagement with ensuring local communities or indigenous groups are able to access funding and support for maintaining natural ecosystems.
Genuinely strong policies will remove subsidies that support environmentally harmful practices – such as excessive use of fertiliser and pesticides in high-impact sectors, such as forestry, agriculture, construction, or chemicals. Dedicated funding for nature restoration through earmarking a proportion of the national budget, or consistent alignment with the ‘polluter pays’ principle are options for many countries. Weaker policies tend to provide underfunded commitments and not much else, or leave significant gaps in what fiscal policies are reformed.
Case Study: Bangladesh
Bangladesh’s approach to fiscal reform and environmental taxation is focused on the contribution nature can make to mitigating climate change. The Climate Fiscal Framework (CFF) aims to “…provide a roadmap for climate finance in the country’s public financial management systems…” and make a direct link between budget allocation, fiscal decision making, and environmental issues. Civil society groups are involved in reviewing the regular climate budget reports, but though this policymaking structure has mainstreamed nature into fiscal decisions, ambitious reform proposals are still to be determined.
Bangladesh Country Profile