An IPBES report estimates that nature-harming financing reached US$7.3 trillion in 2023. Misguided subsidies are exacerbating deforestation and ecosystem damage, with substantial incentives allocated to extractive industries and plantations, including biodiesel development that poses environmental risks.
Target 18 of the Kunming-Montreal Global Biodiversity Framework requires the reduction of harmful subsidies amounting to US$7.3 trillion, or approximately Rp131,269 trillion in 2023. Meanwhile, only around US$220 billion, equivalent to Rp3,955 trillion, was directed toward biodiversity conservation and restoration activities. Fewer than 1 percent of companies that publicly report their activities disclose their impacts on biodiversity.
Giorgio Budi Indrarto, a member of the management board of MADANI Berkelanjutan, said that only a few countries with tropical rainforests have committed to reducing budgets for nature-harming subsidies. Instead, subsidy funds are being disbursed to support plantations and extractive industries that drive deforestation.
“The government controls the money, but [the funds] are moving in the wrong direction. Misguided fiscal incentives are contributing to worsening ecosystem damage and biodiversity loss,” Giorgio said during a side event at the 17th Conference of the Parties to the Convention on Biological Diversity (CBD COP17) in Yerevan, Armenia, according to a written statement issued on Tuesday, October 20, 2026.
A spatial analysis by MADANI Berkelanjutan found that 5.9 million hectares of key conservation areas in Indonesia fall within concession zones. Of this area, 2.12 million hectares are part of the National Strategic Food and Energy Projects (Proyek Strategis Nasional, or PSN).
MADANI believes these allocations have implications for the substantial subsidies provided for biodiesel development and downstream plantation processing.
For example, the government’s decision to increase the biodiesel blending mandate from 40 percent (B40) to 50 percent under the B50 program could require fiscal incentives of up to US$50 trillion, according to the annual report of the Plantation Fund Management Agency (BPDB).
MADANI estimates that developing the B50 program would require between 4.1 million and 11.2 million hectares of land, putting the environment at risk of damage and deforestation.
Giorgio acknowledged that subsidies are a highly sensitive issue because they are sometimes closely tied to political and economic policies. However, he added that the government must have the courage to reform its subsidy policies to protect biodiversity.
“Providing subsidies for practices that damage ecosystems and biodiversity also runs counter to Target 18 of the Kunming-Montreal Global Biodiversity Framework (KMGBF),” he stressed.
He explained that the target requires governments to identify, eliminate, phase out, or reform incentives, including subsidies, that are harmful to biodiversity, with a target of reducing them by at least US$500 billion annually by 2030.
At the same time, the KMGBF calls for increased positive incentives for biodiversity conservation and sustainable use.
At the same event, Liliana Duica Amaya, an anthropologist and consultant for Colombia’s Foundation for Conservation and Sustainable Development (FCDS), said that the agricultural sector has long received substantial government support.
These subsidies encourage the excessive use of chemical fertilizers and pesticides, resulting in contaminated waterways and declining soil quality. If left unchecked, such incentives will threaten the survival of biodiversity.
“Massive subsidies in the agricultural sector also encourage monoculture farming practices and the expansion of agricultural land into forests and the natural habitats of wildlife,” Liliana said.
Carolina Alves, director of the Institute of Socioeconomic Studies (INESC), highlighted disparities in energy-related incentives in Brazil. Home to more than half of the Amazon ecosystem, Brazil has the largest tropical rainforest area in the world.
In the Amazon Basin, vital ecosystems continue to disappear due to deforestation and degradation driven by unsustainable human activities. This situation has prompted INESC to analyze disparities in environmental incentives in Brazil over the past decade. The organization found that subsidies allocated to fossil fuels were more than twice those directed toward renewable energy sources.
“The biggest challenge is figuring out how to stop the flow of funding that accelerates the destruction of nature, rather than focusing on how to find more funding for [nature] conservation,” Carolina said.
