$500 billion in nature-harming subsidies: Can COP17 get governments to redirect the money?

Governments worldwide have committed to redirecting $500 billion in subsidies that harm nature, but financial flows supporting environmentally damaging activities have continued to increase. As countries prepare for the UN Biodiversity Conference COP17 in Armenia, the challenge is to turn this global commitment into concrete changes in public spending and economic incentives.

The summit, scheduled for October 19-30, 2026, will focus on implementation of the Kunming-Montreal Global Biodiversity Framework, which aims to halt and reverse nature loss by 2030. Reforming harmful subsidies is one of its central targets, with implications for government budgets, businesses and conservation financing.

Why are harmful subsidies under scrutiny?

Subsidies and other financial incentives can support economic activity while also creating unintended environmental costs. When public money encourages activities that damage ecosystems, governments face a contradiction: funding economic development while simultaneously committing resources to protect nature.

The challenge is not simply to withdraw financial support. Governments must identify which incentives contribute to environmental damage, assess their economic and social consequences, and determine how funds can be redirected without creating unintended hardship.

The COP17 agenda includes a proposal to mandate meetings of finance ministers to develop a plan for addressing these conflicting financial flows. This would bring biodiversity considerations more directly into fiscal policymaking, rather than leaving conservation largely to environment ministries.

Can governments redirect $500 billion?

The scale of the target makes implementation difficult. Subsidy reform can involve competing priorities, established industries and concerns about the impact of changes on businesses, workers and consumers.

A central issue is accountability. Countries need clearer plans for identifying harmful subsidies, establishing interim milestones and tracking whether financial flows are actually changing. Without measurable commitments, the $500 billion target risks remaining a broad international pledge rather than translating into changes in government expenditure.

COP17 will also consider the wider financing requirements of biodiversity protection. Under the global framework, countries aim to mobilise $200 billion annually from all sources by 2030, including $30 billion in international public finance. Redirecting harmful subsidies could help align existing financial flows with these conservation objectives, although subsidy reform alone would not meet the overall funding requirement.

Why the outcome matters for businesses and investors

Subsidy reform could change the financial incentives facing sectors whose activities affect land, water and ecosystems. Businesses may need to adapt if government support is redirected towards activities with lower environmental costs.

For investors, the policy direction could also influence how environmental risks and government incentives are assessed. However, the precise sectors, timelines and financial consequences will depend on the measures governments ultimately adopt.

COP17 therefore presents an opportunity to move biodiversity policy closer to the centre of economic decision-making. Its success will depend not only on reaffirming the $500 billion commitment, but also on whether countries agree on credible plans, assign responsibility and establish mechanisms to measure progress.

The key question is whether governments can change the financial incentives driving nature loss while maintaining economic and social stability.