Worldwide, more than one trillion US dollars were spent from 1994 to 1998 on indirect subsidies that could actually be contributing to global warming and acidification. Indirect, or off-budget, subsidies are not visible in government budgets, and their environmental impacts often go unseen as well. These subsidies can increase the size and pollution intensity of economic activities without clear, compensating social benefits.

A study in the current issue of AMBIO: A Journal of the Human Environment finds that off-budget subsidies contribute to more than 30% of the policy targets specified by the Kyoto Protocol for carbon dioxide emissions reduction by The Netherlands.

Environmental impacts in The Netherlands were determined for subsidies such as price supports for agricultural products and exemption from excise tax for aviation fuels.

Public subsidies, particularly in the areas of agriculture, energy, and transportation, are widespread. Unfortunately, they can also reinforce unsustainable technologies and hamper the pace of sustainable technical innovations, such as those needed to transition to renewable energy.

Policy makers often focus on economic efficiency and policy effectiveness, neglecting the negative effects to the environment and society. The authors conclude that effective climate policy needs to consider removal of off-budget subsidies.

AMBIO: A Journal of the Human Environment aims to serve the important function of putting into perspective significant developments in environmental research, policy, and related activities, and to reach specialists, generalists, students, decision-makers, and interested laymen around the world with this information. Among the subjects covered are: ecology, environmental economics, geology, geochemistry, geophysics, paleontology, hydrology, water resources, oceanography, earth sciences, meteorology, and physical geography. AMBIO is published by the Royal Swedish Academy of Sciences, an independent, non-governmental organization founded in 1739. The major aims of the Academy are to promote research in mathematics and the natural sciences. To learn more about the society, please visit: http://www.kva.se

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