Assessing biodiversity effects of public financial incentives: a methodology for the Dutch government

In an effort to curb further biodiversity loss, the Netherlands has committed to achieving Target 18 under the Kunming-Montreal Global Biodiversity Framework. This commitment instructs that the Dutch government identifies subsidies harmful to biodiversity by 2025 and eliminates, phases out, or reforms incentives by 2030, starting with most harmful incentives and scaling up positive ones. Financial public incentives, encompassing subsidies, tax cuts, and guarantees, among others, are defined in accordance with WTO and OECD standards and referred to as biodiversity harmful subsidies (BHS). This report outlines a methodology for fulfilling the initial phase of this commitment by identifying Dutch financial public incentives detrimental and beneficial to biodiversity. The assessment encompasses national and global biodiversity effects, evaluating both direct and indirect impacts, including consideration of the area and intensity of biodiversity effects where applicable. The methodology builds upon OECD Guidelines and draws lessons from other national assessments. Additionally, the methodology aligns with the EU Commission’s draft methodology of Environmentally Harmful Subsidies (EHS).